Princess Anne was shown preparations for the construction of the site's 45MW biomass combined heat and power facility, which is due to be operational by 2012.

The biomass site will replace the company's existing coal-fired plant and will reduce the manufacturer's annual carbon emissions by 250,000 tonnes. It will also generate 6% of Scotland's renewable generation targets.

Group chief executive Chris Parr said that despite the turbulent economic climate, the development would reinforce the company's world position as an environmentally focused papermaker.

He said: "It is an exciting time for the business as we carry out a plan to ensure the future prosperity of our company."

The plant annually produces over 150,000 tonnes of paper and boards for cards, covers and packaging markets.