When discussing timber construction, the question of fire resistance often enters the conversation. In many ways, wood is an excellent material in a fire situation because its properties are predictable and, most importantly, it does not melt as metal beams are prone to do. Wood does burn and so in certain situations it cannot be used unless it is treated and/or protected in some way.
Practically every country in the world has developed a set of regulations concerning fire protection and the use of materials in construction. Invariably there are differences in test methods and classification systems, so a construction product made and used in one country cannot automatically be used in another unless there is some form of reciprocal agreement over fire regulations.
The European Commission recognised that national fire regulations inadvertently created trade barriers within the European Union and therefore developed a harmonised system of classification, testing and requirements of products in given situations.
Classification using test data from reaction to fire tests outlines the criteria and specifies the test methods used to classify products.
The classification system contains six classes (A1, A2, B, C, D and E), where A1 is the most fire-resistant. There is a second set of classes – A1fl through to Efl – for flooring products. The two sets are very similar in terms of criteria, however.
In addition, information must be given about smoke production for all products and the potential to form flaming droplets or particles for non-flooring products that are in classes A2 through to E. The smoke-forming grades are denoted s1 or s2 for all end-uses, where products in s1 produce the least smoke, plus there is a third category, s3, for non-flooring products.
For flaming droplets the categories are d0, d1 or d3, where d0 indicates that no flaming particles are formed within the parameters of the test.
This all sounds very complicated, but, for wood based panels it is not because plywood, OSB, particleboard and MDF all have the same EU fire class of Dfl-s1 for flooring products and D-s2,d0 for all other uses. It is a shame that the smoke categories are different, because I think it adds complication to a complex system. It is caused by the fact that there are only two smoke categories for flooring products.
The fire ratings of a panel can be improved by incorporating fire retardant chemicals during its manufacture, or applying them subsequently. If the CE mark of a panel indicates that its fire rating is better than D, then it must either have been treated in some way or is a cement-bonded particleboard, which has a classification of B-s1,d0.

Flakeboard’s Eugene MDF mill is cresting the wave of production improvement with a new resin process created in the firm’s St Stephens mill in Brunswick, Ontario, Canada.
Dieffenbacher’s Sunds MDF Technologies, Sundsvall, Sweden, produces the equipment.   
It is known as EVOjet and is a dry blending system that introduces resin after the dryer. It not only saves expensive resin (some 30% at Eugene), but also provides better distribution, according to Sean Coffey, Flakeboard’s Eugene plant manager.
The mill was originally a Bohemia Lumber Co particleboard operation which Willamette Industries bought and converted to recycled wood based MDF before Weyerhaeuser Company bought Willamette and converted the mill to fresh sawdust and shavings as the wood supply.
Later, Flakeboard bought it, among five Weyerhaeuser mills, making Flakeboard North America’s largest MDF producer.
The present wood supply, 200 to 220 tons per day, is sawdust and shavings, all from within a 100-mile radius of Eugene – mostly closer. It’s all green and primarily Douglas fir, although a very small amount of hardwood goes into the mix. “The plant has been good at adapting to what comes our way,” said Mr Coffey.
“At times we have run 90% sawdust,” he said. “You have to know how to move with the market. As an example, during a recent holiday period, sawmills were down and we swung to chips.”
The mill has one truck dump, which accommodates 51ft trucks.
A front-end loader mixes on the floor of the furnish area and feeds three silos which meter out to pre-steam bins. An ‘Andritz Sprout-Bauer 150’ 60-in refiner is coupled to an 8,000hp synchronous motor. Retention time in the digesters is 21⁄2 to 3 minutes.
A short blowline goes to a Westec primary flash tube dryer, heated with a Coen Energy system which can burn natural gas, dust, or a combination of the two. The system uses 95% dust and switches automatically to gas if there is a dust supply problem.
A flash tube dryer goes to two primary cyclones. The moisture content target is 17%. Dryer exhaust gas goes through an electrostatic precipitator (ESP). Paraffin wax is the only additive ahead of the dryer.
Conveyors can act as a fire dump or convey forward to a Sunds weigh belt which weighs the material to automatically determine resin addition in the EVOjet, the star of the system. Fibre is in the bin for not more than 10 minutes.
“Two high-speed rotating spike rolls are the heart of process,” Mr Coffey explained. “The material comes in on the main infeed fan and a flow splitter just above the resinator. This divides it into two equal streams. A gate assures that the torque on the two spike rolls is even, to disintegrate the material. This produces a nice, fluffed-up fibre.”
“Two high-speed rotating spike rolls are the heart of process,” Mr Coffey explained. “The material comes in on the main infeed fan and a flow splitter just above the resinator. This divides it into two equal streams. A gate assures that the torque on the two spike rolls is even, to disintegrate the material. This produces a nice, fluffed-up fibre.” where the streams join.
The nozzles are installed on moveable bars so they can be automatically cleaned while operating.
Pre-resinated fibre recirculates back around the system. This protection fibre sandwiches the resinated fibre and protection fibre to keep fresh resin off the walls to prevent sticking. It’s all air driven.
Warm air is forced around the nozzles to maintain a 50º to 60ºC temperature.
The fibre then goes up through a tower around into the main cyclone where warm air is recycled into the system. Western Pneumatics installed that system as well as much of the other new machinery.
A main feeder serves an 8x50x8ft retention bin, where the amount of retention fibre is determined.
Fibre proceeding to the line is relayed to a bin feeding two Washington Iron Works vacuum formers. This is a 4ft homogeneous line, but could be converted to 5ft width.
The mat goes through a 125 to 200psi roller pre-press and is cross-cut to panel size ahead of the loader to the Washington Iron Works 4x16ft, 13-opening press; two platens were pulled out of an existing 15-opening press to provide room for the MDF. The press is totally enclosed for air protection.
The line can use higher moisture content raw material because the resin does not cause blisters. It can run at 19 tons per hour, using both MDI and UF resins.
The line produces thicknesses from 1⁄4in up to 11⁄4in and a density as low as 34lb/cu ft, North America’s lowest-density MDF. The Premier product is 45lb/cu ft, but the line can make up to 60lb/cu ft density.
“We engineer products to what our customers want. We do all we can to serve those customers,” Mr Coffey declared.
Pressed panels go through two board coolers, then a standard star cooler.
The Globe saws are in-line. A Kimwood sander installation has a two-head sizing head into a six-head unit, followed by a cross-belt going into one of two grade bins. A CTC feeder system is installed.
The mill is compliant with all air standard regulations and has a biofilter installation.
Mill capacity is 85 million ft2 running four shifts, but with the present poor market situation it is running three shifts for 10 days and then goes down for five days. There are 50 hourly-paid employees.
Flakeboard is quite safety and employee oriented. The mill is unusually clean and Mr Coffey believes this is one of the factors for good employee morale. “We have a very good workforce, very empowered,” he said, “We have an outstanding resin system, combined with an outstanding workforce.
California is the primary market, but Oregon and Washington are important too. Most of the output is trucked, but there is space for five rail cars on the railroad spur.
Flakeboard broke ground on the resin project in July and the system was ready to run on December 31, with 8 days of commissioning before they were ready to run around the clock.
Flakeboard, with its eight mills in US and Canada, makes a variety of particleboard, MDF and thin, high density MDF.
The company’s 2006 purchase of three MDF and three particleboard plants from Weyerhaeuser added 1.1 billion ft2 of capacity.
A new product is eLITE light-weight MDF from the Eugene mill. It is 30% lighter than standard MDF, resulting in freight savings, shorter lead time, labour benefits and extended tool life.
Looking at the past, Flakeboard was the first to continuous-press particleboard and apply melamine faces continuously, among many other firsts for this innovative company.

