The Welsh Assembly government is investing £250,000 in a project to turn poor quality timber from Wales into high-value joinery grade material.

The initiative, part of the Heads of the Valley project, could add millions of pounds to the value of Welsh forests, as well as creating 20 new jobs in south Wales.

A heat treatment kiln will form the heart of the scheme, formulated by director of BRE Wales and Woodknowledge Wales Nick Tune. “This is a fantastic opportunity for the Welsh timber sector which brings multiple benefits for south Wales,” said Mr Tune.

For project partner and not-for-profit company Siren, the scheme will allow it to almost double in size and produce timber products for the joinery and construction sectors.

Welsh deputy minister for regeneration Leighton Andrews said the scheme had “tremendous potential to provide a valuable long-term boost for the Welsh wood industry bringing benefits to our rural communities”.

Potential production sites are being investigated near Caerphilly, with the new factory expected to be operational by Christmas.