THE Forests of Glenbranter sound like something out of Lord of the Rings. They carpet the Argyll hills around Strachur in a patchwork of green and brown, stretching as far as the eye can see.

However, until recently, a local builder wanting some timber to renovate a house or a householder needing a wooden fence, had to send to one of the big builders' merchants in the city - despite being surrounded by innumerable acres of the natural resource.

Now a new company has geared up to exploit the plentifully available wood within the area, supply local and national demand, and keep at least some jobs in an employment-starved area.

Argyll Sawmills was established in August last year under the managing directorship of Hugh Semple, and is on track for first-year turnover of (pounds) 800,000. It is still loss-making following substantial initial investment but expects to go into profit in 2005.

''There has been a mill on this site since the sixties,'' said Semple in his office, to the accompanying whining of high-speed saws outside. ''It started when the forests which were planted after the war began to reach maturity.

''The Cowal Sawmill was run on the site by wood merchant Adam Wilson of Troon and Ayr and was designed to produce pallet boards and components from small trees and logs which are abundant in the area.

''Wilsons purchase a great deal of standing timber in Argyll and send the highest value and best quality logs to their main mills in Troon and Ayr for conversion, mainly into construction timber. The sawn boards were all transported into north England for manufacture. At that time, very little of the sawn material was used locally.''

Falling timber prices and the strength of sterling pushed the Cowal Sawmill operation into closure in early 2002, and its potential was spotted by Peter Blacker, a property developer in Dunoon who was engaged in renovating and selling on former US Navy houses in the town.

He called on Semple, a forestry consultant with considerable experience as an agent - buying, selling and advising on what to do with large swathes of forest all over Scotland.

''We felt we could alter the mill from what it was - a producer of low-value wood - to what it is now, a much more varied user of bigger sizes and species of wood,'' he said.

The company invested (pounds) 500,000 in the mill, with some grant aid from Argyll & the Islands Enterprise. When it took over, the machinery could produce a maximum length of 1.5m and logs of 35cm diameter. Now the new machinery can take timber up to a metre wide and produce lengths of 7.5m. Four jobs have been saved out of the original 14 at the mill and one more - a joiner to make added value products - has been created in the past year.

Most of the wood it produces is ''off-saw'' - that is, untreated in any way - and is used in renovation work by local joiners and builders. Further investment is planned by Argyll in a treatment plant to allow it to produce wood which will meet the more exacting standards of the new-build house market.

Semple said: ''We are negotiating at the moment with the Scottish Environmental Protection Agency about the implications of the plant, but it should lead to further employment at the mill in the longer term.''

At the moment, Argyll benefits from its small scale. Most big, computerised mills rely on a high throughput of uniform logs, but Argyll can handle small logs, logs of species other than spruce, and also large or so-called ''over-sized'' logs - all of which are available at a discount which can be passed on to the consumer to develop a local competitive advantage. It is also making the most of by-products such as bark, which is sold to gardeners and garden centres, sawdust to farmers, and wood chips to community heating schemes.

The next stage, said Semple, would be to bring in kilns to dry and season timber, and finishing machinery to make it suitable for the building trade. He has just completed a marketing push to builders, joiners, and retailers in the area, and is ready to seek business from anywhere.

''We are the only sawmill in the new Loch Lomond and the Trossachs national park,'' he said. ''There is bound to be a new market in way markers, stiles, and gates.''