Shijiazhuang may be almost unpronounceable to a westerner, but it is the capital city of Hebei province and is located three hours’ drive south west of Beijing.
Hebei Yingyang Man-Made Board Co Ltd started life in the panel industry in 1993 with a particleboard line made by Chinese company Sichuan Donghue Machine Co. It has a 12-daylight, 4ft x 8ft multi-opening press.
This line originally had a tiny capacity of 15,000m3 a year but has since been upgraded to 50,000m3.
The company’s second line, for the production of MDF, came from the same supplier, and had the same size press. It produced its first board in 1994. The capacity of this line was also subsequently increased, this time to 40,000m3 a year.
Donghue Machine Co closed down soon after Hebei Yingyang bought this line.
The company’s third line, built in 1998, was also for MDF and was this time supplied by  Shanghai Wood Based Panel Machinery Co Ltd (SWBPMC, now known as SWPM). It had the first 15-daylight press in China, with dimensions of 4ft x 16ft. The original capacity was 50,000m3 a year but this has since been increased to 100,000m3.
“During 1994, many factories were producing MDF in China and there was felt to be enough capacity,” said general manager Fan Hua Zhi. “But after I bought this first 15-daylight press, SWBPM gained a good market for this larger capacity press and sold many more.”
Next came the decision to buy a continuous line. “We bought this line because China was getting stronger and the people’s standard of life was improving and there was demand for a good quality board, so we decided to buy an imported line,” explained Mr Fan.
The whole production line was supplied by Dieffenbacher and it produced its first board in December last year.
A new building was erected on the 450mu (30ha) site in Zhengding, near Shijiazhuang, to accommodate the new line as there was plenty of space available on the site. The property also houses Mr Fan’s wife’s business. This involves making woven plastic sacks, using a mixture of recycled plastic and plastic pellets from an outside supplier which is all melted down in the factory. That business alone employs 600 workers in addition to the 1,300 employed on the panel lines, 70 of whom work on the continuous MDF line.
Construction of the new MDF building commenced in October 2003 and the first board came off the line in September 2004 – another rapid project completion which is common in China, it seems.
Raw material for the MDF production is a mixture of bought-in chips, shavings and sawdust from furniture and woodworking companies, and logs. It also includes  highquality shavings which come from the production of round, pointed wooden poles by another local company and which are delivered by a fleet of three-wheeled trucks.
The logs are a mixture of 50% softwood and 50% mixed hardwood, mainly poplar.
The Dieffenbacher CPS continuous press is 23.2m x 8ft and has a design capacity of 130,000m3.
“At present we can produce up to 150,000m3 since we started five months ago, and I hope to reach 200,000m3 by this May,” said Mr Fan in early April.
The CPS line is used to make 1.3mm to 3mm thickness MDF, while the older  multidaylight line is used to produce thicker boards, although 5mm and 6mm boards are sometimes made on the continuous line.
Main markets for the thin board are for furniture, wall panelling, doorskins and similar end-uses, explained the general manager, who is also the owner of the company and was formerly a farmer.
Although Dieffenbacher was responsible for the supply of the complete plant, Mr Fan said that his staff put the line together themselves, under the German supplier company’s supervision and equipped with its drawings.
“Dieffenbacher was responsible for supervision, but we built the line ourselves and made some non-standard parts ourselves. Most factories invite specialist contractors in but we did it ourselves.We saved a lot of money that way and this was also a first for China,” said Mr Fan proudly.
For example, said Mr Fan, air grading, forming and pressing and all electrical controls were Dieffenbacher responsibilities, while panel handling was built by a local company known to Hebei Yingyang, again to Dieffenbacher’s drawings. The extraction system and silos were made by Mr Fang’s staff.
The chipper was a “special one” from a Chinese manufacturer, but the refiner was supplied by German company Pallmann and is a 54in unit. Because he uses small diameter roundwood, Mr Fang said he does not employ a debarker.
