Logging efficiency

Right beside the Mahakam river sits the extensive veneer based products factory of Sumalindo Lestari Jaya (SLJ). That river provides the factory's lifeline as logs are floated from its concessions in Kalimantan right into the factory premises. The current factory at Loa Janan dates from 1982 when it had four production lines. In 1984, two 'jumbo' lines were added and in 1990 the company added a two-daylight Raute press for the application of paper overlay, phenolic film facing and decorative v-grooved panels. There are three main product lines manufactured here.

The first is 4x8ft for secondary processing such as v-grooved wall panelling produced on site and products for the furniture industry. These products are mainly exported to Australia, North America and Europe. The second product line is 3x6ft or 7ft for flooring base panels in Japan and Korea. The third is those jumbo-sized panels of 4 or 5ftx9ft or 10ft as a general purpose plywood which mainly goes to North America and Europe. Exports account for around 90% of production, in grades of BB and BB/CC and to JAS standard for Japan and CE for Europe. The mill has had ISO 9002 quality certification since 1994 and ISO 14000 environmental certification since 1997. The factory was only able to produce about 12,000m³ of its 15,000m³ capability in 2006 due to flooding in the concessions. About 15% of the total wood supply for Loa Janan comes from plantation wood at present but this is planned to rise to 40% this year (2007), assisted by the new mini-rotary peeling plant at the MDF factory (see p44), which will produce about 6,000m³ of veneer a month for plywood cores, which is equivalent to about 12,000m³/month of plantation logs. In total, about 100,000m³ of plantation logs per year are currently utilised for plywood, producing around 60,000m³ of panels which are FSC certified. That will be 33% of the company's monthly plywood output in 2007. The jumbo lines use only FSC certified logs. Tracking of the wood starts at the concessions with a bar-code label on the log and this is tracked through the mill, with an FSC sticker and bar-coded packaging applied to the final product at the factory. Logs are brought from the concessions via the adjacent river, or round the coast and up the river, by barge or in log rafts. The rafts are made up of 'sinkers' and 'floaters' in a ratio of 1:4. The log storage pond is just upriver from the mill and logs are floated down to an inlet canal. There is a buffer log pond in front of the production buildings and logs are craned from the inlet to these before craning out again for cross-cutting and peeling. The peelers handle 100 long-grain and 45 short-grain logs per shift. "We peel minimum 35cm logs here and up to now the waste has gone to energy production, but with the new mini-rotary mill at the MDF site, we can peel smaller logs and get higher value from them," explained Mr Eko Arief S, planning manager for the plywood mill at Loa Janan. There are currently six peeling lines: a 10ft wide one for face, back and core; two 5ft lathes for core; and two 11ft and one 7ft, again for face, back and core veneer. "The future strategy for Loa Janan is to increase the percentage of long-grain veneer peeled for face and back and to decrease the core production, replacing it with veneer from the new mini-rotary mill. "The development of the peeling at the MDF mill is not about increasing capacity, but efficiency. We will also change the product mix to increase the percentage of core from plantation wood and to increase core (short-grain) veneer production overall to make more LVL," said Mr Eko. Production of LVL began at Loa Janan in 2005 at 700m³/month and will increase to 2,000m³/month during 2007. The factory has 21 single-opening hot presses for scarf jointing veneers and five multi-daylight hot presses for plywood. There are nine veneer dryers with a total capacity of 600m³ per shift. Seventeen veneer composers serve three lines and veneers are hand-patched after composing. Glue is roller-applied and includes phenol formaldehyde for exterior panels, urea formaldehyde for interior panels and melamine urea formaldehyde for moisture resistant grades. Using strips sawn from peeler cores, gmelina is finger- and butt-jointed to make door cores. The mill works 24 hours a day in two shifts and employs 1,400 direct staff and 600 sub-contractors. Mr Tsukamoto Mineo from Japan is vice chief executive of the plywood operations and has seen some changes in his many years in the plywood business. "Twenty-odd years ago there was a rush to plywood because of the log export ban in Indonesia. That led to about 120 plywood mills but today there are only around 30 to 50 left. Thus now is the time to invest and make the most of the synergies between the MDF and veneer-based operations," he said. "Very few companies are offering plantation timber but Sumalindo has a long experience in tree planting. We have tried a lot of species before settling on gmelina and acacia mangium. Gmelina prefers alkaline soil and does not grow so quickly near our MDF factory where the soil is acidic. So we concentrated on acacia in that area. It has a density of 400kg/m³ and a creamy colour and it is less hard than rubberwood." Costs have continued to rise for the Sumalindo plywood factory in the past year: "About 10% of our costs are resin-based and those costs have been rising steeply," said Mr Eko. "Meanwhile, the price of meranti logs has gone from around US$135/m³ in January 2006 to US$200-230/m³ during the year. "In the second quarter, the price of plywood rose, up to October, then it started falling back again. It is not so bad for us because we have value-added products and our jumbo and flooring grade prices are higher. In the third quarter, the average price was US$590-600/m³ FOB; 12 months ago it was US$370. "However, our costs have also doubled. This year [2006] was the worst for the Indonesian plywood industry because of the poor log supply due to the heavy rains." In spite of these difficulties, PT Sumalindo Lestari Jaya's plywood factory is receiving strong commitment from the company and should receive a boost from the new mini-rotary facility. It is also appears to be improving its environmental credentials, which just requires the encouragement of buyers in the west in the form of being prepared to pay a premium price for a 'greener' product.