The first studio to be opened by DuPont is in downtown Milan, with a further two located in Philadelphia’s Marketplace Design Center and in the visual arts-centric Flatiron district of New York City.
It says it was the pioneer in solid surfaces and engineered stone over 40 years ago with Corian. This renowned original resin composite still commands an enviable worldwide reputation today, while its complementary product, Zodiaq, combines the strength and beauty of natural quartz (95% of its composition), enabling designers and fabricators to create distinctive installations suggesting luxury and elegance, says DuPont.
Corian can be used to create flat and curved surfaces for furnishing and design solutions in residential and public applications. It is uniform throughout its entire thickness, is non-porous, does not require additional finishing, is easy to clean and, if necessary, repairable.
It can be thermo-formed into custom shapes and contours, sandblasted, routed, carved, laser-etched and back-lit.
The Corian Design Milano Store has an area of about 300m2 and exhibits a variety of products and systems: kitchens, bathroom decor, tables, lamps – made with Corian solid surfaces and Zodiaq quartz surfaces by client companies of DuPont, as well as installations created by designers from different countries.
The showroom’s interior design is the work of Catharine Lorenz and Steffen Kaz from the Lorenz Kaz Studio in Milan; two German designers who have been working in Milan for many years.
“Corian has a consolidated relationship to Milan, the world capital of design,” says Maurizio Solaro, country manager for DuPont Surfaces Italy. “DuPont has been presenting Corian and its great potential during design and interiors events and trade shows since 1998, in collaboration with world-renowned architects, designers and companies, including Ettore Sottsass, Zaha Hadid, Ron Arad and Marc Newson.”
The New York studio, which comprises 5,000ft2, is an interactive workshop where design influencers can consult with experts to address specific project needs and help bring their ideas and applications to life – from the most simple to the most advanced designs.
“Our collective vision was to create a place of interaction and experiment, where industry experts can collaborate and create inspirational environments with Corian and Zodiaq,” said Elizabeth Lawson, North America commercial marketing manager for DuPont Surfaces.
“The space will serve as the premier resource to demonstrate how DuPont Surfaces can be used as innovative, flexible and inspirational design materials.”
To provide consultation and project support for commercial designers and specifiers, Evans & Paul surfacing solutions experts are on hand and available by appointment.
“The Design Studio is a showcase for new offerings, fabrication skills and real life applications that convey how innovative designs can be flawlessly executed into striking spaces,” said Christopher Whitelaw, director of research and development, Evans & Paul.
Renowned New York architects Michael Morris and Yoshiko Sato of Morris Sato Studio custom-designed the Dupont Corian Design Studio using cutting-edge lighting, sound and shape technology to create a ‘sanctuary of experience’.
“We have defined the studio space through the Japanese concept of a borrowed landscape. Like a delicate garden, it is a sensory experience where designers can look, touch, feel and see the energy that Corian evokes,” said Mr Morris. “The specific technologies we have employed within the studio will actually draw people closer to the material, rather than farther away.”
One stand-out design feature of the studio is the starry sky lighting, featuring 74 pieces of thermoformed Corian. The ‘heavens’ above connect visitors to the application vignettes within the studio.
Another key focal point includes integrated, flexible, real-life applications for a variety of market environments, ranging from operating theatres, feature walls, hospitality, education and residential applications, to lighting, furniture and more.
Architects and designers in search of textured surface colours that can harmonise and invigorate an interior space can turn to the 2009 Dupont Corian Private Collection for inspiration.
The eight new hues – Witch Hazel, Sandalwood, Jasmine, Saffron, Elderberry, Juniper, Thyme and Rosemary – are a collection inspired by the subtleties of nature, with intricate browns, rusts, greys, blues and greens.
“Our emphasis was on expanding the Corian Private Collection to offer more flexibility, so architects and designers can achieve their creative visions,” said Elizabeth Lawson.  “The palette is bright and boldly neutral, infusing universal adaptable colours with shading, contrast and texture.”
Coolness, tranquillity and texture are characteristics that rise to the surface when describing Nutmeg and Savory, the two new 2009 colours of the DuPont Zodiaq Private Collection, says Ms Lawson.
Inspired by the restorative energy that emanates from trickling streams and rolling meadows, the quartz surface colours evoke a powerful yet refined aesthetic to catch the eye. Nutmeg and Savory aim to add a splash of calming movement to bustling lobbies, work spaces, retail stores and more.
“Architects and designers who envision interiors that are reflective of the graceful forces of nature will find these colours refreshing,” concludes Ms Lawson.

The vibrancy of the Asian panel markets over the past decade, particularly those in China, has long been commented upon. China has been an exciting place in which to observe the development and growth of what has become an enormous industry.
A similar sense of excitement has started to pervade the panel sector in South America, particularly in the ‘Southern Cone’ countries (Argentina, Brazil, Chile, and Uruguay), but especially in Brazil.
In recent years, we have seen rapid growth in markets, capacity and investment in the sector. Clearly Latin America is no China and the wood panel industry in South America is significantly smaller than that in China.
However, the sense of excitement in the region has been palpable – and comparable in many ways with that in China. There is a downside to this excitement (at least from an economist’s point of view). This relates to the almost grandiose, and close to irrational, business decisions that can be made when markets are close to euphoria.
In recent years, just as in China, the primary business model in Brazil (at least into early 2008) could arguably be described as “build it and they will come”!
Just as in the movie, “Field of Dreams”, where a baseball stadium was built in a cornfield with the expectation that paying spectators would appear as if from nowhere, panel producers in China and Brazil seem to have had a similar philosophy, or faith, that profitable business would simply show up as needed.
Certainly in China, business plans have often been awfully thin on substance about where market growth would be for the output being added by multiple new facilities. This approach was almost understandable when growth rates of 20% a year were typical and export potential seemed unlimited. But markets do mature, growth rates consequently slow, and good businessmen need to have a clear understanding of market potential when growth rates are not 20% annually.
In recent years we have seen rapid growth in South American panel markets, largely because of domestic market strength. Steady and sustained economic growth, the development of home ownership, and a growing middle class, have fuelled Brazilian demand for panels for furniture and fixtures.
The table below summarises Brazilian production of wood based panels over the past four years (2005-2008). MDP (‘medium density particleboard’) output jumped 27% and MDF production was up 47% over these four years. In both cases (unlike plywood) exports were a minimal contributor to demand.
However, over the same period, Brazilian hardboard production slipped 4% as MDF/HDF increasingly displaced hardboard in export markets (even as domestic hardboard consumption edged higher); softwood plywood output slumped 17% (largely because of plunging US demand – domestic consumption actually rose); and hardwood plywood production tumbled over 50% as tropical log supplies tightened and buyers increasingly steered clear of purchases of products manufactured from endangered tropical hardwood species.
Surging demand led to stronger prices and the best profitability in over a generation for many panel producers. The result was a boom in investment, both in new production lines and in complete new (greenfield) operations. Cambridge Forest Products Associates (CFPA) estimates that total Brazilian MDF and MDP capacity in 2005 was approximately 4.45 million m3.
As of 2008, effective capacity had climbed to 5.28 million m3 and will be close to 7.1 million m3 in 2009.
By 2011, once all the new lines have fully ramped-up to their rated capacity, Brazil’s combined MDP/MDF capacity will be approximately 8.85 million m3.
These estimates assume no closures of existing capacity. However, market conditions will probably dictate closures of at least some older capacity over the next few years. Even assuming that Brazil quickly shakes off the global economic recession in 2009, and domestic markets return to a growth path, it is hard to see how this growth will be sufficient to absorb all the new capacity that has, and is scheduled to, come on-stream through 2010. And with weak off-shore markets and fierce competition from other under- utilised panel operations in Asia and Europe, it is hard to see Brazilian panel producers exporting their way out of trouble.
In 2008, CFPA estimates that the production/ capacity ratio for MDP/MDF was close to 90%. To maintain that operating rate in 2011 with no mill closures would suggest production of 7.9 million m3; or 3.2 million m3 greater than in 2008 (a record year). This would represent average annual compound rates of growth of close to 20%, 2009-2011. We know that in the first half of 2009 production was down approximately 16% from the same period of 2008. Even assuming a stronger second half of the year than the first, total 2009 production will likely be flat to slightly lower than in 2008 (Figure 2). Consequently, it is highly unlikely that Brazil’s MDP and MDF producers will be able to sustain operating rates close to 90% over the next few years and will average operating rates of 65-70% or lower.
In CFPA’s assessment, the Brazilian panel industry will undergo a period of upheaval and consolidation. Already, in the matter of just a few months, we have seen two major changes in the structure of that industry.
First, the creation of a newly-enhanced Duratex company as it merged with Satipel to create one of the 10 largest global panel producers. This company’s operations are equipped with multiple modern facilities utilising relatively abundant plantation-grown fibre.
Second was the announcement in late August of Arauco’s acquisition of Tafisa- Brazil’s operations; this acquisition has vaulted Arauco into the position of a major panel producer in Brazil (as well as probably pushing this company close to being a Top 10 global panel player).
Further consolidation within the Brazilian industry is to be expected, particularly as lower panel prices put pressure on margins, reduce cash flow and push some operations into financial difficulties.
Consolidation will facilitate shake-out and rationalisation of the industry. In CFPA’s estimates, this will include the closure of significant volumes of MDP capacity in particular (around 450,000m3) and possibly of older MDF capacity.
In addition, ownership consolidation will facilitate more efficient distribution of production to the most efficient and lowest-cost facilities.
Even with this re-structuring, it will be difficult to push average production/ capacity operating rates much above 70% by 2011 through growth in Brazilian domestic demand alone.
However, companies such as Duratex and Arauco are better positioned to expand Brazilian panel exports, given their current already-significant exposure in North America, Mexico, Europe and parts of Asia.
Nevertheless, growth through increased offshore exports (as distinct from exporting to the ‘near-abroad’, ie the neighbouring countries within South America) will be difficult as Chinese and European MDF producers look for opportunities in South and East Asia and the other growth regions over the next few years.
Relatively strong currencies (in both Brazil and Chile) will also hamper an export-led growth strategy outside South America – especially one aimed at North American markets.
It is therefore hard to see an export-led growth strategy solving Brazil’s problem of excess wood based panel capacity, at least in the near term. Longer term, the problem will likely solve itself as Brazil’s domestic markets sustain relatively rapid growth over the next decade. This growth will be propelled by a rapidly expanding middle class, with larger discretionary incomes to spend on furniture, cabinets and fixtures in the new homes expected to be built over the period.
But the next few years will likely be rough for an industry that not too long ago thought the good times would never end. Economic cycles will continue: following the downswing, there will indeed be an upswing, but patience and deep pockets will first be required before the Brazilian panel industry again enjoys boom conditions.

