Around £16.5m is being invested in the expansion of the Javorice wood processing mill in Pteni near Prostejov in Czechoslovakia which will make it one of the largest facilities of its kind in Europe.

A member of CE Wood Holding, the company will invest in new technology and infrastructure and turnover is expected to grow from last year’s £16.8m to about £46m within a few years.

Processing capacity will triple once the work is completed and more products with higher added value will be produced.

Some of the waste material will be turned into energy for the plant and Javorice director Radek Hartman said: “We have even been thinking of selling the energy.”

Work on the expansion began earlier this year and several key machines are already in place with the completion date set for the end of 2005.

CE Wood Holding financial director Michael Broda said financing of the project is assured. He said the plan has been prosperous in recent years and that the expansion should cause profits to rise.

“It shows that the wood processing indutry is profitable and covers the recent losses of the timber harvesting activities for the national enterprise, Czech Republic forests.”

Mr Broda said CE Wood plans to invest a further £11.5m in the organisation’s other mill in Hodonin, south Moraavia which is also profitable.

CE Wood is the Czech Republic’s largest timber harvesting and processing company. The parent company of the largest private timber harvest-processing holding in Central and eastern Europe, it had a turnover of around £207m in 2004.