Globalisation and consolidation are much-used words these days in every industrial sector and the panel manufacturing industry is no exception as large corporations flex their muscles in overseas markets.
Thus we see European-based companies buying existing mills, building new ones or entering into joint ventures, notably in eastern Europe and Asia, but also in Latin America.
However, with their vast home market, the North American panel producers are less evident in other parts of the world, although there is a very notable exception. To give you a clue, it is the one which is hardest to spell. You’ve guessed, I am sure. We speak of the Weyerhaeuser Company.
Headquartered in Federal Way, Washington, US, the company is a major player in the North American wood products industry and owns extensive forestlands there and elsewhere. Founded in 1900, today the company can boast of annual sales of US$22.7bn and currently employs about 55,000 people in 18 countries.
Worldwide,Weyerhaeuser, as one of the largest forest owners in the world, owns, licenses or leases more than 38 million acres of timberlands in North America, Australia, New Zealand and Uruguay.
Weyerhaeuser Forestlands International was founded in 1995 and manages about 600,000 acres of timberlands in joint operating interests in Australia, New Zealand and Uruguay.
To use a clothing market analogy, Weyerhaeuser’s entry into Europe was by the ready-to-wear, rather than tailor-made, route when it bought fellow US-based company Willamette Industries after a drawnout hostile takeover battle, which it finally won in February 2002.
This not only brought Weyerhaeuser the large North American Willamette forestry, paper and wood products business, but also a European operation comprising three mills in the composite panels industry – two MDF and one particleboard.
Prior to that takeover,Willamette had a turnover of around US$4bn,Weyerhaeuser US$15bn; and Weyerhaeuser had no involvement in panel manufacturing in Europe.
But to put that recent history into perspective, we have to go back rather further, to the establishment of a European MDF mill by probably the most famous name in that business, the Medford Corporation, which launched the Medite brand on an unsuspecting and uninitiated world in the mid-1970s with its mill in Medford, Oregon in the US.
It is difficult to realise now that only 20 years ago MDF was an acronym which meant nothing to most people – nor indeed did the full version, ‘medium density fibreboard’.
Many regarded it as an unnecessary invention when they had particleboard and plywood with which they were perfectly happy (in their ignorance) and which they had been using for many years by then.
Undaunted by such scepticism, Medite built a 150,000m3 MDF manufacturing plant in Clonmel, Eire (the Republic of Ireland) which opened its doors in September 1983. At the time, this was one of the world’s biggest MDF plants and prior to that opening, western European total MDF capacity stood at only 145,000m3. A brave move indeed, then. Or, as it transpired, a far-sighted one.
Geoff Rhodes, marketing and sales director of Weyerhaeuser Europe (and formerly of Medite Europe and Willamette Europe), who could arguably be called ‘Mr MDF’ for his enormous enthusiasm for, and contribution to, the promotion of the product to an often sceptical audience over the years, remembers it well.
While working for the Canadian sales agency, Seaboard International, in London in 1976, Mr Rhodes obtained the first British order for Medite, imported from Medford in the US. “This was a product with many advantages but a market had to be created,” he says. “We had a pioneering spirit and 30 years later we’re still pushing just as hard and still finding new markets and applications.”
The Medite mill in Clonmel is still one of Europe’s strongest MDF brands and has moved on from that first Washington Iron Works (WIW) multi-opening press.
The mill installed its first continuous press line in 1993. This was a Dieffenbacher CPS unit, 20.6m in length and 2.5m wide, which was installed specifically to give thin board capacity, down to 3mm thickness.
Until 2001/2, the WIW and Dieffenbacher presses ran side by side but then Willamette purchased a second Dieffenbacher continuous line and mothballed the WIW press.
The total MDF capacity of the Clonmel site is now 400,000m3 a year and all production is Forest Stewardship Council (FSC) certified, as the Irish forest resource itself is certified as sustainably managed.
In the late 1990s,Willamette, then owners of Medite, looked to expand their European operations and searched for a suitable mill to acquire with a good quality, sustainable and abundant wood resource.
“When Willamette bought Medite in Clonmel, it was only a small step for a US$4bn company, so it looked at growing its international business,” explains Mr Rhodes. “We were now European MDF specialists and identified the Mediland mill in France as a good basis for the expansion of our activities – and it was for sale.”
Built by French company Seribo in the late 1980s as a testimony to its own engineering abilities and with the idea of selling MDF plants to the rest of the world, the mill had a design capacity of 140,000m3 (but was producing only 70,000m3) from a Pagnoni multi-daylight press line.
It was then bought by a diverse Belgian industrial entrepreneurial group in the early 90s, purely as an investment.Willamette bought it from that company in 1998.
“Mediland had a good geographical position, in south west France in the Landes de Gascogne for more southern European markets such as Iberia – and it was a long way from Clonmel so expanded our market,” says Mr Rhodes.
Willamette invested in the plant, improving fibre handling, pressing and finishing and maximised the potential of the press, achieving 160-170,000m3 output today.
There are no overlaying facilities, with the emphasis being on the Medite approach of making specialist grades of ‘raw’ board.
Not content with this addition to its portfolio of mills,Willamette then had the opportunity, in 1999, to acquire another mill utilising the same French forest resource, but this time making particleboard – a new departure for the European operation.
The mill is located in Linxe, 30km from Mediland, and was already producing a well-respected brand of particleboard, Darbo, under family ownership.
It again had a Dieffenbacher continuous press, with a planned extension that the original owners had not carried out.
“Willamette completed those plans, extending the press from 33m to 42m and investing US$23m to increase the capacity from 250,000m3 a year to 430,000m3. We also invested heavily in overlaying, installing a Dieffenbacher short-cycle press line with annual capacity of 100,000m3,” says Mr Rhodes. The work, at what is now know as Weyerhaeuser Darbo SAS, was completed in early 2002.
