Dynamic growth

Under the leadership of its young and dynamic chief executive JC Kuo, the Evergreen Group has risen from a small wood based business started by Mr Kuo's father over 30 years ago to an internationally operating ready-to-assemble (RTA) furniture, and panel, manufacturer with production facilities in Malaysia, Thailand and now Indonesia.

The success of the group was recognised in a very significant way in November of 2007. This was when Mr Kuo attended an awards dinner on Sentosa Island, Singapore, to receive the accolade of being included in the prestigious Forbes Asia magazine's list of the top 200 businesses in the Asia Pacific region with turnover of under one billion US dollars. Evergreen appeared in the list for Malaysia with sales of US$180m in 12 months and net income of US$17m (WBPI news, issue 6, 2007, p12). Part of the rapid growth of Evergreen has been effected by expanding production at its existing facilities and part has been by acquisition and merger. Falling into the latter category is a joint venture with PT Hutrindo, effective in August 2007, and involving that company's existing MDF production line, PT Hutrindo Jaya Fibreboard Manufacturing Co, and PT Uforin Adhesive Industry, near Palembang in the south of Sumatera island, Indonesia. Evergreen currently holds 51% of the shares in the line and Hutrindo 49%. The joint venture company is now called PT Hijau Lestari Raya Fibreboard, which means 'Evergreen' in the Indonesian language. In 1993 Hutrindo, a long-established plywood and veneer producer, decided to go into MDF as well, placing a turnkey contract with German complete line supplier Siempelkamp for a ContiRoll continuous press line. However, in common with many Indonesian plywood producers, Hutrindo's business ran into difficulties with the shortage of available logs for its plywood operations due to logging bans, and its new MDF line also halted production, in 2005. With the MDF line, Evergreen and Hutrindo's joint venture also took on 10ha of the large factory site outside the city of Palembang and rented some further areas for raw material storage from Hutrindo. Although the MDF line had not run for two years, it had been maintained in full working order, explained Christopher Blaise Marshall, the chief operations manager. Normally based at Evergreen's Parit Raja MDF factory in Malaysia, Mr Blaise Marshall is in charge of getting the Palembang line back into full production - a job which he expected to complete before the end of January 2008. Also part of the deal was an existing resin production plant on the same site and this was undergoing a full restoration at the time of my visit in late November 2007. Mr Blaise Marshall hoped that production of urea formaldehyde glues would restart in March 2008 as all necessary components had already been purchased. "The original designed capacity of the MDF line was 9,000m³/month and we are targeting 11,000m³/month within two to three months of start-up," said the manager. Access to the Hijau factory by road is difficult but there is the possibility of using the adjacent Musi river and the company has rented land near the River, about four to six hours' voyage from the factory, for storing logs which can then be barged to the site. Finished MDF panels will also go by river to Palembang port. "The logs come from a 100 to 200 kilometre radius and we will be utilising only rubberwood initially, although we expect to use acacia and maybe mixed hardwoods in the future," said Mr Blaise Marshall. "We will use rubber wood initially because it is easier to control quality. Latex can be a problem for some mills, but with our experience, and a good sifter and refiner plates, it is not a problem for us. "Initially the factory will produce E2 grade boards of approximately 700kg/m3 density, but maybe later we will produce E0 or even Super E0, depending on the demand." Moisture resistant board is also a possibility, but the company does not foresee much demand for that grade. The majority of production is destined for export to the Middle East, Far East and South East Asian markets, with some going to the domestic market. The production line The drum debarker was supplied by Fuji Kogyo, while chippers are from Pallmann. Texpan supplied the screens and the chip cleaner came from Imal. The original Siempelkamp sifter has been modified to improve its performance. The refining system, from Andritz, has a 14in plug screw feeder and 16in discharge screw. The refiner is a 45/48in unit. The blow-line dryer is heated using thermal oil and a heat exchanger, as well as flue gas from the energy plant which goes to a mixing chamber and then to the heat exchanger. Heat energy comes from three new boilers supplied by GTS. These replaced a Vyncke system which was destroyed by fire some time ago. Two of the three boilers run on wood waste using the original Vyncke furnace, while the other runs on dust, burnt by a GTS system. Mr Blaise Marshall does not envisage needing any source of fuel other than wood waste. The glue kitchen and volumetric dosing systems were supplied by Imal, while forming, pre-pressing and of course pressing, is by Siempelkamp. The ContiRoll continuous press is 9ft wide and 16m long and runs with the original Sandvik stainless steel belts, which, apart from the removal of some minor dents, were fully serviceable. A Siempelkamp system cuts the panels to size at the end of the production line. "Initially we will produce standard 8x4ft panels," said Mr Blaise Marshall, "but we have a 9ft wide press, so we will see what other sizes we might offer in the future. We could run 3x9ft as long as the panel profile is good up to nine feet wide - time will tell." In the control room, the original synoptic control panels are good enough to get the mill running well. The Steinemann six-head sander was part of the original equipment supplied and has also been kept in good condition. To keep emissions to a minimum, the factory runs a closed-loop system. "We elongated the dryer tube and added a Bison-type back filter, fabricated locally, because this mill has historically had problems with dust emissions," explained Mr Blaise Marshall. The process water supply comes from the river and is filtered and chemically treated in an already existing plant, while waste water will be filtered in a locally-made filtration and water treatment plant. PT Hijau Lestari Raya Fibreboard will mainly produce thicker panels as the press has a design speed of around 500mm/second, although this may be increased at a later date. Evergreen Group's other factories in Malaysia are already well-equipped to produce thinner panels anyway: Evergreen Fibreboard Bhd at Batu Pahat has one Mende line and one Dieffenbacher continuous press line, both for MDF. Also in Malaysia there is Allgreen, a particleboard line with a two-opening Dieffenbacher press. In Johor Bahru there is also another Mende line and a Küsters line (formerly owned by Merbok). Total panel production capacity in Malaysia adds up to 480,000m³/year. An extensive RTA furniture making factory is also located in Parit Raja. Again for MDF, there is Siam Fibreboard in Hat Yai, southern Thailand (see p36), which has two continuous Siempelkamp lines running and a third, greenfield, Dieffenbacher, line currently under construction and due to go into production towards the end of this year. Production capacity of these three lines adds up to 570,000m³/year. There are other major projects currently underway too, including an energy generation plant at Hat Yai, nearing completion at the time of my visit there. JC Kuo is continually looking for ways to expand his group and it seems certain that PT Hijau Lestari Raya Fibreboard will not be the last new site to be added to the Evergreen Group. Meanwhile, who knows, there is actually space for a second line in the Palembang factory............