Over 200 jobs are at risk in Whakatāne, with Whakatāne Mill workers being told operations there may shut down.
The NZ Herald is reporting 210 workers have been presented with a proposal to close the mill which is no longer economically viable.
"We have begun consultation with staff on a proposal to wind up the business and close the mill," general manager Juha Verajankorva is reported to have said in a statement sent to staff.
The proposal will see staff made redundant and the plant decommissioned, according to NZ Herald.
Whakatāne Mayor Judy Turner spoke to the Rotorua Daily Post about the situation.
"It has been a centennial employment opportunity for young people and well, everyone intergenerationally.
"We will be asking questions in the morning and in the coming days," she said.
The mill has produced packaging and paper products for more than 80 years.