Glue preparation is from Dieffenbacher. Italian company Imal supplied thickness and blow detection equipment, while board finishing employs a six-head sander from another Italian manufacturer, Imeas.
Yingyang has two Chinese-made shortcycle lines on site, but these are only used to produce panels to customers’ order. Mr Fan explained that the local market for low-pressure melamine faced panels is not very good.
Mr Fan’s next project/dream is to build a continuous particleboard line which he said he would like to buy from Dieffenbacher again.
Funding for this project is, however, not easy and is to come, in part at least, from the closure, dismantling and sale of the SWBPMC multi-opening MDF line to a company in Henan province. The line was already dismantled and awaiting shipment in April this year.
Mr Fan is also seeking a partner to help him with establishing this continuous  particleboard line as funding it alone so soon after the MDF line continues to be a problem for him at this time.
“Our aim is to use recycled wood collected from farmers in the region, mainly from the demolition of old houses, to supply the raw material for the particleboard line,” said Mr Fan. “We are already using such material for our existing line.”
I asked Mr Fan why he was so keen to build a continuous particleboard line and he said that the local market needs a good quality particleboard and has suitable waste to use as raw material, thus enabling him to produce the panels more cheaply than with fresh wood.

With MDF/HDF continuous production lines already in production in Danyang in Jiangsu province and Fuzhou in Fujian province, Dare Global started up its third Siempelkamp-supplied line on the outskirts of Maoming city in Guangdong province in December last year.
The company’s fourth project, a 500,000m3 a year particleboard line in Sanming in Fujian province, is due to begin production at the end of this year.
The first MDF/HDF line, in Danyang, started production in July 2003 so the company  has made a rapid and strong entry into the panel business in the last few years. That is true too of the  rapid start-to-finish times for construction of all three lines – for example, civil construction work for the Maoming line began on December 23, 2003; first board was produced on December 8, 2004.
So why did Dare select this location for its third mill? “We go where the raw material is available and Guangdong also offered a good market for MDF and HDF,” said Li Zhengliang, general manager and director responsible for the Maoming factory. “We also wanted a location where there were no other large MDF mills too close to us.”
That raw material is 70% pine at present, but in the long-term the mill will need  eucalyptus as well. “There are pine plantations in this area, but it is a slow-growth timber,” explained Mr Li. “We plan to start our own plantations when we can find some land but it is a question of whether the farmers will sell that land to us. At the moment, they prefer to grow the trees themselves – they regard the land as their ‘green bank’ and if they plant eucalyptus they can get their investment back in four years with little work.
However, we prefer to have control over at least part of our raw material supply.”
The company employs 20 travelling buyers to seek out and buy wood for the mill.
And nothing is wasted as some sawmill waste is used to make pallets.
The other major raw material, resin, is made in Dare Global’s own resin plant on the Maoming site.
At present, design capacity of the mill stands at 200,000m3, but on an 8mm thick basis, Mr Li believes the line will achieve 280,000m3 – and he is speaking from experience as both his company’s other lines are running comfortably above design capacity.
“This line was intended to make thin board but we have demand from different markets for all thicknesses of board and that is a problem for me,” said Mr Li. “Our main market is Guangdong province, but we also export to the Middle East and the US; both MDF and HDF for flooring. In fact, the group just received an order for 10,000m3 a month for export, and although it is not finally decided, the whole order will probably be supplied from this mill.”
That final decision rests on factors such as raw material supply, transportation costs and sea freight, he explained. “Such a big order must have guaranteed quality, quantity and on-time delivery as well as getting the costs right for both board and logistics.”
While the equipment at Maoming is essentially the same as that installed at Dare l in Danyang, this mill is set up to supply a different market in terms of panel sizes.
Hence a more sophisticated book saw line by Siempelkamp Handling Services is employed here. “We currently have 12 different cut sizes according to customer  requirements and, while we can make multiple cuts across the width of the board, we only have two saw blades to cut the length at the moment,” said Mr Li. “Thus we are discussing fitting a third blade, then we can cut anything because the market is now asking for all kinds of cut sizes: our orders are calling for special sizes, such as for blades for ceiling fans for hotels and restaurants.
