WOOD panel maker Egger UK plans to make its second £20m investment in a year to improve the Hexham factory which it says is now the most advanced chipboard plant in Europe.
The Austrian company says there will be no new jobs at the site, which already employs 520 people, but that the investment will help to safeguard the future of the plant.
It has put in a planning application to upgrade its glues and coating plant, which are over 40 years old, and build new offices and a centre for training apprentices.
The business is trying to grow in a sector which has been hit by a 55% rise in wood prices in the last five years and the decline in the housebuilding and furniture industries, and has made a series of investments to keep it at peak production. Its investment follows an announcement three months ago that it was spending £20m improving equipment used to laminate its wood panels used in furniture.
The plant is now Northumberland’s biggest manufacturing sector employer after the closure of the Alcan’s aluminium smelter in Lynemouth, and the company says it indirectly supports 1,500 jobs in the county in areas such as forestry and sawmilling.
Bob Livesey, Egger UK joint managing director said: “Following a full environmental impact assessment, a planning application has been submitted for a modernisation and improvement scheme at Hexham to upgrade our Campact plant, which produces glues and coating resins used in our manufacturing process.
“The existing resin and formaldehyde plants and cooling towers will be replaced with modern state-of-the-art facilities. The new facilities are expected to be completed in 2014, after which the old resin and formaldehyde plants and cooling towers will be demolished. The redevelopment at Egger will also include new administration facilities and workshops as well as a new apprentice training facility.
“This scheme, in the region of £20m, follows more than £20m we have invested over the past 18 months on a new chipboard lamination line and a new impregnation line, which has increased our need for these basic raw materials produced by Campact.”
Egger’s continuing upgrading and investment in the factory is designed to ensure its chipboard products continue to meet exacting quality standards demanded by customers in the fitted-kitchens and furniture sectors, as well as in housebuilding
The latest news follows an earlier £8m investment in recycling equipment at the company’s factory in Ayrshire, and a further £4m in its two Egger Timberpak recycling sites in Glasgow and Sunderland.
It is the latest in a series of investments at the Hexham site it bought in 1984 from Weyroc, including a £120m expansion in 2007, the year which also saw it plant 13,500 trees in the area.