Finnforest is to invest €20m expanding the production capacity of its Kerto LVL factory in eastern Finland to meet growing demand for wood-based building systems.

Capacity at the company’s Punkaharju plant will be increased by 60,000m3 a year to 130,000m3, bringing total investment in the factory to €70m since 2000.

The expansion, expected to be complete by February 2006, will create 130 jobs, 50 of them in production and another 80 in wood procurement and subcontractor companies.

The enlarged plant will need an additional 150,000m3 of spruce logs a year, which requires a growth in wood purchases in the East Savo area.

Finnforest says demand for Kerto, manufactured by gluing 3.2mm thick softwood veneers together, is rising strongly. The material is used in load-bearing structures, such as floors, and in the manufacture of I-joists.

Total annual production and building use of LVL in Europe is less than 200,000m3, with Finnforest producing 170,000m3 annually at its Lohja and Punkaharju factories.

A real estate company jointly owned by Punkaharju municipality and the East Savo Joint Municipal Authority, will buy the Kerto facilities and be responsible for the extension. Finnforest will rent production space through a long-term agreement.