The Darbo mill produces standard grade and moisture-resistant particleboard as well as flooring grade tongued and grooved (T&G) board and those melamine-faced panels.
Readers will now realise that the combined capacity of the Medite, Mediland and Darbo mills is just under one million m3. To be as precise as one can: 970,000m3 a year.
So to bring our story up to date, we now have Weyerhaeuser Europe Ltd with its Medite brand MDF produced in Clonmel, Ireland;Weyerhaeuser Mediland SAS producing MDF in Morcenx, France; and Weyerhaeuser Darbo SAS producing particleboard in Linxe, France.
The sales offices for Europe are located in Southend-on-Sea, Essex, England and at Roermond in the Netherlands, complementing the French sales office, which is based in Morcenx. All the European businesses come under the European Composite Panels Business sector of parent Weyerhaeuser, which also has offices in Brussels.
“We have three stand-alone brands [in Europe] and, from a marketing standpoint, had to present them as distinct brands but under the Weyerhaeuser banner – it was a challenge for us in maintaining a consistent approach to the market,” says Mr Rhodes.
“Commercially it has been very important to have specialist grades of MDF, such as flame-retardant, moisture-resistant and exterior and we can expect increasing growth in these markets.
“We have been producing exterior grade for 16 years now and are one of the few producers of it. Several of the many shopfronts in the UK made of Medite Exterior date back nearly 15 years and are still looking good.We are also producing the latest lightweight boards, following the investment in the Medite line in 2001/2.
“We also have complementary products from the two factories because Medite can produce down to 3mm thickness, while Mediland can make 50mm and above due to its Pagnoni press.”
The Medite mill, together with its standard MDF production, produces Medite 313 for use in humid conditions, Medite FR flame-retardant panels used in many prestigious building projects, Medite Exterior for external signs, shopfronts, fascias and mouldings, Medite ZF (zero added formaldehyde) for use particularly in museums and laboratories, and Medite FQ (flooring quality), a high density moisture-resistant panel for laminate flooring manufacturers. Medite Lite has a density of only 600kg/m3 and is the latest addition to the Medite range.
The mill offers Mediland LP for finely detailed work, Mediland M1 flame retardant, Mediland UL lightweight panel (550kg/m3), Mediland MH moisture resistant and Mediland MC. This last is a panel made from Landes region pine with highly refined fibres for delicate routing and overlaying with PVC foils, or lacquering.
Darbo also has its own range of branded particleboard products. These include Darbopan standard grade, Darbobati intended for areas of short exposure to humidity, Darbodal T&G panel, and Darbodeco overlaid with decorative melamine paper on both sides. A complementary product to Darbodeco is Darbochan edging strips.
Of course the company still has to face the strong competition in the market like everybody else and Mr Rhodes is the first to admit that things have not been easy in recent years. “Since 2001, the general value of the MDF market has fallen away due to over-capacity,” he points out. “The industry has had to get through the installation of three million m3 in the early 2000’s when decisions were made that resulted in a  consumption of around 7.5 to 8 million m3 facing a capacity of 11.5 to 12 million m3.
“Even with double-digit percentage consumption growth, we could still see overcapacity, so millions of euros have been lost over the last four years or so. The industry [in Europe] overall lost around 50% of its previously established value of production and by early 2005, we had only recovered about half of that value – the whole European MDF industry has been trading at a real loss.”
Mr Rhodes feels that the market at the end of 2004 was probably reaching 11 to 12 million m3 “So maybe in 2005 we will finally get it back into balance,” he suggests.
“The European industry hasn’t learnt to make investment decisions in a coordinated fashion because it is so fragmented. Maybe there is something to be learnt about the penalty which has to be paid for those kinds of decisions when they affect capacity so strongly. Those who made investment decisions in 2000 needed to realise that it could be an extended payback. But I am sure that MDF is a product that will continue to grow in usage and has much more technical potential.”

To say that the Chinese plywood industry is booming is, like much written about China, a gross understatement. According to official Chinese data sources, plywood production in China leaped 85% in 2003 to 21 million m3. While this magnitude of increase is probably impossible (either the 2002 data were understated, or 2003 overstated, in my opinion), the Chinese plywood industry is now probably the largest in the world, eclipsing even the US in terms of total production.
Rapidly expanding exports
Certainly there is no disputing the trade statistics, which show China moving quickly from being a major plywood importer in the late 1990s to being the world’s third largest plywood exporter in 2004 (behind only Indonesia and Malaysia).
Based on actual results through the end of November, we estimate that Chinese plywood exports in 2004 exceeded 4.2 million m3, or more than double the two million m3 exported in 2003. This is a larger volume than Malaysia exported in 2003, so it is quite possible that, in 2004/2005, China will surpass Malaysia to become the second largest plywood exporter.
More than 40% of the increase in plywood exports from China in 2004 was due to the explosive growth in exports to the US market. Those exports quadrupled in volume from around 100,000m3 in 2001 to 400,000m3 in 2003. In 2004 the flood gates opened and total exports of plywood to the US for the year were an estimated 1.3 million m3. This was approximately 31% of China’s total plywood export volume.
Another indication of the importance of the China-US trade: the International Wood Products Association (IWPA) announced in October 2004 that its “IHPA Grade Procurement Standard for Imported Hardwood Plywood” was recently translated into Chinese, to assist Chinese producers in understanding the grades and other requirements of imported plywood produced for consumption in North America.
While exports of plywood from China to Japan and Korea (the second and third largest markets in 2004; each about 8% of China’s total export volume) have increased relatively slowly since 2002, exports to the Middle East have accelerated. For the first time, Chinese plywood  exports to the Middle East region exceeded those to Japan and Korea in 2004. Exports to Europe have also increased rapidly, more than tripling in volume to an estimated 490,000m3 in 2004.