The author, Bernard Fuller of Cambridge Forest Products Associates, (www.CambridgeForestProducts.com), welcomes your questions and comment s, which should be sent to: Bernard.Fuller@CambridgeForestProducts.com

The initial tremors shaking up the Brazilian panel industry, triggered largely by the global economic recession, saw the first stages of a long-delayed sector consolidation with the creation of two large new panel groups controlling a major slice of the Brazilian panel market.
Meanwhile, there were warnings of an aftershock later this year when fast expanding family-run panel producer Berneck SA revealed that it aims to acquire another player to form a third world-scale group in Brazil by the year’s end.
There is concensus locally that the market could sustain up to four big players.
Berneck boss Gilson Berneck has joined forces with a Brazilian private equity firm with access to foreign capital in his quest for a board producer with whom he can merge or form a joint venture. But, he warned, Berneck is determined to acquire the controlling interest in any panel partnership.
In the first move, the country’s top panel maker Duratex SA (see p38) agreed to merge with Brazil’s leading MDP (medium density particleboard) producer Satipel Industrial Ltda to form the biggest board manufacturer in the southern hemisphere. The giant group, retaining the name Duratex SA, will run seven continuous MDP and MDF lines and three for hardboard, with about four million m3/year capacity. It will hold 40% of the Brazilian market and has joint sales worth US$1.6bn.
Barely a month later, Chilean forest products giant Celulosa Arauco y Constitución SA finally pounced, snapping up Sonae Group’s isolated Brazilian panels-to-flooring business Tafisa Brasil SA in Piên, Paraná state in a US$227m deal.
Tafisa Brasil, which had been up for sale for some time, runs two continuous MDF lines with a joint 342,000m3/year capacity; a single 270,000m3/year continuous MDP line and a laminate flooring line. The move consolidates Arauco’s position in Brazil where its offshoot Placas do Paraná has MDF and MDP capacity in Paraná state of around 530,000m3/year.
Arauco, which still runs small-batch MDP lines in Curitiba that it inherited with Placas, will gain a modern continuous MDP line at Piên, while Tafisa, with no forest of its own, will benefit from Arauco’s growing national plantation reserves. Now, Placas is likely to close down the last single-opening MDP press lines in Curitiba, which have held the group back in Brazil’s particleboard market.
Since the global economic crisis hit Brazil, there has been a flurry of activity among panel makers who are keen to avoid being squeezed out of a shrinking market and determined to negotiate a role in the new-look panel industry of the future. Speculation is rife about who is currently in talks with whom on some fresh merger or joint venture.
What is clear is that the crisis caught the Brazilian industry unawares, just as many producers were completing ambitious capacity expansion schemes. The sudden downturn struck in September 2008 after Brazilian firms had enjoyed a five year market boom when MDF growth averaged 15% per year.
In the final quarter of last year and the first of 2009, panel manufacturers saw their sales volumes crash by 20%, with exports to the US and Europe particularly badly hit. Brazil’s domestic market also felt the recessionary draught, according to the country’s wood panel manufacturers association ABIPA.
Companies have been forced to cut their plants’ work shifts and slash production. Employees at some Brazilian panel plants have been laid off or reduced to carrying out essential maintenance work in recent months in the face of the market slump, the association said in July.
After a string of expansion projects for both MDF and MDP, panel producers were facing up to the prospect of continuing over-supply. The sector’s main customers in the Brazilian furniture industry also suffered badly from the international slowdown, not least in its southern zone at Bento Gonçalves where factories are focused on export business.
ABIPA has spent much of this year attempting to ease the plight of the recession- hit panel industry. Its efforts have focused chiefly on lobbying the Brazilian government for economic aid to bump-start sluggish consumer spending.
Early this year, as part of an economic stimulation package to counteract the worst effects of the slowdown, the government offered tax relief to customers of the car, construction and domestic appliances sectors. Since then, panel and furniture industry leaders have pressed the government to extend temporary relief from the industrial products tax (IPI) to their markets.
The Brazilian economy has benefited from a gradual fall in the country’s still high interest rates in the crisis period up to June 2009. Government aid to the banking sector also helped to release more credit in order to stimulate consumer sales.
Despite the effects of the crisis, there is still genuine confidence in some quarters in the longer term growth prospects for the domestic panel market. One executive talking up the market picture in July was Satipel’s commercial vice-president Roberto Sczachnowicz. “The Brazilian market has been better than foreign panel markets for the last year. It will continue to be so for the next couple of years,” he told WBPI in São Paulo.
Mr Sczachnowicz, named as supply chain executive director of the ‘new’ Duratex SA, based his confidence on Brazil’s huge housing deficit and a government scheme to build a million new homes. Panel makers are backing a programme called ‘Minha Casa, Minha
Vida’ (‘My Home, My Life’) through which state-subsidised home loans will help lower-class Brazilians buy homes complete with fitted furniture.
“I see this [scheme] creating a lot of market opportunities for us....domestic consumption will keep growing in the years ahead,” he said.
Brazil’s bulge in new panel capacity was clearly visible by mid-2009 as the last three big new MDP continuous press lines came on stream in Brazil’s southernmost state of Rio Grande do Sul.
In May, Masisa do Brasil Ltda launched its 750,000m3/year Dieffenbacher press line at Montenegro, while Satipel’s new 700,000m3/year Siempelkamp line launched three-shift production in mid-June. Meanwhile, the Isdra Group-owned firm Fibraplac Chapas de MDF Ltda started commercial output on its first MDP line, a 500,000m3/year Siempelkamp press unit, in July in Glorinha.
The recession, and consolidation moves, coincided with the end of Brazil’s latest cycle of big capacity expansion projects. But, there is one further scheme – the 350,000m3/year Dieffenbacher HDF line being built at Salto, São Paulo state, by hardboard and particleboard producer Eucatex SA (see p31). It is due on-stream early next year.
Meanwhile, industry sources are pointing to family-owned Fibraplac as an attractive prize in a hunt for a further merger or acquisition target. A relative newcomer to panel making, Fibraplac over six years has expanded rapidly to assemble a complex including two continuous Siempelkamp MDF and one MDP line with joint capacity of around one million m3/year. It also runs three low pressure melamine laminating lines at Glorinha.
Like several other Brazilian players, Fibraplac has temporarily abandoned further expansion projects because of the recession. In its case, there was a plan for a third MDF line on a second site further south near Rio Grande port. Other postponed plans include Duratex’s scheme for a giant one million m3/year MDP line in Itapetininga.
The panel makers have, though, glimpsed a shaft of light from the end of the crisis tunnel with some benefit being felt in the Brazilian market resulting from government intervention and the natural upturn felt during the second half of the year.
While the big boys of the sector struggle for power, there are still Brazil’s small panel newcomers, like the plywood converts (see p28), who are struggling for survival. The big question is, how will the panel industry’s disparate band of producers manage to share out the limited market cake? Casualties are inevitable.
But the hope is that, once the restructuring tremors have subsided, Brazil’s new-look industry will emerge leaner and fitter to meet the huge market challenges in South America’s biggest state and beyond.

