A spokesman for the firm's Legal Affairs department said production output would either be publication paper, improved newsprint, or supercalendered (SC) magazine paper grades.

However, a firm decision has yet to be made on what will be produced, but around 80% of the mill's capacity could be exported into the European markets.

Several sites in Europe are under review, one of which the spokesman confirmed as Opatovice-nad-Labem in the Czech Republic.

"No formal decision has been made, and this is just one of several sites we have under review," he said.

The spokesman added that several factors would be key in the decision making process. These are overall cost, supply of fibre, logistics, and market closeness.

The board will make a final decision on the project by the end of this year.

If it gets the go-ahead the mill will be commissioned by the beginning of 2007. When complete it will employ around 250 staff, with an additional 1,000 indirect jobs being created.

Myllykoski's total production capacity in 2004 was 2.3m tonnes, 47% of which was lightweight coated paper, 35% SC grades and 18% newsprint.

The firm's largest market is Germany where it has a 32% share of the market, followed by other European Union countries with a 23% share.

In the UK, Myllykoski has a 5% market share. Total net sales for
Myllykoski last year were 987m.

Story by Andy Scott