Chief executive Phil Cronin said the paper division's gas and electricity costs had soared by 160% over the past two years, creating an annual energy bill of 2.5m, against paper sales of 10m.
"We have been unable to pass this cost on to customers and our sales have suffered," said Cronin.
A five-week consultation period has begun, the outcome of which will be known by the end of November.
Cronin said the games and print divisions of the company were trading well, and the decision to cease paper production had been made to support the long-term future of the group.
The mill specialises in the production of recycled paper and bespoke mailing products, producing 23,000 tonnes per year.
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"Well done all involved... great to see the investment to increase the productivity in the same footprint- much more sustainable than popping another one up."
"From 1949 until the late 2000s Remploy had a network of government-subsidised factories that offered employment specifically to disabled people, originally often war veterans or victims of industrial..."
"Does appear an odd decision as with that level of shareholder funds they would be liable for the staff redundancy and cover the insolvency costs. It’s not like they could take the money and dodge..."
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