Duratex has expanded, not just in terms of its recently-announced merger with Satipel Industrial, but with the launch in June of a huge, 77m-long, continuous MDF press line – the world’s longest to date – at its Agudos plant.
Duratex originally planned to install the 750,000m3/year eucalypt-based Siempelkamp line back in 2007, when markets in Brazil and abroad were booming. In the past five years, domestic sales of MDF have risen at up to 15% per year thanks to strong furniture industry growth.
Then, just as Duratex and other Brazilian MDF producers proudly made ready to launch their new lines, the global economic crisis hit, slamming the boom into reverse and leaving panel manufacturers saddled with substantial overcapacity. Duratex was forced to rethink its short-term plans.
Originally, the new MDF line was part of the company’s strategy to dedicate production of thin and standard thickness fibreboard products to different lines. Duratex also operates a 250,000m3/year pine based MDF production line at Agudos and a 450,000m3/year MDF/HDF unit at its Botucatu mill.
“The strategy was to have this big [new] line to produce basically 6x9ft products from 12-18mm [standard MDF], and to concentrate the Botucatu MDF line and Agudos Line I on special [thin] products,” explained Carlos Gama, Duratex’s engineering, development and environment manager.
Speaking soon after Agudos MDF II start-up in late June, he told WBPI on a visit to the plant that the plan was to run the big line eight hours a day through to the end of August before the product’s planned market launch at that time.
“Then, depending on the state of the market, we will be ready to increase the output,” the executive explained.
The super-press line comprises wood-yard and refining equipment provided by Andritz; Siempelkamp machinery from the dryer up to the end of the line, with the sanding section from Steinemann. The biomass energy plant was supplied by the Belgian company Vyncke NV.
Duratex was hopeful that Brazilian domestic demand for MDF, which fell in the first half of 2009, would benefit from lower interest rates and a government stimulation package in the final six months of this year. The home market is normally more buoyant in the second half of the year anyway.
However, the global recession has left its mark on even the strongest of Brazil’s panel manufacturers.
São Paulo-based Duratex is well aware that the sector’s recovery will not be short or sweet, and it will take the company several years before its sizeable panel production capacity is fully sold.
For Duratex, 2009 has already been a momentous year. The start-up of MDF II coincided with news that the company is spearheading a long-awaited industry consolidation through its merger with Brazilian MDP (medium density particleboard) major Satipel Industrial SA (WBPI Aug/Sept 09, p5). The new group, to be named Duratex SA, will have an overall capacity of around four million m3/year and rank as the biggest wood panel manufacturer in the Southern Hemisphere.
At the end of August, shareholders of both companies gave this deal the green light and the new US$1.6bn ‘super group’ was formed. In the meantime, directors and senior managers from the two companies have been discussing in detail the integration programme.
Asked about the new group’s likely future direction, Alexandre Coelho, Duratex commercial director told WBPI: “Right now we are consolidating our recent investments – Satipel and Duratex and we are focusing on integration”.
It is Mr Coelho who, as the ‘new’ Duratex’s wood business commercial director, will take on the challenge of marketing the group’s enlarged product portfolio in Brazil and abroad. He will also take on a wider industry role next year as president-elect of the country’s wood panel association ABIPA.
The new group has already given a clue as to how it means to recover business lost following the global economic setback. It is targeting foreign markets around the world in a concerted bid to expand exports which stood mid-year at a combined total of just 5% of sales.
“Our goal is to become the lowest cost producer in the world..,” the group’s chairman Salo Seibel and its ceo Henri Penchas revealed in a joint statement at the time of the deal announcement.
The first major move in years to consolidate the industry was warmly welcomed in Brazil as a near perfect marriage between Satipel and Duratex. Their respective operations complement each other in terms of plants, products, customers, geographic spread and continuous line technology, while each brings around two million m3/year of panel capacity to the partnership.
The advent of MDF II at Agudos represents a US$150m chunk of a substantial US$350m Duratex investment programme, which also covers the construction of a US$50m formaldehyde and resin plant at the site and the purchase of new forest land nearby.
The company expects to make a significant cost saving by adding the Perstorp resin plant which will also supply raw materials to the Botucatu site 60km away. The plant equipment arrived on site in July and the unit is set to start up this December (09) and will deliver chemicals fully from early 2010, forecast Mr Gama.
The forestry investment involved the acquisition of the Lençois Paulista area close to the Agudos plant, comprising 18,000ha of forest land to provide additional planted eucalypt wood to feed the new MDF II line.
For years, Duratex has maintained and expanded its tree plantation resource around its panel plants in São Paulo state. Today, it owns more than 123,000ha of forest located on average 55km from the plants, ensuring it has the lowest wood cost in the industry.
Duratex is in the process of switching its forest base from pine to rapid growing eucalypt trees. New plantations are now of eucalyptus, though the firm has sufficient pine wood to fuel the MDF I line at Agudos for up to seven years, explained Mr Gama.
In the past year, Agudos has seen further spending on panel finishing facilities. A second low pressure melamine line with a 180,000m3/year capacity was supplied by Siempelkamp in July 2008, and a third line with the same output was being purchased for the site this year.
This investment, along with the installation of a small mouldings line, able to turn out five million moulded skirting board strips per year for Duratex’s laminated flooring products range, demonstrate the importance the firm now attaches to value-added products.
“We are not only a commodity [products] company, but an added-value company too. We started to develop a new market and business in civil construction last year,” pointed out Mr Coelho. His company also planned to launch a door components business this year, he added.
A little over a year ago, Duratex revealed it was planning another revolutionary panel project when it announced its intention to build the world’s first one million m3/year particleboard plant. With its heavy focus on expanding fibreboard capacity and developing special thin MDF boards, the company was felt to be abandoning MDP. So Duratex’s answer to the market was the massive panel line scheme for its Itapetininga site.
The firm already operated a 500,000m3/year particleboard line, using 100% eucalypt fibre, which it had introduced back in 2000.
But late last year, Brazil was overtaken by the global recession and Duratex quickly announced it would postpone the huge Itapetininga line because of the international downturn. That decision proved wise in the light of the unforeseen merger deal with Satipel, whose wellinvested MDP operations to the north and south of São Paulo provided the balance its partner sought.
Duratex remains one of two major global suppliers of wet process hardboard, along with its fellow eucalyptbased panel maker, Eucatex SA.
However, last year, Duratex finally closed down its second hardboard production site in Jundiai, near São Paulo city. Duratex blamed a combination of the age of its three Jundiai 1950s lines and urban creep preventing expansion on the 150,000m3/year site for the shutdown. But export-reliant hardboard also suffered in 2008 from adverse exchange rates and the world recession.
The company still runs three newer wet process board lines, dating back to the 1970s and 1980s, with a 300,000m3/year output – two thirds of its former total capacity – at Botucatu. It was forced to switch the bulk of its business to the Brazilian market, according to Duratex’s commercial operations manager Giovanni Grossi.
Meanwhile, Duratex was developing special thin MDF products, including dry process super density fibreboard (SDF) and HDF panels which have begun to substitute for hardboard in certain market applications. The company has found that it is beginning to compete against itself with both hardboard and HDF in the marketplace, the commercial executive admitted.
Hardboard at home and abroad is still hugely profitable for its Brazilian producers and appears to have a future despite attempts to find an ideal replacement. “Hardboard is still recognised as a special product for certain applications. We intend to continue with the hardboard process at Botucatu, no doubt,” confirmed Mr Gama.
The MDF line in Botucatu was originally installed to develop the thin HDF and SDF products. Although SDF, devised as a resin-free substitute for hardboard, entered the market two years ago, 80% of the line’s output in mid-2009 was still standard MDF. HDF and SDF had a 10% share each, according to Duratex.
Managers are convinced that greater economies of scale, attained partly through its merger with Satipel, will allow it to produce bigger thin board volumes and prove that SDF is the most cost-competitive product, said Mr Grossi.
“We have to get volume, scale and competitiveness in the cost of production in HDF lines,” he declared. Once SDF is fully developed and can prove its value in the market, then the days of wet process hardboard could be numbered.
“SDF, at the right time, will certainly be the right [thin board] product to switch to in traditional hardboard markets, asserted Mr Grossi.
But for now, the well-tried characteristics and value of hardboard as a painted product are still very much in demand in the doorskin and civil construction markets, in Europe and the US particularly.
For Duratex, even the dark clouds of global recession have a silver lining, since it is clear the economic crisis spurred Brazil’s fragmented industry into the radical, but long overdue, consolidation process. Once the integration process with Satipel is complete a model group will emerge, leaner and fitter to take on the challenge of sector development.