“More and more products are using MDF and, as the price of steel increases, some products are being switched to MDF.”
Only raw board is produced at Maoming as the strategy of the Dare Wood Group is to set up dedicated lamination plants near the cities where the market is to be found, he explained. The main production is in E1 grade board with some E2 for laminate flooring where the board is encapsulated, but Mr Li hopes to produce E0 in the future.
I asked him if any further lines are planned on this large 600mu (40ha) site.
“It depends on the wood raw material supply and the market of course, but we do have  space available for another line here,” said Mr Li. “But at the moment, I think further MDF production in China is unlikely because by 2005/6, all the new big-capacity lines will be in full operation and that will mean a lot of capacity on the market, so we will have to wait and see what the result of that is. Also, you never know – the market can change a lot.
“In the last two or three years, a lot of big-capacity lines have started up but most of them are not yet running at full capacity and it will make a big difference when they are. It means the wood raw material price has increased a lot and margins are getting less and less – especially here in the south. The north is not quite so bad because there are not so many big lines there – Beijing Sinhua [Krono group] is the largest.
“Maybe in three to five years things will be more stable and more farmers will have planted trees, it is very difficult to say.”
There is much talk of anticipated growth in particleboard production in China but Mr Li is not so sure: “The market price is always much lower than for MDF and the most important thing for particleboard is that the surface quality should be good. It is also less demanding on raw material [wood] in terms of quantity for a lower density product, and wood quality, and there is a big demand for furniture in China so particleboard should have a good market. The main problem is surface quality and screw holding characteristics.
“Particleboard in China today is generally of such poor quality that people don’t like it. It would need a lot of sales effort even if you did make a high-quality particleboard and there is also the issue of edge-moulding [compared with MDF].”

It was 10 years ago that Asia Dekor saw the market opportunities presented by the new wonder product, laminate flooring. It built its first factory to laminate bought-in HDF boards in the city of Shenzhen, Guangdong Province, in 1995, with a capacity of five million m2 of laminate flooring.
The company then went on to start up a second line in 2000 with twice the capacity of the first, giving Asia Dekor a total annual output of 15 million m2.
Both lines are equipped with Homag sawing and tongue-and-groove equipment and with Dieffenbacher short-cycle presses.
The brand name for Asia Dekor’s laminate flooring is Power Dekor and its symbol is an elephant. The company has advertised extensively in China to ensure that both name and symbol are well recognised by consumers as representing a high-quality, powerful product. Today, that brand name is also shared by another Chinese producer, Dare Global, in a joint venture.
The next logical step for Asia Dekor was to secure the supply of HDF to guarantee the future success of the company and that is exactly what it did.
On July 23, 2004, the first HDF panel rolled off the company’s production line in Heyuan, also in Guangdong province.
We visited the site of this factory in March 2004 while it was still in the final stages of construction and this seems to have become something of a habit between WBPI and this company, as you will see.
The Heyuan factory has a Dieffenbacher CPS continuous press with Andritz refiner and Vyncke energy plant and turns out at least 200,000m3 a year of HDF and MDF. The HDF is of course used for its own laminate flooring production, but also finds a market in gift box manufacture, which employs 2.7, 2.8 and 3.0mm board.
The latest project for this rapidly growing company is a continuous particleboard line currently under construction in Huizhou in Guangdong province. Cue for another WBPI visit, then.
Asia Dekor has purchased a large area of land outside the city beside the Dongjiang River to construct its new factory and at the time of our visit, the frame of the main production hall was under construction and the foundations for the Dieffenbacher CPS press and the two chippers were being laid. Production is to start at the end of this year.
The planned capacity of this line is the same as the company’s MDF line – 200,000m3 a year.
Perhaps this is one of the first of the many anticipated new mills for particleboard in China which have been talked about for some time; general manager of the Huizhou plant, Mr Zhang Jian Yan, seems confident of demand for the mill’s anticipated production.