Chinese plywood exports have also been remarkably diverse. Up to the end of November, China had exported plywood to 159 countries, with exports of more than US$1m in product to 52 different countries. A Beijing firm, Chinawood International, has published an export directory for the Chinese plywood industry listing 90 companies with production greater than 3,000m3 per month, as well as some smaller, specialised firms and 26 companies involved in plywood exporting who are not producers. The directory, available from Chinawood at www.chinawood.org, or email hongfan@chinawood.org, includes contact details and production data for all major plywood companies.
Challenges facing Chinese industry
Despite the surge in plywood exports, the Chinese industry faces numerous challenges. First and foremost is the high (and increasing) cost of raw material. While much of the plywood in China is produced with domestic poplar or eucalyptus for the core, almost all face and back veneers are imported. The most important species have been okoumé and others from Africa, meranti and others from South East Asia, and birch from Russia.
The growth of the plywood industry, and especially the rapid increase in export volume, has paralleled China’s surge in imports of hardwood logs from Africa and South East Asia. Log imports from these sources totalled two million m3 in 1996, growing to 6.2 million m3 in 2001 and to more than eight million m3 in 2003.
However, as shown in the following chart, imports of African hardwood logs have plunged in 2004, dropping by 32% at the end of November compared with the previous year.
Imports from South East Asia have remained stable, but prices for all logs have increased sharply in 2004. For example, the average unit value of hardwood log imports from Africa jumped 30% in 2004, to US$260/m3, compared with the previous year. In contrast to the declining trend in imports from Africa, imports of hardwood logs from Russia increased by an estimated 13% in 2004, and now exceed the total volume of hardwood logs imported from Africa.
Of course, one factor driving the higher raw material costs in China is the weakening US dollar. The other critical factor has been the high cost of ocean freight. The combination of these factors has reduced profitability at most Chinese plywood mills, at the same time that exports have reached record levels.
At the 2004 China Wood Markets Export & Import Conference in Dalian (Oct 26-29), a panel of plywood producers complained that, despite surging exports in 2004, in the last quarter of the year a number of plywood mills had shut down because of high log prices.
But there are also other challenges facing the industry, particularly in Europe. In early 2004, the EU launched an anti-dumping investigation against imports of okoumé plywood from China. On November 12, the Official Journal published Council Regulation 1942/2004, which imposes a definitive anti-dumping duty on okoumé plywood from China. A few specific firms face a reduced duty (eg Zhonglin Enterprise (Dangshan) Co Ltd faces a 6.5% duty, while Jiaxing Jinlin Lumber Co Ltd was assigned a 17% duty). Imports from all other Chinese companies must pay an import duty of  66.7%.
But the Chinese industry is nothing if not fast on its feet – we understand in early December that a number of suppliers of okoumé plywood have already switched to using an alternative species (bintangor, or calophyllum species) from Indonesia for the face veneer, thus circumventing the duty.
There has been some concern expressed, by a very few customers, that the majority of China’s raw material for face stock is sourced from countries with serious problems of illegal logging (eg west/central Africa, South East Asia and Russia). However, to date  this ‘concern’ has certainly not translated into any lack of orders for Chinese producers. Whether demand for certified products actually translates into changes in China’s raw material sourcing policies remains to be seen.
Some continue to thrive
It is true that these challenges have forced some plywood producers to shut their doors. Notable examples include Global Timber Company in Shandong Province, formerly one of the largest plywood producers in the country. Global was totally reliant on imports of high-value hardwood logs from Liberia, and when international sanctions shut down that trade (China imported zero from Liberia in 2004), the company had to fold.
Another highly public failure was Huaguang Decoration Board, at one time the largest plywood producer in China. The company acquired a large radiata pine forest in New Zealand from Rayonier, but soon afterwards had to close down due to “financial difficulties”.
It seems that a number of companies in China have jumped on the plywood band wagon in 2004 without really understanding the industry, and without having a firm handle on raw material supplies. One exception to this is Jiangsu Shengyang Industrial Joint-Stock Co Ltd. This company has long been a major supplier to the Middle East market, and has maintained a flow of raw material from Africa, in part by investing in a veneer plant in Equatorial Guinea.
Prior to entering the US market, the company had export manager James Cheng make several extended trips to visit potential customers in the US and to learn about the market. Their exports to the US have soared in 2004, and the company proudly announced that it is now producing the only MDO (medium density overlay) plywood in China, and is  exporting it to the US, Canada and the UK.
Total production for Shengyang is 20,000m3 per month, including MDO, wire-mesh, film-faced concrete form panels and ‘fancy plywood’. About 70-80% of the company’s production is exported. In 2004, Shengyang also qualified for CE marking, through BM Trada in the UK.
Not all plywood companies are so heavily reliant on the export market. The Dehua TB New Decoration Material Co Ltd claims to have a leading share of the domestic market in China for its decorative plywood. Interestingly, the company early on focused on building brand recognition in the market and its Happy Rabbit brand is well known in China. While a happy rabbit might not be the most logical spokesman for a building material product in North America or Europe, this underscores the importance of understanding the culture in your target market.
The Chinese plywood industry has made rapid advances in improving product quality, however, much of the industry is still characterised by small mills and low quality.
An early exception to this was the plywood factory of CIMC Container Flooring. CIMC is the world’s largest producer of containers, and by necessity built its own plywood factory in Xinhui, in Guangdong province.
Container flooring has very high quality specifications, and the company established the first (relatively sophisticated) testing and quality assurance lab for plywood in China. The company produces about 120,000m3 of container flooring per year at its Xinhui plant and 30,000m3 at its Jiashan plant, using keruing for the face and back and eucalyptus (from imported Tasmanian regrowth logs) for the core. The company reports that it intends to expand production further in 2005.