Today, the Berneck group operates a modern, integrated, industrial site near Curitiba, equipped with a new 342,000m3/year MDF line, a 624,000m3/year MDP (particleboard) line and a 300,000m3/year sawmill. A second site in Santa Catarina state is earmarked for a further complex, eventually to include two more panel lines – one for MDF, the other for MDP – each of around 500,000m3/year.
By any standards the rise and rise of Berneck over the past decade has been little short of stunning. Now its proud and tenacious president, Gilson Berneck, has set his sights on controlling one of a handful of giant national panel players emerging in the sector’s latest round of consolidation.
He admitted his company, with the help of foreign capital, was seeking to buy or joint-venture with another of the country’s seven remaining independent panel makers after two big merger deals were announced.
In the first, Brazil’s top MDF producer Duratex snapped up leading MDP maker, Satipel Industrial SA to create the largest panels group in the southern hemisphere. In a second deal, powerful Chilean forest products giant Arauco Celulosa y Constitución SA bought panels and laminate flooring manufacturer Tafisa Brasil from the Portuguese Sonae Indústria group.
Speaking to WBPI recently, Mr Berneck revealed that, in partnership with a Brazilian investment company, he planned to reach a deal with another player before the end of this year. “We will be one of the three or four big [panel] groups,” he declared. He stressed his firm would only sign an agreement that gives Curitiba-based Berneck a controlling interest in the resulting group.
“We are open to discuss any situation: we could buy or we could make a joint venture.....[But] maintaining control is very important to us at this time,” he told the magazine in July. But the entrepreneur remained tight-lipped on his likely takeover targets.
At that time, the president hinted that Berneck was in talks with Tafisa Brasil with a view to a joint venture deal. However, Arauco subsequently closed that deal.
One other independent player, not yet part of three or four big groups expected to emerge from the current flurry of mergers and acquisitions, is the southern MDF and MDP producer Fibraplac Chapas de MDF. A relative newcomer to the panel sector, it has grown rapidly in the past six years and now runs two MDF lines and one newly-launched MDP line at Glorinha, Rio Grande do Sul.
Former plywood maker Berneck only entered the MDF business last October when the company started up the 342,000m3/year Siempelkamp ContiRoll line at its industrial complex in Araucaria, close to the Paraná city of Curitiba. The launch came just as Brazil began to feel the worst effects of the global credit crunch and recession.
The 950m3/day thin MDF line’s start-up had been delayed due to the late arrival of the site’s big new boiler, when its São Paulo suppliers Sermatec/HPB were overwhelmed with an order backlog associated with the biofuels revolution in Brazil.
With the domestic panels market depressed since the start-up, Berneck was selling barely half the MDF line’s normal capacity up to mid-year 2009. The firm has concentrated on producing thin fibreboard, for which the line was specifically designed, with around 6% of its overall output feeding weak export markets in Latin America.
The Brazilian market was not helped by a sizeable national MDF capacity hike in 2008.
Berneck was one of three producers to bring new lines on stream within months of each other, exacerbating an increasingly depressed market situation.
“It’s difficult to say when the market will take off again. I think thin board in Brazil is not increasing, but there is enough to keep the plant operating,” commented MDF line manager José Luis Dieguez when WBPI visited the plant in July. On that day, production was at a standstill as Berneck took advantage of a slack market to carry out essential repairs to damaged boiler pipework resulting from an installation fault.
However, Berneck has discovered a silver lining to the gloomy market clouds. The advent of thin MDF there has enabled it to target markets where finished hardboard is predominant. High density fibreboard (HDF) has also helped revive the fortunes of  Berneck’s 11,000m3/month Hymmen finish foil line, which had lost out to board painted by the customers.
Eucalypt hardboard manufacturers Duratex and Eucatex supply a substantial domestic thin board market with ready painted panels, used particularly in the furniture and automotive interior paneling sectors.
“We are making thin [MDF] board with finish foil that substitutes for painted hardboard because of it’s better quality and the price is almost the same,” explained Gilson Berneck. “Now we have thin board, the finish foil line is almost full.” In July, the firm was preparing to increase production, working three shifts instead of two.
Based on its success with finished thin board, Berneck said it planned to raise the share of HDF produced on the MDF line from around 50% to 75% over the next 12 months. The advance of HDF in those markets has led to a fall of around 25% in the Brazilian hardboard price. Customers prefer pine HDF for its two-smooth-sides finish and lighter wood colour, according to the Berneck president.
Looking further ahead, Berneck is well prepared to expand its fibreboard business when the dark clouds of recession finally lift and Brazil’s vibrant MDF market recovers its former strength. The panel maker now plans to launch its second Siempelkamp ContiRoll MDF line in the richly-forested southern state of Santa Catarina by the end of 2012.
Once the 450,000m3/year line, with a 40.4m press, is completed on a one million m2 greenfield site at Curitibanos, Gilson Berneck aims to use it to turn out thicker standard MDF panels. At that time, the smaller MDF I line in Araucaria will be dedicated to thin board production, he explained.
Berneck’s original plan – in better times – was to install a big 850,000m3/year MDP continuous press line at its southern site. Its Araucaria MDP line was almost fully sold and demand was still strong in what was then a booming national marketplace. The eventual plan was to duplicate the integrated Paraná site in Santa Catarina.
Then, Gilson Berneck had to reassess the scheme on news that Duratex planned to build a huge one million m3 per year MDP line at its Itapetininga site in São Paulo state. Since Berneck had already bought the land and begun site preparation, the firm decided instead to install a 500,000m3/year MDF line first in Curitibanos, alongside a new lumber mill.
“With the MDF line and lumber business [on site] at the same time, we could co-generate energy and make lumber and thick MDF and produce just thin MDF in Curitiba,” said the president. Earthworks are now complete on site and the MDF line is on order from Siempelkamp.
The irony of Berneck’s re-think is that the Duratex MDP plan for a massive São Paulo line was later shelved because of the worsening economic crisis worldwide.
It is unlikely Berneck will go ahead with its second MDP line at Curitibanos within the next five years, after other Brazilian producers launched three new particleboard plants at sites in the south of the country.
Gilson Berneck made clear the extra capacity planned for Santa Catarina is essential for the company if it is to become part of Brazil’s three or four large panel making groups of the future.
When WBPI visited the Araucaria plant, its existing Siempelkamp MDP line was still feeling the ill effects of the recession apparent in Brazil’s furniture sector since the end of last year. In mid-2009 that line was producing board at around 75% of line capacity.
It was in April 2006 that Berneck invested around US$3m to upgrade the wood preparation area in order to increase the capacity of that Siempelkamp line to almost 1,800m3/day. Since then, the board line has seen little change.
In view of market conditions and new capacity added by MDP competitors in the south, the firm expected to continue lower output for some time to come, although not below 70%. Gilson Berneck suggested it could be at least three to four years before his company’s MDP production returns to 100% capacity.
In the past two years, Berneck’s main Araucaria industrial site has seen substantial investments and big changes in the woodyard, wood processing and energy areas. Much of this came about as a result of the expansion of the lumber business and the addition of an MDF plant.
Key to the changes has been the addition of the MDF line, which required a woodyard expansion. Formerly, the site trucked in short, 3m long, ready-debarked pine logs from
Berneck’s plantations and the wood for the particleboard line was processed in Hombak flakers.
Today, a big secondhand debarker, bought from Duratex, has sufficient capacity to prepare unstripped pine logs needed for both panel lines. Earlier this year, Berneck was installing three new Pallmann chipping lines in place of the old processing equipment and the panel business uses good quality chips from the company’s big new sawmill next door. Meanwhile, bark and other wood waste from third parties provides material to fuel the biomass boiler.
The arrival of MDF production has meant a significant increase in the site’s energy consumption. Now, thanks to the integration of the different operations, Berneck said it is capable of generating a little over half of all the site’s energy needs.
“We are in a fortunate position in that we have an integrated site and are able to use the steam in all our processes to generate our own energy,” explained Gilson Berneck’s son
Daniel who was responsible for the expansion of the sawmill operations.
“We are capable of generating 13MW of electricity here from our own steam consumption and we consume 22MW so that’s almost half and half.”
In July, Berneck was completing the installation of a new electricity converter station on site to enable the firm to sell all the power it generates to the grid and buy back the electricity it needs at higher voltage, at a price advantage.
Berneck is proud of its new lumber operation with a capacity of 240,000m3/ year. Until this year, its wood drying capacity was limited but, with the addition of five new kilns, the unit will be able to dry all wood by the end of this year. Exports represent about 70% of lumber output, while the rest feeds the home market, but the firm expects business will settle back in due course to a 60:40 percentage balance in favour of export.
A small offshoot wood products business maintained by Berneck manufactures teak sawn lumber and panels fed by the former plywood company’s 3,000ha teak plantations in Mato Grosso do Norte. Planted teak, which takes around 35 years to mature in the region, makes high-added-value products. The firm is still only sawing plantation thinnings.
Berneck, in common with most of Brazil’s other wood panel manufacturers, has suffered the ill effects of the global downturn and the financial crisis which overtook even vibrant Brazil. The company saw its profit of US$35m in 2007 shrink last year to just US$26.5m.
Nevertheless, for Gilson Berneck and his family there is no going back. Their broad experience of the forest products business, along with a ruthless determination to stay at the top of Brazil’s panels industry, come what may, should ensure Berneck’s survival at a time of radical change.

