You've got it!
Boiled linseed oil added to red or black dyes gave a "tarpaulin dress" ensuring the sheets were waterproofed.
The manufacture and repair of wagon sheets was a large business in the early 20th century, servicing the whole of the Midland Railway, and was situated in the Sawley/Long Eaton triangle.
With the demise of wagon traffic in the 1960s, the business folded [no pun intended!].
I am aware of two hints as to what went on here. I've read the floor of the industrial estate now occupying the site still has the marks of the tracks of the narrow-gauge railway the MR used for internal transport. Secondly, visible to anyone paying attention from the carriage window of Derby-Nottingham/London trains, is "Sheet Stores Junction" - the beginning of the Castle Donington line to Stenson Junction.