Much has been reported in the trade press about the number of Brazilian plywood mills which have signed up with TECO or PSI/Pittsburg Testing Lab to have their panels grade-stamped for structural applications in the US market. This author was somewhat surprised to learn that Pittsburg/PSI has certified two mills in China. One mill, located north of Dalian, was producing sheathing panels for Forestwood Industries in New York state, using imported Russian pine and fir. As this article went to press, Pittsburg reported that that mill was no longer producing certified panels.
However, another mill in Linyi is producing sanded plywood with okoumé face and back and poplar core.While these panels are not for structural applications, Pittsburg reports that in January 2005 it will be visiting other interested mills in China, and it is possible other companies may also pursue this market.
Outlook for Chinese plywood
Given China’s achievements in the international plywood market, what are the prospects for future growth?
In our opinion, this breathtaking growth in plywood exports from China will slow sharply in 2005, due to increasing costs of log imports. In addition, there is likely to be some major consolidation in the Chinese plywood industry, as many of the companies who jumped on the bandwagon this year (including borrowing heavily to finance equipment purchases) will be forced to close, or in reassessing their profitability may decide to pursue other types of products.
However, the large domestic market for plywood in China and the very low labour costs there are considerable competitive advantages for the plywood industry. It seems quite likely that, despite its problems with raw material supply, the Chinese plywood industry will be a global force to be reckoned with for years to come.

Mieco Chipboard is a name that is very well known in the Asian panel industry, both for raw particleboard (chipboard) production and for its extensive valueadding facilities, having launched its first production line in 1976.

I have good reason to remember my first visit to Robin Resources’ factory in Mentakab in Peninsula Malaysia, because it was my first visit to any mill in South East Asia.
That was back in September 1995 and the mill was as yet unfinished.
It was one of those projects funded by a complete newcomer to the panel industry, Dr Robin Loh, who was, and is, an entrepreneur with a wide range of investments in many industries.
He purchased the 57-acre greenfield site in Mentakab – nowadays about two hours’ drive north of Kuala Lumpur (about four hours in 1995 before the motorway was built!) – in 1994, and founded Robin Resources (Malaysia) Sdn Bhd.
The production line was a joint turnkey project for Bison and Dieffenbacher, both of Germany, and incorporated a Dieffenbacher CPS continuous press with a 27.8m x 8ft pressing zone.

This was WBPI’s third visit to a company which has been involved in the Thai panel manufacturing industry since 1954. Our first visit was in late 1996.

After a long period of uncertainty, the former STA factory should have two MDF and two particleboard lines up and running very soon.
As a result of a joint approach between M P Particleboard of Thailand and Evergreen Fibreboard of Malaysia, in which MP was the lead company, a buyout of these four lines from the receivers of STA Group was completed in February 2004.
Evergreen Fibreboard has two MDF (a calender press and a Dieffenbacher continuous press) lines and a furniture factory in Johor state and a particleboard line in Segamat, as  well as two veneering works in Pasir Gudang, also in Johor.
This company, under the leadership of the Kuo family, has grown dramatically from a small veneering operation to its present size in Malaysia, with much of that growth having taken place in the last five or six years.

In the mid-1990s, the South East Asian panel manufacturing industry was growing at an unprecedented rate.

Panel making is something of a family tradition at Green Panel – the two brothers who own the company started their first plywood factory in 1987.

At the crossing of highway 70 and highway 259, Broken Bow Oklahoma, with about 5000 inhabitants, hardly ever finds itself in the media spotlight. It is a typical small American town in the Middle West, idyllically located between lakes and creeks, woods and mountains. The neighbouring State of Texas across the Red River, and the State of Arkansas, are both within a stone’s throw.
It was in this rural backwater of the US on April 13, 2004 that a record was shattered as a new OSB mill produced its first board on the world’s longest continuous press.
The Siempelkamp ContiRoll press is 60.3m long and 8ft 6in wide and belongs to the J M Huber Corporation, operating under the name Huber Engineered Woods.
J M Huber Corporation is a well funded medium-sized business in the US. It is not listed on the stock exchange and is wholly family-owned.
When Joseph Maria Huber from Munich went on his first business trip to New York City in 1883, nobody on either side of the Atlantic Ocean could have imagined that the business would one day reach a turnover of US$1bn.
The J M Huber Corporation is based in Edison, New Jersey. The products of the company range from raw materials to speciality chemicals and forest products, to building materials.
One of the significant business units of this multinational company is Huber Engineered Woods LLC. Headquartered in Charlotte, North Carolina, this group has developed into one of the most innovative OSB producers in North America.
People may wonder why an eastern USbased company should build a mill in Oklahoma, far from its base. The answer lies partly in the wood resource of southern yellow pine, partly in the availability of labour and partly in the fact that Broken Bow, and McCurtain County in which it resides, both support jobs and infrastructure revival.
Andy Trott, president of Huber Engineered Woods, is proud of all that has been achieved. Up to now his unit was in charge of four plants producing Engineered Wood Products (EWPs), mainly for the home construction market.
Construction of the Broken Bow OSB plant, representing an investment of more than US$130m, started in 2002.
That investment has created more than 250 jobs in the area, for example, in the service provider sector. As a result, US$25m will be flowing into the financial cycle of the town, county and state annually.
Andy Trott describes the close relationship between the company and the region in the following way: “We are not just a company in Oklahoma.We are friends and neighbours who wish for this state to grow and flourish.”
Huber says its ultimate business principle is to build trust. This does not only include making the right choice for a location but also selecting reliable partners who help to lead this and the other investments of the group to success.
Those partners are suppliers from different sectors, for example, plant engineering and construction, controlling and information technology, construction and assembly, and the service industry. After the assembly of four OSB plants – in Easton (Maine), Commerce (Georgia), Crystal Hill (Virginia) and Spring City (Tennessee) – all partners know their job and can rely on one another.
