Canadian company Norbord has announced a £95 million modernisation and expansion of its oriented strand board (OSB) mill in Inverness.

The expansion proposal could see the plant at Dalcross on the A96 double its annual production from 350,000 cubic metres to 750,000.

Highlands and Islands Enterprise has also offered a grant of about £11.5m towards the proposed expansion.

Norbord said the project would secure the future of 130 people employed at the factory. The site also supports about 300 indirect jobs in the area.

Karl Morris, managing director, Norbord Europe, said: “Demand for OSB is increasing rapidly and this investment will ensure we can continue to meet customers’ needs and remain at the forefront of the European industry. Our Sterling OSB product manufactured in Inverness is the UK’s leading OSB brand, and with direct road, rail and port access the reinvested mill will be in an even better position to efficiently serve our customers across the UK and in continental Europe. This investment underscores Norbord’s long-term commitment to Inverness and the Highlands region, and we look forward to continuing to play an important role in the community.”

Built in the early 1980s, the Inverness mill – at Morayhill, on the outskirts of the city – was the first in Europe to manufacture OSB, and was also the first OSB plant in Europe to receive Forestry Stewardship Council (FSC) accreditation, reflecting its commitment to the environment. The expanded mill – which Norbord expects to come online in the second half of 2017, with no disruption to production in the interim – will continue its commitment to sustainability, including generating its own heat energy from the biomass wood residue that is a byproduct of the production process.

Plans to expand the site were approved two years ago by the Highland Council.