The paper manufacturer said it had also been hit by sustained and sharply increased raw material costs, which it had not been able to recover from.

If the closure went ahead, Sappi's uncoated product line Cento would be discontinued, and it would reduce its coated fine paper capacity by 435,000 tonnes, and its uncoated fine paper capacity by 65,000 tonnes. Around 550 staff would be affected.

In a statement, SFPE said: "Despite our best efforts to curb costs and gain better margins, Biberist mill has been unable to generate acceptable returns.

"Consequently, SFPE has announced it will enter into a consultation process with its Biberist mill employee representatives and social partners."

The company did not rule out a full closure of the mill, and said that customers would then be offered comparable products and services from other Sappi sites in Europe, and said that "no supply interruption would be anticipated".

Sappi was unavailable to comment at the time of writing.