The paper manufacturer has been working with scientists from Edinburgh Napier University on a new, low-cost way of making nanocellulose.

Sappi described it as turning wood into a “wonder material” with a potential market of 35 million tonnes a year.

Math Jennekens, R&D director at Sappi Europe and the co-ordinator of the project, said the nano-material was “completely sustainable” unlike those based on fossil fuels, which made it attractive for a wide range of industrial applications.

The Sappi and Edinburgh Napier team has come up with a way of making Cellulose NanoFibrils that doesn’t require expensive chemistry, and also doesn’t generate large quantities of waste water.

“Most significantly, the chemicals used can be easily recycled,” stated Professor Rob English of Edinburgh Napier.

The process causes wood pulp to release tiny nano-scale fibres.

Potential uses include as a thickening agent for water-based products including foods and paint, to replace glass fibres in composite materials, and even wound dressings.

Other applications include paper and coatings, and as a replacement for plastic films in packaging.

The location of the pilot plant has not been announced, nor the likely level of investment involved. It is planned for the second half of 2015.

A Sappi spokeswoman said: ”We are still reviewing options and proposals from various countries regarding the location. And at this moment we will not disclose information about the investment."