Södra, which believes strong growth in the pellets market will continue, said the plant will be operational by the autumn. It will have a capacity of 20,000 tonnes of pellets, representing the mill’s entire production of planer shavings.

Initial investment will involve a single pellet press but there is scope for an additional two presses.

The company said pellets and other forms of bioenergy will play a greater role in future sawmill production.