The firm is in talks with employees and shareholders over the move, and if approved work will move to its Klippan and Lessebo mills.

Mlndal mill managing director Thomas Billing said the closing of the plant, which produces 80,000 tonnes of paper per year, would lead to major savings.

Transferring work to Klippan and Lessebo will result in almost full capacity production at the two sites.

Mlndal produces graphic paper, in both white and coloured grades.

The company remains in negotiations to acquire the French fine paper mill Papeteries de Maresquel, from International Paper.

The firm also plans to raise 15m (SKr200m) through a new share issue in Q2 of this year.