Work is progressing on schedule to create the UK’s largest waste wood recycling centre.

Leading wood recycling firm Plevin is on course with development plans for the new £5 million facility on a 50 acre site in Hazlehead, South Yorkshire. The centre, which will primarily manufacture wood chips for energy giant E.ON’s £120m renewable energy plant at Blackburn Meadows near Sheffield, will create 20 jobs and process up to 150,000 tonnes of waste wood a year.

The 25-year deal, which was awarded to Plevin by E.O.N, is the most lucrative in the Greater Manchester firm’s 38-year history. The biomass-fired facility, at Blackburn Meadows near Sheffield, will generate up to 30MW – enough to power 40,000 homes – by converting recycled waste wood into electricity. Construction work will begin at the end of November and the plant is expected to become operational in mid-2014.

The family-owned business, which was formed in 1973 by Roy Plevin, turned over £21m in 2009/10.

Jamie Plevin, managing director, said: “This contract marks an extremely significant milestone in the growth of our company, and we are naturally thrilled. “In order to meet the demand, we will be creating new jobs at our existing sites as well as opening a number of new facilities at strategic locations.

The facility is now open for receipt of waste wood material and preparations are underway for the installation of processing equipment. Site preparation work to date has included the demolition of redundant buildings. Installation of processing equipment is due to commence in the new year, and production on site will coincide with the opening of Blackburn Meadows.

As well as processing biomass fuel, Plevin manufactures a range of market-leading wood-based products, including materials for the panel board industry and animal bedding for livestock, equestrian and small animals.