A COMPANY is expecting to win £20m in orders by the end of the year after forming two firms to build homes, schools and offices using timber.

Metnor, which is based in Newcastle, has set up Ecosystems and Modehus.

By the end of next year, it expects to have won orders worth more than £60m.

It is the only UK company to have a licence to build the timber-framed homes.

Metnor is a diversified contracting and services company with interests in mechanical and electrical contracting, construction and metal treatments. Recently, the group diversified into development and sustainable building.

Construction companies are under increasing pressure from the Government to build energy-efficient homes.

By 2010, its target is for all new homes to be 22 per cent more energy efficient than they are today. The latest timber technology is 30 per cent more efficient, beating most of the methods that use traditional bricks and mortar.

The buildings, designed in Sweden, consist of ready-made walls, which are factory- built and shipped to the UK, complete with windows, doors and wall insulation.

The walls are fitted to timber frames, cutting down on construction time so the weather does not delay completion dates.

Houses can be watertight in eight hours, built on brownfield sites with poor ground conditions and completed in five weeks.

Ecosystems will deal with shipping the frames and modules, and has already won a £10m contract in London to build three care homes, which will be completed 12 weeks less than it would have taken using traditional methods.

The company will handle large projects, such as schools, healthcare buildings and offices.

Modehus will target development sites and build small housing estates.

The two companies will be part of the Metnor Property Group (MPG).

In Scandanavia, the US, parts of Ireland and Scotland, timber modular homes are common - they account for 60 per cent of the Scottish new build market.

In the rest of the UK, they only account for 15 per cent.

MPG director Keith Irving said: "Ecosystems panels - up to nine metres long - are constructed in the factory to individual requirements, minimising work on site and ensuring quality control.

"They incorporate triple-glazed windows, door frames, insulation, power conduits and plasterboard.

"They are delivered to the building site ready to erect, so requiring less labour on site and minimising construction waste left on site.

"The group sees this new business venture as being a major part of future growth and there is synergy with other activities within the group."