This positive attitude of all partners has also worked for Broken Bow. Just as in those other plants, the making of the heart, brain, veins, and all other vital organs of the Broken Bow plant was given to a group of companies that Huber felt had delivered in the past. Siempelkamp from Krefeld in Germany with its subsidiaries and associate companies ATR, Büttner, CMC Texpan, Imal, Pal and SHS received orders for Broken Bow.
However, machinery quality and integration of the latest developments are only one side of the coin.When it comes to a reliable partner the ‘soft’ factors, for example, punctual deliveries, also play a big role.
The Broken Bow mill has an annual capacity of around 550,000m3 a year, or 620 million ft2 (3/8in basis). That amounts to 1.88 million ft2, 3/8in (1,660m3) of OSB daily, as Ed Milburn, plant manager, points out proudly.
With such large production volumes, the first technical challenge is the drying of the wet strands. Büttner Drying and Environmental Technology, a Siempelkamp subsidiary, solved this task. The Broken Bow plant’s demand for dried material requires two single-path drum dryers. Due to transportation difficulties with drums of the size required, Büttner had them delivered in sections for final assembly on site.
The Quadradyn – an OSB screening innovation by Pal of Italy – had its world premiere at Broken Bow. This screens the strands on a roller system. The separation of the strands into fines, core and face is said to be precise and the composition of the future board is thus more homogenous and better structured. The fines are then super-screened with an oscillating screen and once again fractioned into fines for fuel and fines for recovery.
The latter can be added back to the core layer forming process after separate blending, using the Fines Recovery System.
After the dry strand bunkers, Imal, an associate company of the main contractor Siempelkamp, supplied the blending system for the fines and the density and thickness gauges in the press line.
Clarke’s International Inc supplied three 75-unit wet bins and three 75-unit dry bins (one unit equals 2,100ft3 or 60m3) to the Huber project.
The matforming station was supplied by CMC Texpan. Each matformer screens the strands in such a way that the largest strands are placed to the outer face of the mat, where they contribute most to the stiffness of the board.
The formed mat is directed through electromagnets and a metal detector, thus, metallic impurities are removed. Finally the edges of the strand mat are trimmed and before the mat enters the press it is checked by an Imal traversing x-ray mat density gauge.
The detailed engineering of the whole plant was realised by CPM Consultants Inc of Vancouver.
That massive ContiRoll is equipped with  a mat pre-heater system and screen imprint. The patented Pre-Heater ContiTherm has now been installed four times throughout the US in Siempelkamp ContiRoll OSB lines.
A mixture of hot air and steam is applied to the mat directly before it enters the press. Pre-heating the mat in this way results in an increase in press capacity. By means of adjusting the ratio between hot air and steam, the target temperature of the mat is precisely set. The mat is plastified in the pre-heater, reducing the specific pressure needed in the press. In addition the moisture content of the mat is raised, resulting in lower thickness swell of the board and better board properties.
Some products require the typical screen imprint on one side of the board which is why the press was equipped with the patented screen imprint system; if needed, an endless screen runs together with the top steel belt through the press. This produces a perfect screen imprint, which is identical to that which customers are used to seeing from boards made on multiopening presses.
BioReaction Industries supplied a biofilter installation for HAP and VOC emissions control on the ContiRoll.
In addition to the 7/16in OSB mass product, the plant also produces very specific products, for example, the 23/32in premium sub-floor, AdvanTech.
After leaving the press, the endless board is taken over by machines and equipment which have been delivered by SHS (Siempelkamp Handling Systems). It is trimmed on both sides and then cut to size with a double diagonal saw. The final master board size is typically 8ft x 24ft. For the production of rim boards, the master board length can be reduced to 12ft.
After a first quality check, the boards pass a reject station before they are cooled in two star coolers. The boards are then sorted and stacked according to quality and transported to the intermediate storage area, which utilises a fully automatic crane system.
The storage system serves as an OSB curing area and is also used to distribute the output from three shifts of press production to value-adding processes, such as sanding, cut-to-size and T&G, which run only in two-shift operations. The warehouse management system allows the operators to directly retrieve stacks from either the sanding line controls or the book saw control system.
There is no operator required in the crane area to store or retrieve stacks. The storage system also allows for re-storing of cut-to-size boards after they have been processed through the book saw system.
The sophisticated control system for this area is supplied by ATR Canada (today Siempelkamp Canada Inc) which engineered, together with ATR Germany, the plant automation system, starting from the dry bunker discharge up to the packing line.
Beside the sanding line, with its integrated sorting line (A and B quality boards), the book saw is another important production component at Huber. The cut-to-size book saw system can be fed from several sources: the crane storage system, the sanding line, or directly from the master board stacker.
The high production capacity of the book saw is achieved by processing of a ‘book’ of master boards with a height of up to 260mm (10in). This saw’s motor power is about 100HP – as much as the engine of a full-size car.
The book saw is versatile. Rim boards can be produced and then transported directly to the rim board packing line. Thus, the boards can be processed and packaged in their standard height of 260mm without further cuts.
Other OSB finished goods (commodity products) are cut-to-size according to operator- selected cutting patterns. Cut-to-size books of boards leave the book saw and are stacked by means of rake stackers.
The OSB stacks are then separated by a stack separation unit and are transported by a stack transfer cart to one of three packing lines, the T&G line, or back into the crane storage system.
The T&G utilises Siempelkamp’s board separation system which eliminates the gap between them, thus significantly improving the cycle time of boards.
In addition, without board gaps, the quality of the T&G is improved since break-outs at the board edges occur less often.
Precision Technologies, a division of Eugene, Oregon’s Willamette Valley Company, supplied two robotic spraying installations in the mill for marking up the packs. The 20ft x 20ft x 14ft robotic spray booths use six-axis industrial application robotic arms by Motoman, West Carrollton, Ohio.
