BSW has joined the chorus of opposition to the proposed merger of Forestry Commission Wales (FCW) with other agencies and says it could threaten its mill expansion plans and job creation.

As part of financial cutbacks, the Welsh government is proposing combining the FCW with the Welsh Environment Agency and Countryside Council. Environment minister John Griffiths will make a decision on the issue this year.

The move has already been opposed by Confor, which says it risks diminishing Welsh forestry’s commercial aspect and focus on timber production.

Now BSW chairman Martin Gale has told the Cardiff-based Western Mail and written to Mr Griffiths saying the loss of FCW’s independence may stall the company’s plans to expand its Newbridge-on-Wye sawmill.

Nearly £8m has been invested in the plant in the last five years, with the latest development being the installation of two 3MW kiln boilers at a cost of £1.8m.

The mill has also received planning permission to extend working hours, which is to create 25 more jobs, taking the workforce to 145. But Mr Gale said BSW would “seriously reconsider” the development if FCW lost its independence.

He told the Western Mail that the FCW’s merger with other bodies “would be a crime that will destroy confidence in the business sector and endanger investment and jobs and force us to rethink expansion”.

He told Mr Griffiths that FCW was Newbridge’s “fundamental and critical business partner”. It supplied 60% of its sawlogs, worth £6m a year, and Mr Gale said its staff were “highly trained, commercially astute individuals with a first class understanding of our sector”.

“They balance the skills required to derive sustainable commercial value from timber, which in turn funds the environmental and social output for Welsh [public] forests.”

He added that being confident of this “professional, sustained and secure annual supply of logs” gave the company and its bankers confidence to invest in Newbridge.

“We support a devolved FCW, but it needs to be more of an arms-length public corporation with full trading facilities and much less of a government department,” he said.