The company has not yet disclosed the precise location of the new facility, but says it will be on Humberside, where it already has a warehousing operation at the King George Dock.
"The new facilities will be dedicated to producing builders merchants products," said SCA Timber Supply UK managing director Neil Emsley.
"They will house two production lines, and further investment later will create a third."
Full production figures for the new plant will be announced later, but part of its output of planed softwood products will go to Travis Perkins under the new supply deal.
The facility is planned to come on stream early 2014, when the contract with Travis is due to commence. It is expected to create a number of new jobs.
Mr Emsley said that the investment underlined SCA’s "depth of commitment to the whole builders’ merchant sector".
"It will consolidate our position as a leading supplier to existing and new customers, such as the Travis Perkins Group," he said.
This ties in with comments made this week to TTJ by Anders Ek, president of SCA Timber Supply internationally.
The company he said, was devoting more wood resources and product supply to the British builders merchant sector.
"It’s a mature market, but we see scope for furthering our share and developing our service-oriented category management style of business," he said. "We’re gaining critical mass and bringing in greater volumes will significantly improve costs, generating related benefits to customers."
SCA’s Welshpool planing facility, which supplies customers in the south and west of England, will not be affected by the new plant. And the company is also expanding warehousing at its Stoke on Trent site, which already covers 150,000ft2 and has smaller scale machining facilities. This follows a new "supply chain management deal" with Wickes earlier this year.
SCA said the combination of all its latest developments would be "to increase delivery volumes and double the size of operations across the UK".