For the last 20 years, OSB has experienced a similar spectacular development to MDF or particleboard since the 1960s.
While in North America in 1985 about four million m3 (4.5 billion ft2) of OSB was produced, in 1993 the number had already increased to about 10 million m3 (11.3 billion ft2). Then in 2002 the 20 million m3 (22.6 billion ft2) mark was crossed for the first time.
Sixty-one plants in the US and Canada cover about 70% of the North American building materials market for home construction with OSB. This means each American home is statistically made up of 6.4m3 (7,200ft2) of OSB.
In North America the OSB market is huge. Europe is following this trend with average OSB production increases of over 30%.

So, it’s official. The increase in demand for OSB from producers outside North America, reported in our survey this time last year, was not a temporary ‘blip’ but a sign of good times to come.
Although the market in Europe was showing signs of cooling down somewhat in the last quarter of 2004, the year overall left the whole industry with a collective smile on its corporate face.
Prices–and margins–continued the upward trend begun in mid-2003, with increases being reported over the period of as much as 35%. Indeed one manufacturer reported 40%. However, a softening in prices by about 10-15% in the last quarter was reported by most mills.
After some years of reporting gross overcapacity in Europe, we could now be looking at a situation where further investment is not only tempting, but positively necessary. Provided, that is, demand continues strong – and most manufacturers interviewed for this report are quietly confident that, though there may be a slack period in the first quarter of this year, the fundamentals are good for continued growth.
Europe
We begin our tour of European mills working from the west, which means the first company on our itinerary is Smartply in Waterford, Eire (southern Ireland). This is of course the former Louisiana-Pacific mill.
Capacity of this Washington Iron Works multi-opening press line remains at 325,000m3 for 2004 and the company produced and sold to that capacity.
“We are looking actively at expansion with consultants carrying out a study at the moment,” said managing director Lou Hess. “It will probably come in 2007, but that is just a guess at this stage.We have space for a new line in the existing building – just – but we also have room for a new building on our 60-odd acres.”
Mr Hess reported a very good market in the British Isles and in Ireland, with the timber frame housing industry growing in both.
“OSB3 is very well accepted and continues to be the growth engine for OSB,” he said, pointing out that in the early days OSB2 was the mainstay, for packaging, pallets and hoarding. Today, the majority of Smartply’s production is OSB3.
“We exported some production to the US but very much less than in the past, with good healthy growth in Europe.
“I think there will be some unique challenges in 2005, for example the added capacity in central/eastern Europe and Brazil may also have an effect on the market, but as the industry grows, the effect of each new addition is reduced because it is a smaller percentage of the existing capacity.”
Moving east to the UK, we find the Norbord mill at Inverness in Scotland, with an annual capacity of 330,000m3.
Until mid-2004, this company was known as Nexfor and until September, Inverness was Norbord’s only European mill.
Then the company acquired the Genk mill of Belgian family business Agglo for €50m to create Norbord Genk. That facility included an eight-daylight particleboard press line and a Dieffenbacher CPS continuous OSB line.
Norbord has put a slightly higher capacity figure than did Agglo on that OSB line, at 285,000m3 (the figure WBPI was given last year was 250,000m3). Thus total Norbord Europe capacity is around 600,000m3 a year, making it the second largest producer of OSB in Europe – and the third worldwide.
“Business picked up in Europe in July/August 2003 and prices kept on increasing monthly until May 2004 and we have not discounted since, although the market has not been as buoyant in the last couple of months,” said a spokesman in December, adding that he believed it would be more competitive in the first quarter of this year.
“A shortage of plywood had helped OSB but ellioti pine plywood is now returning to the market, presumably because not so much is going to the US. The housing market in the UK is still strong – the fundamental demand is still there,” he said.
He also mentioned that where OSB has replaced particleboard in the soft furnishing framing market, it is holding on to that business, in spite of its higher price, because the users have found that it is a better product and forms a small part of their total production cost anyway.
Incidentally, the UK will have to adopt CE marking of its panels from April this year, 12 months after the rest of the EU.
Next stop Luxembourg, which boasts one small OSB mill, owned by the Kronospan group. It was on target to achieve an output of around 200,000m3 for 2004 and plant controller Roland Weber said that this will be maintained for calendar year 2005 due to some investment in wood preparation (the 2003 figure was150,000m3).
“The market was very good in 2004 but now nobody is sure where it is going, but we are selling all we can produce,” said Mr Weber in December. “It is a privilege to be profitable this year,” he added, echoing the thoughts of many mills about 2004.
Somewhat unusually, Kronospan Luxembourg’s mill produces close to 50% of its panels in OSB4 grade. It also installed, in 2003, a press to produce phenol film-faced panels for use in concrete shuttering and this market is reported to be growing slowly.
Moving on to France, we find two OSB mills: Isoroy at Chatellerault and Kronofrance at Sully-sur-Loire.
For Isoroy, the actual output in 2004 was set to reach 110,000m3, slightly short of last year’s apparently over-stated capacity of 120,000m3. The mill produces around 1,000m3 a year of its fire retardant Pyroply product as well as producing a moisture resistant panel.
Kronofrance had already produced its nameplate annual capacity of 350,000m3 by September 2004 and expected to hit between 350,000 and 400,000m3 for the full year, with 400,000m3 for 2005.We have thus shown 2004 capacity as 350,000m3 in the accompanying table, with the extra 50,000m3 in 2005. The increase was due to increased feeding capacity to the ContiRoll press.
“We achieved an increase in prices in early 2004 because demand was good and we finally gained the true level of value of OSB,” said marketing manager Klaus Gerker. “We ended up with four to five months’ delivery from March to the summer but the order book was inflated; people didn’t need it all but they bought because the price was rising steeply and the longer the delivery time, the more they ordered.
