Growing fast

It is only since 2000 that the company has expanded into other provinces, beginning with Liyang Man Made Board Co Ltd in Jianyang City, Fujian province. Originally this factory had two 50,000m3/year Chinese-made lines producing MDF, but with the start-up in 2007 of a continuous line by another Li Ren subsidiary, Senlan Wood Company, also in Jianyang, one of those lines was closed. The other is scheduled for closure later this year. Its manager Mr Tang will then move to Senlan, of which more later. To get back to the story of the Li Ren group, 2001 saw another factory built in Pucheng City, Fujian province. Under subsidiary Li Ping Man Made Board Company, this Chinese-made line turns out 100,000m3/year of MDF. In 2002, Lishui Oak was formed and a Dieffenbacher CPS continuous press was installed at its site in Zhejian province with a designed capacity of 150,000m3/year. The first board was produced in August 2003. Again in 2003, yet another subsidiary, Shanghai Wanxiang Wood Factory, built two Chinese lines, one to produce 100,000m3/year of MDF and the other 50,000m3 of particleboard. The major distinguishing feature of these lines is that they utilise exclusively urban wood, including old furniture and remains from wood processing factories in the Shanghai area.
The next project to be realised within the Li Ren Wood Group was that line in Senlan.
Civil construction work began on the 230mu (ca14ha) site in December 2006 with the principal machinery arriving from Germany in April 2007. The main component of this line was a Siempelkamp ContiRoll continuous press of 23.8m in length and with a designed capacity of 150,000m3/year of MDF. Main production here is of 2.5-8mm and most of that falls between 2.5-3mm, with a density of 780kg/m3. Siempelkamp supplied all equipment from the dryer to the finishing line, while Pallmann of Germany supplied the chippers and the 52in refiner.
This may be the latest line for the group, but it is by no means the last. This year will see the installation of another line, for the production of thicker MDF over 8mm, at Jiangshan City in Zhejian province. This will be another Siempelkamp ContiRoll line, with a 33.8m press, and delivery was expected in August. This line will use 70% recycled material because there are a lot of woodworking factories in Jiangshan,said Yang Xiaojun who came in from head office as general manager of Senlan in March this year. “There is around 200,000m3 of this material available in the province and our line will have a capacity of 150,000m3. “The president of Li Ren, Mr Xu, aims to reach a group capacity of one million m3, with the timing of that dependent on the market and the wood supply.Li Ren is also active in developing its own wood resource and has its own forest in Jianyang City and its own nurseries. We will in the future have 200,000mu (approximately 13,300ha) in Jianyang and 100,000mu in Lishui,said Mr Yang. “We have been adding about 20,000mu/year to the Jianyang holding since 1996 and in future we aim to have about 50% of our wood supply from our own resources. All new plantation is of alder and sour date and the trees can be cut at about seven or eight years of age. We also plant some maple and eucalyptus. We use a small amount of pine, which grows slowly here, but we can grow it on the lower slopes.For resin supply, each Li Ren factory has its own plant. In common with many Chinese panel producers, Li Ren’s factories do not have value-adding facilities, producing only raw board. Surfacing is traditionally carried out by specialist sub-contractors. The group supplies its panels to markets all over China, while Lishui Oak, which is located 370km distant from Senlan, has a small amount of export business to Japan, Iran and South Korea. Mr Yang described the MDF market in China as “OK(in March) with supply and demand in balance and the price reasonable. He suggested that particleboard sells better in China, partly because it uses cheaper, recycled raw material and can therefore be sold more cheaply than MDF, although some particleboard producers I know would disagree with him, finding profitable sales difficult.
“Since 1998 there has been so much new MDF capacity in China and I think that after another two years, expansion must slow. China is already producing 40 million m3 and there are still more lines coming up in the next two years so I think the market will be full. I think market capacity will be reached before the wood supply runs out,said Mr Yang. (Editor’s note: With due respect to Mr Yang, WBPI statistics indicate China’s production at only around 21 million m3 by 2010 – see p15). “The Chinese government gives tax incentives to the wood industry and most factories are using small diameter and waste wood. Good wood will not be used to make MDF and the wood supply for MDF is decreasing. In the short term, government policy will not change but in the longer term, I think the subsidies will only go to the big companies.”
I asked Mr Yang about the prospects for utilising ‘urban’ wood but he said that it is very difficult to collect in China because it is so widespread. We can only get urban wood because we have a company dedicated to collecting it from every corner of the city.”
Mr Yang also felt that agricultural-fibre board has quality issues and that its use is complicated by the seasonal nature of the raw material and the consequent storage issues.