Norske Skog's Walsum mill in Duisburg has filed for insolvency after the group decided to withdraw its support.

The mill, which has a capacity of 205,000 tons of lightweight coated (LWC) paper a year, has been bleeding cash at a rate of up to NOK10 million (A$1.65 million) a month. The board's decision to discontinue operations to prevent further losses affects 291 employees.

Norske Skog chief executive Sven Ombudstvedt says reducing staff, and improvement programmes for energy, raw materials and the level of working capital had failed to make the mill profitable. In December 2013, production at paper machine PM4 was closed, reducing annual capacity by 225,000 tons, but production at the second paper machine had continued and Ombudstvedt says employees made "significant efforts" to improve remaining activities.

"The market for publication paper has been demanding for an extended period," he says. "Capacity closures of more than 3.0 million tonnes in Europe and North America in 2014 and 2015, in Norske Skog's product segments, contribute to a better market balance, but do not improve the economic fundament of Walsum."