“Also a lot of Brazilian plywood went to the US instead of Europe, for packaging and furniture and that helped OSB in Europe,” he said.
As reported by all mills, Mr Gerker confirmed that distributors’ warehouses were full by July/August and then came the summer holidays. After the holidays, stocks were high so buying slowed sharply.
“Thus demand for us fell in the fourth quarter, but demand in the market is still at a good level and we believe it will be in 2005 too,” said Mr Gerker.
Germany still has three OSB mills: Egger, Glunz and Kronotex.
Kronotex at Wittstock/Heiligengrabbe claims a nameplate capacity of 395,000m3 (2003, 385,000m3) and achieved production of 360,000m3 in 2004 – the figure predicted in last year’s report by spokesman Mr Mathes.
“We could probably produce 420-430,000m3 on this line,” he said last December. “From mid-2003 through 2004 the market has been very good. Before that it was terrible. It is going down a bit now, because it is winter and housebuilding is slow, but we have other markets in the Far East and North America, so it is not a big problem.
“The price increased by about 40% since 2003 and it is now down about 10 to 15% but I believe it will increase again in 2005 – it is normal to have a price reduction at this time of year.”
An error in our previous reports came to light here as the length of the ContiRoll press at Kronotex should be stated as 43.7m, not 48.5m. It appears some confusion arose in the past concerning total press length and effective press length, for which we apologise.
The same is true for another German mill, Glunz in Nettgau, where the effective press length is again 43.7m and not 50m as stated in our previous reports.
Capacity at that Glunz mill was increased in 2004 from 360,000m3 to 400,000m3, by “various technical developments producing a higher speed on the line”, and various options are being considered for more major increases in the near future.
Steam pre-heating or a press extension by 10m to 53.7m are possible moves under  consideration but the advantages have to be weighed against the disadvantage of a long stoppage in production to effect such an upgrade.
However, a spokesman at Glunz said that he expected to add a further 12% to the total production volume in 2005.
There is also talk of a possible second line at Nettgau instead of an upgrade and this is subject to a decision by parent Sonae and rumoured to be a possibility in 2006.
The mill has exported a lot of production outside Europe and the spokesman said he did not see a great increase in demand in Europe in coming years and that exports would be a necessity, with North America and Asia seen as target markets.
The third German mill is owned by Egger and located at Wismar in the north of the country. The net pressing length of this ContiRoll press is 38m, as previously recorded.
The mill produced to its full capacity in 2004, although the effects of product mix of course means that the 360,000m3 stated in our table is for guidance, as in all cases.
“At the end of 2004, the hype in the market decreased to a more normal level and this was a good development because hype is not good for the producers,” said spokesman Mr Sprockhoff. “Customers can get angry because of the extended delivery time and the pricing and think you are just trying to get the maximum out of them.We were on over six months’ delivery in the middle of the year and some orders were still outstanding in early December, but those will be finished by Christmas and we will then return to our normal three or four weeks’ delivery,” said Mr Sprockhoff when interviewed in early December.
He also pointed out something which is all too easily overlooked in a market of rising prices, when it is often assumed the increase is all profit for the manufacturer.
“We have had huge cost increases as well – our wood costs increased by more than 40% because of a new pulp mill which started in 2004 about 200km away. It affected all the panel industry in Germany. The resource is certainly there but I think prices will stay at a high level.”
Egger says it will always continue to optimize its production at this relatively new mill, but has no immediate plans for expansion at present.
Moving east again to Poland, there is the Kronopol mill in Zary. It ran to its full capacity of 350,000m3 again in 2004, according to managing director Johann Bitzi.
“We are planning value added products at Zary for OSB and we have many ideas,” said Mr Bitzi, whilst declining to elaborate on that theme.
Turning to raw OSB markets in Europe generally, he said: “North America provided a certain quantity of sales but is not a longterm solution because of the transport distance.
There is a major market all over Europe and eastern Europe is growing rapidly in all panel products and will continue to increase.”
Last but not least among European mills is another one of the Kronospan empire, this time in Bulgaria.
As far as we are aware, there has been no change to capacity here and so it is listed at the figure given by the company last year – 120,000m3 a year in OSB2 and OSB3 grades.
Saving the biggest ‘news’ until last, there are of course two large new mills planned for the east of the continent of Europe.
The same branch of Kronospan that owns Kronopol is building a new OSB mill on a 45ha site in Slubice, also in Poland, with a planned capacity of 450,000m3 a year. It will employ a Siempelkamp ContiRoll press of 43.7m x 9ft and has a designed running speed of 1,000mm per second. That line is due on stream at the end of this year.
A second new line is also planned by the Kronospan Group, this time at Jihlava in the Czech Republic. Expected to come on stream in September/October this year, the mill will have a capacity of 850m3 per day, with the facility for the press to be extended in the future to reach a capacity of 1,850m3 a day.
Chipping, drying and screening would also be expanded by adding a second line of this equipment if and when the press is extended.
The press supplier this time is Dieffenbacher, which is supplying a CPS continuous press of 38.5m, initially, and 2.8m width.
These two mills alone will add over 730,000m3 to continental European OSB capacity, by the end of this year.
In December, we learned that Russia’s National Timber Industry Company (NTIC) intends to build a €100m plant in the Vologda region. Anticipated capacity is 300,000m3 a year. It is intended to attract funding from the European Bank for Reconstruction and Development and four other potential investors.
The high level of demand for raw OSB board has rather put thoughts of valueadding to the back of some producers’ minds, but there are melamine faced, phenol faced and specially sanded panels on offer, as well as fire retardant and moisture resistant boards; and not forgetting the more common forms of value-adding such as tongued and grooved board and cut-to-size panels.
