Puhos Board Oy will acquire all the business operations of Finnforest’s Tiwi chipboard plant in Keuruu and, at the same time, Finnforest will gain a 13% share of Puhos.

Sakari Wallin, managing director at Puhos Board Oy, said the acquisition brings new products to the portfolio including more components and more melamine faced chipboard.

He said production output would be aimed at the Nordic and Scandinavian markets.

Mr Wallin said negotiations between the two companies had taken a while but that ultimately the time was right. He added: “We will not be looking for any further acquisitions in the near future – this is enough for us to work with.”

Puhos Board Oy, which is part of the Isku group, will take over all the Tiwi employees. The agreement increases the size of the business significantly – employees now number 85 at Puhos, 87 at Keuruu and five in the UK.

Turnover in 2005 was €74m with export and other activities accounting for more than 70%. Estimated turnover for 2006 is €100m.

Andy Moore, managing director of Puhos Board (UK) Ltd, said: “This arrangement strengthens the position of the Finnish board industry in an increasingly competitive international market.

“It will contribute to a growing market share for quality products and we also expect the acquisition to reinforce the Puhos reputation for flexible logistics, high usage of production capacity and consistent focus on customer service.”