The paper producer will use the port as its southern entry point into the UK for newsprint and other papers from Sweden and Finland.

Stora Ensos senior vice-president for transport and distribution, Lars-Gunnar Almryd, said the costs for building the facility would be met by Forth Ports. The terminal should open in July 2005.

He said the site would give the firm easier access to London.

Stora Enso currently uses the Felixstowe terminal, but it will gradually phase that out.

The new facility will take in 800,000 tonnes of paper a year.

A spokeswoman for Forth Ports said the facility would be funded with the aid of its 50m credit facility.

The Port of Tilbury terminal will comprise a 23,500m general-purpose warehouse and a rail cross dock facility with a 4,500m warehouse, including the provision for a wastepaper transfer facility of 3,000m.

The investment will create around 50 new jobs at the Port of Tilbury.