EPF figures
The European Panel Federation (EPF) confirms the strong growth in the OSB market over the past 18 to 24 months in its statistics and its Newsletter.
The Federation, which represents a large proportion of the panel manufacturers in Europe, reports an average 20% growth for production and consumption in the first nine months of 2004.
“The massive 25% upswing in the first quarter of 2004 was followed by 17% growth in the second and 19% in the third quarter. During the first nine months of the year, OSB production increased by 20%, compared to just a 10% increase over the same period in 2003. This growth was mainly driven by firm exports, rising by 17%, while home sales  rose by 7%,” said the Federation in December. “OSB is firmly expected to reach a year end production volume of 2.7 million m3, against a demand level of 2.4 million m3.”
The newsletter went on to address issues of future development in the industry:
“With demand accelerating rapidly, the industry would come close to its limits [in 2005] if the capacity were to remain at three million m3. The two investments that have been announced for 2005 (Jihlava and Slubice] should therefore, in contrast to the serious disruption that was caused by the four new plants in 2001, be able to meet real market needs.”
Latin America
Latin America’s few OSB producers enjoyed the rich fruits of the North American boom for this panel, but also saw growth within the region itself during 2004.
Soaring prices and strong demand in the US for the high quality pine panels produced by Masisa do Brasil Ltda at Ponta Grossa, Brazil have kept the firm’s 350,000m3/year Dieffenbacher CPS line running flat out for much of 2004.
Earlier in the year, US exports represented an estimated 75% of the company’s total OSB business. In a slow, but gradually expanding regional market, demand for a stable, quality substitute for plywood in Brazilian niches, such as structural furniture components and heavy duty packaging, accounted for almost all the rest.
The company has been trialling a special 18mm moisture resistant OSB with several customers. It adds melamine to the regular phenolic resin to improve the panel’s water resistance for use as concrete form in the construction sector, according to Masisa.
Masisa do Brasil, an offshoot of Latin America’s premier panel maker, Masisa SA of Santiago, Chile, has seen its export market transformed since 2002 when OSB prices hit rock bottom. Since April 2003, business in the US has accelerated and higher prices have helped lift the panel’s fortunes.
Masisa believes the good reception given to its products in the US has been enhanced by its continuous line technology and clear pine wood quality from thinnings. But the firm had to overcome teething problems in its continuous production technology, including suffering a run of ‘blown boards’ resulting from uneven steam release in the degasification process.
Masisa recognises OSB markets in Latin America will only develop slowly. But it realises too it must maintain sufficient capacity and a market presence from now on, to take advantage of coming growth. The firm is also clear that would-be OSB competitors are watching its performance closely before committing themselves to such a new product in the region.
Elsewhere in Latin America, US giant Louisiana-Pacific Corporation (L-P), a pioneer in the region, is developing a viable OSB business across South America.
L-P Chile’s modest 133,000m3/ year line at Panguipulli, Chile, launched in 2001, has  created a solid national market for the panel while exporting substantial amounts, especially to the US.
L-P Corp of Nashville, Tennessee revealed last year it was so pleased with the success of  its Chilean venture, it was considering doubling OSB capacity there after less than three years in South America. One option was to ship a used 130,000m3/year OSB line to Chile from the L-P site in Montrose, Colorado, closed down three years ago.
In early 2004, L-P Chile’s existing modified Schenck/Motala KMW eight-daylight press line was exporting increasing amounts of siding and ‘Smart Trim’ products to the US construction sector. Foreign sales accounted for more than 60% of line output at that time.
But finally, the US wood products group decided to source the siding and trim products, heavily in demand in the US, internally.
L-P announced a plan to switch production to specialities at its panel mill in Hayward, Wisconsin by July 2005, rather than expand the Panguipulli site immediately.
Even so, today the Chilean OSB line is fully sold with around 90% of its output consumed in the small but established national market. Other board is being exported to Central and South American countries, as well as to the Far East.
L-P is firmly committed to its South American operation, seeing it as a valuable base in the OSB market of the future. “We’re still looking at the expansion option in Latin America. Although it was felt this was not the correct strategy just now, we are still ready to go there,” said L-P’s investor relations director, Mike Kinney.
L-P Chile also forms a useful bridgehead for the group to supply another potentially huge OSB market – Asia. Freight rates for shipping from Chile across the Pacific to the Far East, particularly China, are attractive, said Mr Kinney.With signs of change towards wood based building techniques already apparent in China, LP will be well placed to tap a growing market beyond the next decade, he suggested.
Long standing plans for another 350,000m3/year South American OSB plant, this time a US-backed project for Venezuela, has been confirmed as “on hold”.
Privately-owned forestry and real estate group Trillium Corp of Bellingham, Washington State confirmed in 2004 the construction of its OSB line in Macapaima is still not ready to go ahead. The plant site, along with some equipment, appeared abandoned and semi-derelict when WBPI visited Macapaima in March last year. It was back in 2001 that group subsidiary Forestal Trillium de Venezuela took delivery of the 12-daylight Dieffenbacher press line equipment. In 2002, Trillium blamed lack of funds and political uncertainty in Venezuela for not completing the project.
Summary
There is continuing talk of OSB production somewhere in Asia becoming a reality but no firm signs as far as we are aware at WBPI.
Some in the industry feel that China is the most likely first producer, in that areas of the country with a temperate climate could use it for construction where the more humid part of Asia could experience limitations to the use of OSB. However, it is hard to see where suitable raw material would come from within China.
Thai Plywood did tell WBPI on a recent visit to its MDF mill near Bangkok that it was considering OSB as a possibility for the future because it is finding it increasingly difficult to source suitable logs for its plywood production. Other mills in South East Asia are also considering the possibility and OSB is being imported to the region – and to China – which may well prime the market for local production.
We feel that OSB manufacture is likely to come in Asia but would not like to guess at the timing.