Coillte was selected last week as the preferred bidder in the race to buy the Medite MDF mill that was put on the block by Weyerhaeuser along with five other composite mills, as the company phases out its interest in composite panels.

It is understood that Coillte bid around 70m for the plant, beating out Green Belt, the private Irish forestry company that manages plantations for more than 5,000 farmers, and wood recycler Sonae. Coillte's bid is believed to have been 10m higher than the underbidder.

Around 16 companies and consortiums are understood to have made expressions of interest in the plant. The Irish Farmers Association had already expressed concern about the monopoly implications of the country's two biggest pulp processing plants being owned by the same company. Coillte also owns the former Louisiana Pacific plant near Belview, Co Waterford, which is now known as SmartPly.

The Clonmel plant, which makes medium density fibreboard, has been in American ownership since it was established. Its transfer into Irish ownership would mean that more than 80% of the annual 550m turnover of the Irish wood processing industry would be generated by Irishowned companies.