About 250 jobs are under threat at a Somerset cellophane-producing factory.
The plant was bought by UCB Films (now Innovia Films) in 1996
Innovia Films says it has started a three-month consultation process with employees and unions on the future of its Bridgwater plant.
Capacity at its other two sites is "more than sufficient" to meet demand, the company said.
David Beeby, chief executive, says: "If the plant closes it will be no reflection on the dedication and competency of the workforce."
He added: "Cellophane has been fighting alternative products and technologies for more than 30 years.
"There is a strong residual market for Cellophane but there simply is not sufficient business to justify our operation of three production plants."
If the plant is closed in three months' time, 250 jobs will be lost.
The Bridgwater Cellophane plant was opened by British Cellophane in 1937.
In the late 1970's it produced 40,000 tonnes of Cellophane packaging film a year, and employed 3,000 people.
It was acquired by UCB Films (now Innovia Films) in 1996 when it employed 470 people.