Poultry giant 2 Sisters Food Group said that the site in Llangefni, Anglesey, was old and would require significant investment to bring it up to the same standard as its other locations.
The firm said Llangefni was one of its smallest sites and products could be made more efficiently elsewhere.
It said it would speak with employees to explore the options before making final decisions on closure.
This will be very disappointing news for our Llangefni colleagues, and it is no reflection of their continued hard work and commitment, a company statement said.
We have a duty to remain competitive and protect our wider business, which many thousands of people depend on. It described the Llangefni site, which it bought in 2013 as not sustainable and lacking space to be efficient despite 5 m being invested there.
It said that the cost to produce here is higher and it would require significant investment to bring it up to the standards of our other factories.