The capacity, which will be built at UPMs Shotton Paper site in north Wales, will enable waste newspaper and magazines to be collected from 4m more UK households, according to WRAP.
The budget for the project, which is subject to State Aids clearance, is expected to be in the region of 127m, with WRAP contributing up to 23m.
The remaining investment will come from UPM-Kymmene (UK), which has already made a 78m commitment to a recycled fibre pulp facility at Shotton.
The new facility will be commissioned by the end of April 2003, with full production expected by 2004. The project will convert Shotton to 100% recycled fibre.
The mill will require an extra 320,000 tonnes of recovered papers and magazines to boost the quantity of recovered fibre used at Shotton to WRAPs target of 620,000 tonnes a year.
WRAP changed its preferred bidder status from Aylesford Newsprint to Shotton Paper in January following concerns that Aylesford would not be able to deliver the new capacity within its timescale.
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