Karl Morris, the MD of wood panel manufacturer Norbord, has hit out at government environmental strategies that, he says, push up the price of raw materials and threaten the wood panel industry.

His comments came as the company announced the sign off the final phase of a £25m investment programme within its site at Cowie in Stirlingshire - a move that will result in a reduction in total manufacturing costs.

"This final stage of works will provide us with added operating flexibility, a broader product mix, further quality improvements, capacity growth of over 10% and a reduction in total manufacturing costs," Morris (pictured) said. "These planned cost reductions are important as we strive to partially offset rising wood costs, which are under pressure due to strong competition from the energy sector."

The raw materials used by Norbord are the same as those utilised by biomass energy plants, which are subsidisied thanks to environmental concerns over fossil fuels. This means, Morris said, that electricity generating companies can afford to pay more than double the price paid by the wood panel industry.

This has distorted the market to such a degree that, Morris said, wood panel manufacturers have seen an average wood price increase over the last four years of over 30%.

Morris said this trend will only continue and accelerate because of government strategy that emphasises large scale wood-fired electricity production.

"[This] is threatening to destroy the wood panel industry which supports 8,700 jobs throughout the UK," Morris said. "We are not anti-biomass and, indeed, as an industry we have pioneered the burning of our process-derived residues waste to generate heat and power, which is then fed back into our own manufacturing process.

"Although we have received backing by MPs and a wide range of other organisations and individuals, it's vital that political decision makers now begint to listen seriously to our calls for more responsible use of wood and to create a level playing field between ourselves and our competitors across the energy sector."

Norbord's panels are a common component in kitchen and bathroom furniture manufacture, and are produced from virgin and reclaimed wood. The company employs more than 250 people at its Cowie plant and a further 120 at a sister site in Morayhill near Inverness and 400 at another plant in South Molton, Devon.