MrMaluf’s emphasis on stimulating market demand through developing a wide range of distinctive finished panel products has helped Eucatex remain a leading sector player, although it only recently emerged from several years in Brazil’s equivalent of the US Chapter 11 bankruptcy protection.
The panel business is not about moving a commodity, but rather creating a ‘desirable’ product to appeal to the customer and result in fresh demand, explains Mr Maluf. “The great challenge in the end is to make a product, not simply a board,” he said.
“We have many worldwide patents taken out in recent years and we are still making new products to compete in a market, where other companies need at least three to four years to copy,” said Mr Maluf when he spoke to WBPI in São Paulo in June.
An established MDP (medium density particleboard) and wet process hardboard producer, Eucatex is now on the verge of adding dry process fibreboard products to its panel portfolio. Initially, it plans to launch a 350,000m3/year plant for thin HDF/MDF early next year, and is studying a second major project to build a 500,000m3/year eucalypt MDF plant, possibly in Mato Grosso do Sul state.
The company’s long-awaited shift into MDF/HDF marks another innovative step for its executive president. His first plant, currently taking shape in Salto, São Paulo state, will focus on making 2- 9mm HDF board and painted, melamine laminated and flooring products.
“There’s no plant in Brazil that specializes in this niche market. We understand we’ll be unique in that from 2-9mm we’ll offer the best cost and be producing the best [HDF] product available in Brazil,” explained Mr Maluf, whose family remain significant Eucatex shareholders.
He said the new plant will target a Brazilian market for thin fibreboard, under 10mm thickness, currently about 30,000m3/month, representing 15-20% of the total MDF/HDF market. Its quality HDF product will be aimed at applications where, because of Brazil’s climatic variations and humidity, MDF has been used incorrectly, he explained.
Examples of these include door jambs, moisture-sensitive furniture applications, such as in kitchens, and some mouldings, according to Mr Maluf. “We know that MDF.....is being used in the wrong way in several applications. Later on, we think that this will be recognized by the market,” he told WBPI.
As a major global exporter of hardboard, Eucatex intends to sell a significant proportion of its new HDF product abroad; despite the world economic crisis, the company saw its hardboard exports during the first quarter of 2009 soar by more than 100%.
Mr Maluf reckons his company will have sufficient capacity on its new HDF line to export up to 40% of its output, not least because Eucatex has attracted potential customers for it. This year the panel maker was exporting its products to 37 countries around the globe, the executive president estimated.
Despite its strong export record, São Paulo city-based Eucatex has not remained unscathed in the worldwide recessionary storm which has blown through Brazil. At home, the furniture sector was at a low ebb mid-year, with plummeting sales made worse by the credit crunch and sky-high interest rates and with no sign of hoped-for government tax relief.
In the traditionally slower first half-year, the resulting shrinking demand and low prices saw Brazilian panel makers shutting down for periods and laying off workers. Eucatex saw sales in April and May fall dramatically, though the figures for the first half year showed MDP products, including laminate flooring, down by under 3%. That compared well against the MDP market, which fell by 18% during the period.
Now the company is firmly focused on completing and launching its HDF/MDF plant. Dominated by its 21m long Dieffenbacher continuous press, with a 2.75m panel width, the new line is equipped to produce both HDF and standard MDF, but will concentrate on thin HDF.
Wood preparation and the refining section of the line are being supplied by Metso of Sweden, while the glue kitchen and blending units are from Pal and Imal of Italy, with saws, transport and finishing operations supplied by another Italian company, EMG.
Eucatex intends to start up the new, improved woodyard operation including chipping, wood handling and storage by the end of 2009. The HDF/MDF plant is scheduled to roll no later than the second quarter of next year, but recent projections have the start-up as soon as February 2010.
The panel plant is another example of Maluf innovation. Eucatex is breaking with the trend set by most of Brazil’s existing MDF producers of installing Siempelkamp technology. Instead, it chose a Dieffenbacher continuous press line. In addition, the new plant includes several unusual features in the wood supply and processing and panel forming areas.
Among these is the inclusion of high grade waste wood fibre in the HDF line furnish, drawn from Eucatex’s 20,000 tonne/month recycling plant at the Salto site. The recycling unit already fuels much of the energy needs of the site’s two hardboard lines, as well as providing material for the hardboard process.
Eucatex originally installed the US$15m recycling line to provide biomass for its heavy energy consumption, as well as offering a regular source of production fibre in the face of soaring wood prices and the firm’s own limited plantation resource.
Claimed to be the biggest wood recycling line in South America, the unit was last year turning out around 10,000 tonnes of material a month, 80% of it going to the energy plant. The new HDF line is due to use between 10-15% of recycled fibre in its furnish, according to Mr Maluf.
“This is another innovation we’re using in Brazil with great success. We save the best [recycled] wood for the product and the worst wood for energy. In Europe recycled wood use is very common, but not here.
“It’s saved us about US$50m in investments in plantation land and forests every year,” beamed the delighted Eucatex executive president. This big saving in capital costs results in a greater return on the firm’s overall investment, he added.
Another feature of the new woodyard being carved out of the crowded industrial site is more familiar at a paper woodpulp mill. Instead of employing large closed silos for chip storage, Eucatex is making use of a Metso-supplied open stack reclaimer system for handling the material.
This is a first for the fibreboard business, claims Mr Maluf, who argues that for this product, there is little point in protecting chips from humidity when you need to inject steam and water into it in the defibrator. Only in the US has the panel industry made limited use of stack reclaimers – in OSB manufacture – suggested Mr Maluf.
Much depends on the success of the innovative HDF project as to how, and how fast, Eucatex will develop as a fibreboard manufacturer. For the company, this plant represents a major experiment where it will test a number of novel process modifications and cost-saving approaches.
Eucatex is particularly targeting the high cost of resins used in fibreboard production. It is drawing on its 50-year experience of manufacturing wet process resin-free hardboard to modify the use of a raw material which can often cost more than the wood, revealed Mr Maluf.
He is reluctant to divulge details of modifications made to the new board line. Suffice to say that Eucatex has added several pieces of equipment on the line itself to “save resin” and to test different types of resin in the process.
“We have good hardboard technology experience which will allow us to use this technology in the HDF plant,” the president told WBPI in June.
His company’s priority right now is to complete the HDF/MDF project and to test the process innovations in the line to establish the costs involved and what products Eucatex can make.
“The HDF line is going to be a laboratory-laboratory in the first year for a big new plant we are planning,” declared Mr Maluf.
Again, he stressed that Eucatex is definitely not in the business of producing just another MDF panel. “If we decide to build a new [MDF] line, that will be different from what you now have in Brazil, like our first [HDF/MDF] line. [With that one] we have the first
Dieffenbacher press in Brazil for fibreboard,” he emphasised.
What of the future for Eucatex’s original panel business – hardboard? The company is now one of a dwindling band of producers of the wet process product that nevertheless continues to attract surprising demand from export markets around the world. This year saw Brazil’s other hardboard champion, Duratex, close three press lines at its second hardboard plant in Jundiai.
Despite his firm’s latest investments in thin HDF, Mr Maluf is emphatic about his commitment to hardboard. “We’re not going to drop out of hardboard. It is a very good product: low-cost and very profitable,” he responded.
Eucatex runs two Washington Ironworks press lines – among the biggest in the world, feeding a growing clientele in Brazil and around the globe with eucalyptus- based hardboard. The lines, which produce panels around the clock, continue to give good service after a series of modifications over the years.
“We are working year by year, upgrading our big hardboard lines. We are still working on that and will continue to do so next year (2010),” said the Eucatex president.
Looking ahead, Mr Maluf believes the first MDF production line will need to run for “at least six to seven months” before Eucatex can begin to make a preliminary assessment on how best to develop MDF products. The president anticipates his company will make a final decision on its big plant project in 2012.
Commenting on the first of this year’s consolidation moves in the Brazilian panel industry, Mr Maluf welcomed the merger of MDF and MDP leaders, Duratex SA and Satipel Industrial SA, as “healthy” for the market. Speaking in late June, he predicted further takeovers in Brazil.
But, where does he see Eucatex fitting into this new order, dominated by a few large Brazilian industry players? He was coy about revealing details of his company’s long-term strategy, but was confident it was in for the long haul.
“You have to know your business and know clearly where you want to be in five to 10 years from now. We know exactly where we want to be,” he declared. He expects his company to grow in coming years, though his target for Eucatex is not simply to be big, but to achieve greater profitability.
Growth could mean acquiring or merging with another panel producer in the next three to four years, he admitted. “But if we don’t merge or buy, and we see (market) space to put our products, we will set up a new plant,” said the executive, adding that demand for the products it creates is the most important thing for Eucatex.
Acknowledging the firm will face stiffer than ever competition in future, its president is bullish about its long-term strategy. Mr Maluf aims to emulate “companies like Apple” and others in the electronics and automotive sectors who are in huge competitive markets.
“They create products that make people desire those products,” explained the Eucatex boss, who appears determined that his independent market approach will guarantee a leading role in Brazil’s new-look panel making sector.

