Following its acquisition of biotechnology company Virdia, Swedish paper and packaging specialist Stora Enso has announced plans to build a $43 million demonstration and market development plant at Raceland, Louisiana, USA.

The facility, set to go on stream in 2017, will seek to demonstrate the viability of Virdia's extraction and separation technology, which enables cellulosic biomass such as wood or agricultural waste to be converted into highly refined sugars. The end product could be used the Swedish group's existing pulp mills.

The demonstration unit will be located close to sugar cane plantations and will use the byproduct bagasse as a sustainable, non-genetically-modified feedstock to produce high purity five-carbon sugars and in particular xylose. The sugars will be converted and upgraded for use in applications such as food and personal care.

Juan Carlos Bueno, executive vice president of Stora Enso Biomaterials, said the investment "marks the next step in our strategy for new markets and applications." The goal, he said "is to develop and commercialize cost-effective renewable solutions to address well-identified market-driven needs and add value to our current cellulosic streams."