Gunns Ltd plans to grow its woodchip volumes by about a million tonnes a year by 2010.
The extra output, which will give the company an annual production of 7 million tonnes, will be made possible due to maturing plantations in Tasmania.
Environment groups have criticised the plan, saying it goes against Tasmanian premier Paul Lennon’s promise that no extra trees will be felled to feed Gunns’ new pulp mill in the state.