It is our fervent wish that this year’s survey and report of particleboard capacity changes in Europe and North America will not be repeated for its illustration of the dire conditions of the current state of the industry. Since the 2006 survey, the declining fortunes of the industry have been reported with sadness and trepidation. The author and WBPI editor have felt like gloom-laden messengers from ancient Greek mythology.
While there is no natural law of continuing industrial growth, it had been hoped that the western European and North American particleboard industries could at least enjoy modest growth linked to the socio-economic fundamentals. These hopes have been dashed in the past two years and 2009/10 show little sign of recovery. That is not to deny the rest of Europe, and indeed other parts of the world, their own development.
The author’s personal observation of much of the commentary and reporting of the panel industry seems to be rather impersonal and somewhat unemotional. The riposte may be to use ‘objectiveness’ as a justification and that may be a worthy approach. However, the author has been analysing the particleboard industry around the world since the early 1970s and these are unprecedented times. Perhaps it is time for Europe and North America to hand on the mantel of market leaders to other regions. Perhaps it is an economic inevitability. Nevertheless, it is a structural change that deserves a little emotion.
At a time when ‘wood is good’ is the message being received, the particleboard industry – and the panel industry in general – has seldom faced such a range of hoops and hurdles to be negotiated just to stay in business.
The 2009 survey of particleboard capacity in 2008 shows that aggregate European and North American capacity declined by 0.2% during the year.
Europe declined by 0.7% and North America, principally the US, declined by 3.5%. This is despite the known expansions in certain sub-regions. These changes are measured among the mills still operating at the end of 2008. Some mills are closed, it is believed, indefinitely. Other mills are taking extensive closures and short-time working. For the sake of comparison their capacities are included at their full annual rating.
The data collected is by no means perfect and we remain aware of the possibility of under-recording a number of current mill’s capacities. This would have been true for 2007, but by leaving the data unchanged for 2008, a like-for-like comparison is possible.

Even in Brazil the international credit crunch and short term market uncertainty, magnified by the launch of fresh capacity schemes by big MDF players, are now deterring more newcomers from actually launching ambitious investment plans.
While two plywood companies in southern Brazil, Indústria de Compensados Sudati Ltda and Indústria de Compensados Guararapes Ltda, both of Palmas, Paraná state, did each launch a new Chinese-built MDF line of 180,000m3/year early this year, other firms have shelved their new panel plans for the moment.
Even Sudati and Guararapes, who could have picked a better time to invest in an unfamiliar market, are finding the going tough at their respective plants in Otacilio Costa and Caçador, both in Santa Catarina state. Each one is operating a line supplied by Shanghai Wood Based Panel Machinery Co (SWPM).
Although the crisis was undoubtedly biting in Brazil early this year, the new players seemed to have found market niches for some of their output and in mid-year continued to invest in line and product enhancement. They strenuously denied industry rumours they were struggling and ready to halt production in the face of fierce competition from the big players.
Far to the north, at the tropical heart of Brazil’s traditional hardwood plywood producing region in Pará state, another group is proceeding with its own novel MDF project. Floraplac Industrial MDF Ltda, part of Pará’s plywood and forestry group Rio Concrem Industrial, plans to launch that region’s first MDF line using eucalypt and planted paricá, a high density, fast growing local native hardwood.
Floraplac too is employing Chinese technology, with a similar-sized line, also provided by the Dieffenbacher subsidiary SWPM, at its plant now under construction in Paragominas, Pará. In March 2009, the MDF line arrived in Brazil aboard a Philippine ship from China and is expected to be ready to produce panels between March and November 2010.
Floraplac, which owns 30,000 hectares of plantation paricá – South America’s biggest – aims to build up sales in Brazil’s fast-developing north east. It will take advantage of its location, close to this burgeoning marketplace, while competing MDF producers are forced to ship huge distances overland from southern Brazil.
It is this northern MDF pioneer that has caught the attention of some leading Brazilian panel makers, all too ready to dismiss as illusory the plywood makers’ dream of sky-high MDF prices obtained with the aid of advanced, low cost, trouble- free Chinese technology.
“They [would be MDF producers] were attracted by the MDF price and the low price of Chinese equipment. But MDF prices are dropping 20% this year.....they will discover later on that Chinese deals are only good for the Chinese in the long term,” declared Flavio Maluf, president of panel maker Eucatex SA. But Floraplac could make a go of it in the fast expanding northeastern market, he concedes.
Although one southern would-be MDF convert, Maseal Indústria de Compensados Ltda, seems to have pulled out of a promising Chinese MDF mill plan in Mato Grosso do Sul state at the last moment, another four Brazilian plywood makers are reported to be preparing to enter the MDF world.
According to industry sources they include Battistella Indústria e Comercio Ltda of Rio Negrinho, Santa Catarina state, along with three Paraná state firms: Guarapuava-based Repinho Reflorestadora de Madeiras e Compensados Ltda; Indústrias J Bettega SA of Bituruna and Miraluz Indústria e Comercio de Madeiras Ltda, based in Sengés.
Plywood companies’ evident enthusiasm for this change of product direction is now tempered by caution over investing at a time when even Brazil’s biggest MDF players are facing a fiercely competitive market and still have spare capacity.
“When you look at projects like this, you consider the market, and don’t really know how long it will take for the payback on your investment. That’s the major question causing many companies to hesitate at the moment,” explained Henrique Zanin, a Brazilian industry consultant whose firm, Organon Consultoria e Engenharia advises some plywood producers on the MDF switch and suitable technology.
He recalled how many plywood firms had reached “a cross-roads because their products were in decline, with costs soaring. They had to come up with an alternative [product] or their companies would just die,” stressed Mr Zanin, but added that they do come equipped with their own forest resources and experience of the wider wood products business.
Mr Zanin pointed to a gradual change of approach by several would-be converts. Some firms, deterred by the experiences of some pioneer counterparts who bought new Chinese MDF lines, are considering buying European technology. They are looking at acquiring upgraded secondhand German machinery in place of outdated Chinese multi-daylight press lines, he said when WBPI met him in São Paulo this June.
The Brazilian plywood makers are realising not only the complexity of learning to do business with China, but their dependence on a Chinese supplier for the plant’s adaptation for Brazil, its assembly and start-up. Chinese technology is still unfamiliar in a country dominated by European machinery and its more advanced, continuous-press lines.
The would-be MDF producers are discovering the relative benefits of greater efficiency and fibre and resin cost savings – particularly for thinner board – to be gained from a continuous line, against the less advanced batch lines offered by most Chinese manufacturers.
However, with Brazil’s industry dominated by ever-bigger panel groups and huge-volume MDF lines, the domestic market is developing additional niche business, conversely more suited to batch production. Today, with a number of smaller multi-opening press lines closing down across Europe, the Brazilian newcomers can acquire reconditioned older machinery ideal for niche volume business, according to Mr Zanin.
Organon consultants visit European countries to inspect machinery that may have run for as long as 20 years, and advise potential Brazilian buyers on further upgrades. They have also checked out Asian options, including China and Malaysia.
“Despite being secondhand, the European lines are more advanced and upgraded than the new Chinese equipment. What’s important is that Brazil has enough technical engineering skill to assemble and to upgrade such lines.
“But the Chinese [lines] are not discouraged here. They are still an option,” said Mr Zanin who believes that MDF makers with successful Chinese-equipped plants will probably continue to use such machinery.
After just seven months of operating, at the height of one of the worst international recessions ever, Guararapes’ MDF division, Guararapes Panéis, has a foothold in the market with its sanded and now melamine faced board. It recently installed a 72,000m3/year Brazilian low pressure laminate line supplied by the Curitiba-based firm Omeco Ltda which, in July, was running full-out, round the clock, reported general manager Mariano Dantur Do Canto.
“The short-cycle press for boards 2.75m long is running well. With this we have a good mix of products selling coated and raw boards,” he told WBPI. Guararapes’ sister convert, Sudati, has also been improving the quality of its pine-based MDF panels and its line efficiency. It installed a fibre mat water spray system for the line, which is capable of turning out board from eight to 22mm thickness. Guararapes was considering a similar installation, reported Mr Dantur Do Canto in August.
Some smaller panel makers, like the southern plywood newcomers, are said to be carving out niche markets as low-volume finished panel suppliers to smaller furniture companies in the big furniture manufacturing zones.
New MDF players, cutting their teeth on a new product – and investing during the worst economic crisis for decades – can certainly expect a rough ride in the market. Despite the prospect of a welcome rally in Brazil’s home market in the second half of 2009, these small players will be lucky to survive a battering as the leaders merge to form giant new groups.
But Brazilian plywood families come from tough and resourceful stock. They have proved determined and flexible in the face of change before, having successfully reinvented themselves from lumber to plywood producers. So, some of the newcomers could still survive.

