The paper and wood products group said it is planning to start co-determination negotiations on the temporary layoffs, which could last for up to 90 days during the first half of 2019 and would affect the entire workforce at the Oulu paper mill but would not impact personnel at the adjacent Oulu pulp mill.

In a statement the company said Oulu’s market demand for coated fine papers has deteriorated while, at the same time, the prices of the main raw materials for paper production have continued to increase.

“The aim of the negotiations now underway is to prepare for a possible continuation of the weakening market situation,” the business said.

“Temporary paper production constraints can help streamline operations and optimise paper production levels in line with market demand.”

Decisions on possible layoffs will not be made until the co-determination negotiations, which are anticipated to complete in December, have ended.

Earlier this year Stora Enso initiated a feasibility study into converting its coated woodfree paper production at the mill to packaging board.

Alongside the two paper machines at the site, which have an annual capacity of 1.08m tonnes, the mill also houses a chemical softwood pulp plant with a capacity of 360,000 tonnes.

The mooted conversion project would require a major investment of around €700m (£622m) to set up a new chemi-thermomechanical pulp (CTMP) plant at the site and create a brown-based cartonboard line able to produce 450,000 tonnes per annum and a kraftliner line with a capacity of 400,000 tonnes.

Oulu is Stora Enso’s only coated woodfree fine paper mill, meaning the group would exit that part of the market if the scheme goes ahead.

Two months ago Stora Enso was forced to partially shut down its Nymölla mill in southern Sweden due to drought in the region.