Georgia-Pacific (GP), Weyerhaeuser and Louisiana-Pacific (LP) have been allowed their motion to dismiss a case alleging plywood price fixing, according to a legal information website.

UPM Plywood is reducing the number of workers at its Kalso veneer mill in Finland by 53 following recent employee negotiations

Dieffenbacher has acquired 100% of the shares of B Maier Zerkleinerungstechnik GmbH, Bielefeld with signed agreements that B Maier Zerkleinerungstechmik GmbH takes over the know-how and the patents of B Maier GmbH Maschinenfabrik as well as of AB Anlagenbau GmbH for the complete product range of size reduction technology. Production has not been included in the transaction.

Silvaris Corporation has announced another expansion of its OSBMarket website, saying it now covers online sales of off-grade OSB across the continental US and much of Canada.

BamPly bamboo panels imported directly from mills in China and marketed in the US by Pacific Western Wood Inc of Los Angeles qualify for LEED sustainable building credits, according to the company.

Kolkata-based Indian plywood manufacturer Century Plyboards (India) Ltd is planning to acquire an MDF manufacturer in Thailand, reports the Business Standard.

Ainsworth Lumber Company provided OSB for the world’s largest earthquake shake table test in Japan in July, according to a report by 100 Mile House Free Press.

Argentine particleboard manufacturer Sadepan Latinoamericana SA recently made investments in its industrial plant to expand panel capacity and improve the range and delivery of melamine laminated products.

Roy O. Martin Lumber operation plans to embark on a multimillion dollar expansion to the Martco plywood plant in Chopin, Louisiana, that will expand its production capacity from just over 400 million ft2/year to 500 million ft 2, reports The Associated Press.

To demonstrate how thick plywood can withstand the force of flying debris in a Category 3 hurricane, professors at the University of Hawaii have used a wind cannon to shoot an 8ft 2x4 at 35mph at two pieces of ¾in plywood cemented together.

Japan’s building materials imports declined by 16.9% in value in the first five months of 2009 to ¥413.1bn (US$4.4bn) from ¥497.0bn (US$5.34bn) for the same period in 2008, according to data released by the US Commercial Service.

Leitz GmbH, which is considered by many as the world leading manufacturer of precision tools for the industrial processing of wood, wood products and plastics, has recently unveiled its new Edition 5 of the Leitz Lexicon.

BASF have just increased the sales prices of its Kaurit and Kauramin glues by €15 per metric tonne.

Dieffenbacher has presented turnkey plants for the production of pellets.

Ainsworth Lumber Co has told more than 200 workers at its Savona plywood mill in British Columbia that it is idling the operation because of slowing demand and the rising Canadian dollar, the Kamloops Daily News reports.

The future of Arclin’s unfinished resin plant in Sexsmith, Alberta, depends on a healthy western US housing market, and whether curtailed OSB mills in the region reopen, the company’s president and ceo said. The plant, near completion, was idled a little over a year ago.

The Siempelkamp particleboard project in Belarus, the contract for which has been ready for signing since 2008, was deferred as the necessary budgets were not available.

Alas Holding LLC has acquired the Trus Joist Commercial Division from Weyerhaeuser, ForestTalk reports. Atlas will establish the division as an independent business, to be renamed RedBuilt.

Chilean forest products giant Celulosa Arauco y Constitución SA has made the next move in the consolidation game being played out in Brazil's wood based panels manufacturing industry.

The 13th International Exhibition on Woodworking Machinery (WMF 2010) and Furniture Manufacturing Equipment (FAM 2010) will be staged again in the China International Exhibition Centre (CIEC), Beijing, March 10-13, 2010. www.woodworkfair.com

The sales and marketing of Munksjö Decor have been merged into one global organisation operating from Aelen-Unterkochen, Germany. Director of sales and marketing is Norbert Mix.

Tsar Timber Distribution (UK) Ltd has recently gone into liquidation with the liquidators citing the market downturn as the cause.

Decorative laminate papers from MD Papéis have just received FSC chain of custody certification, which ensures the use of raw materials from forests that are managed correctly.

The fight against illegal logging could be taken to the next level if scientists are successful in extracting DNA from wood products to identify their origin.

Indonesia is to introduce a new certification system for log and wood products according to The Jakata Post.

Weyerhaeuser has signed a letter of intent with an undisclosed company over a possible sale of its Miramichi, New Brunswick OSB mill, ForestTalk reports.

The opening ceremony for the construction of the Phase II project of Qingdao Winlong International Chemical (Qingdao branch of Internet Wood Glue Co Ltd) has recently taken place. The project covers 8.9ha of land in the suburban area of the city of Laixi in Shandong province.

Research and technology centre, SATRA, will be presenting a series of seminars in Dongguan, China, during the week November 30 to December 4, 2009 intended to provide information and advice to companies involved in supplying product into Europe.

John Sununu, former senator from New Hampshire and a member of the Troubled Asset Relief Program (TARP), will address APA members and suppliers in the general session of the 2009 APA annual meeting, November 16, 2009, in Amelia Island, Florida.

Kastamonu Entegre, a leading player in the Turkish wood based panel industry, continues growth strategy despite the global crisis.

The roughly 90 employees at Norbord Industries will have to apply for a limited number of new jobs at the company that just bought the mill if they want to continue working at the site.

Loneliness in the forest is the top reason why many young forest machines operators quit their jobs after only one year according to research undertaken by a Umeå University student. It takes two years to become competent in the role.

Masisa is to invest US$55m in building a medium density particleboard (MDP) mill in Cabrero, Chile.

Weyerhaeuser’s wood products business is still taking heavy losses despite the best efforts of the timber giant to reduce costs.

The construction of Uniboard’s MDF and High Density Fibreboard (HDF) plant in Moncure, North Carolina is proceeding on schedule.

The difficult period that the Italian woodworking and wood based materials industry is experiencing has been confirmed by the economic figures referring to the second quarter for 2009.

Arespan Brocca Srl has been certified FSC-CoC over its whole range of wood based panels: blockboard panels, plywood panels and poplar particleboard Panoxil.

The Alpi Group has been awarded the OLB certification for its forestry operations in Cameroon. Granted by Bureau Veritas Certification, it ensures the legal compliance of the wood produced by the company.

Widely recognised as the North American leader in the production of sustainable particleboard and MDF, SierraPine has introduced Encore FR – a Class 1 (A) certified, no added urea formaldehyde (NAUF) particleboard.

A close cooperation between press and lubricant manufacturers is imperative to maintain operational reliability, says Siempelkamp.

Eumabois, the European Federation of Woodworking Machinery Manufacturers has added two further exhibitions to the ever-growing list of exhibitions it supports.

The new website of the Advanced Woodworking Training Center of Bangalor (India) has been recently ‘inaugurated’.

Weak pulp markets and reduced demand for wood fibre resulted in lower costs for wood chips and pulp wood in practically all regions of North America in Q1/09 according to the Wood Resource Quarterly.

Timber and oil palm group Ta Ann Holdings Bhd is putting on hold the construction of its maiden plywood plant in china as the current economic downturn has affected the country’s plywood market, says group managing director Datuk Wong Kuo Hea.

The Coveright Surfaces Group – manufacturers of surfacing materials for decorative, flooring and technical applications – has agreed to sell its subsidiary in Malaysia namely, Coveright Surfaces Malaysia Sdn Bhd (‘Coveright Malaysia’), to Analabs Resources Berhad (‘Analabs’).