“We are building particleboard now because it is more profitable in the Chinese market [than MDF] and is production that is missing from that market,” he says. “There is currently very little production in China, it is nearly all produced on Chinesemade machines and the quality is poor. The particleboard price in China is also rising.”
The target market for Asia Dekor is the furniture manufacturing industry and that is developing rapidly in China.
“There is more furniture being exported from China and with the value of the euro rising daily against the Yuan, China cannot afford to import particleboard from Europe; and the price of the board in Europe is also rising,” says Mr Zhang. “There are also more foreign-owned furniture factories in the country who want to buy their particleboard in China, while demand on the domestic market is increasing too.
“I have visited two US-owned furniture factories in Shanghai which only use real wood veneer and they want particleboard as the base panel. Every furniture factory that wants to export its production needs particleboard.” Mr Zhang also suggested that there was an environmental angle to consider, since particleboard can be recycled.
That seems to answer the question “why now?” The next question is “Why here?” “The biggest furniture export region in China is in the south, with the main centres being in Guangdong province,” says the general manager. “In 2003, more than RMB24bn (US$2.9bn) of furniture was exported from here.”
The three main furniture producing cities in the province are Shenzhen, Donguan and Guangzhou. “We are well-positioned to supply all three,” says Mr Zhang confidently.
This also has some bearing on raw material. As Mr Zhang points out, furniture factories produce waste and this can be used as raw material for particleboard production.
However, that is for the future – maybe two or three years down the line. In the meantime, there is apparently no shortage of wood in Guangdong province, according to Mr Zhang who has worked extensively in the panel industry in China.
“We have carried out a market investigation and there are enough suppliers in this region and a lot of forest here, plus we have our own plantations and forestry company. We will plant 80,000mu this year ourselves  and the government is strongly supporting forestry in this country.”
The design and layout of the new particleboard line is the responsibility of German complete-line supplier Dieffenbacher. The front-end package has been sub-contracted to Pallmann of Germany, but using a locally made chipper.
Dieffenbacher is supplying forming, pressing, cooling, dryer, panel handling and glue preparation from its own resources. The energy plant will be from Vyncke of Belgium. Sawing is by Anthon of Germany and the factory aims to produce a full range of cut-to-size panels to customer order.
The area of the Huizhou site is around 218,000m2 in total and was mostly covered with lakes for fish farming before Asia Dekor arrived. Thus a lot of infilling has had to be done, shifting earth and stone from a hill on the other side of the main road which runs through the site.
Civil engineering works started on November 28, 2004 and most construction work was to finish around the end of June, ready for machinery to be installed in July.
Production will be mainly of thin board because there is very little currently available in China. Thus the main thickness will be 6mm for doorskins and packaging, but Asia Dekor will also produce 9, 12, 15, 18 and 24mm for furniture manufacturers.
“We will also have some downstream production here with melamine facing, but we have not made a final decision on that yet,” said Mr Zhang. Asia Dekor owns another area of land adjacent to its temporary offices and will eventually build a short cycle press line factory there to supplement that which it already has in Shenzhen.
The river running beside the site will provide some transport of wood raw material, when the water level is high enough – generally in the typhoon season in the summer.
An area of the site is set aside for the Asia Dekor Institute for training staff from all the company’s factories, as well as customers and suppliers. The company does not  anticipate any problem in finding suitable staff to train. Another building will provide accommodation for the expected 290 workers.
Also planned is an office block to replace the temporary accommodation the company currently occupies.
Asia Dekor’s factory is only one part of a large industrial zone taking shape at Huizhou for furniture production and a meeting was to be held between the local government and the company, in May, to finalise plans for this development.

Guangdong Weihua Holding Co Ltd is a privately-owned company, founded in 1992 and today has 12 member companies engaged in various businesses, including civil engineering, estate development, agricultural research, urban water supply, and copper foil panels, as well as the manufacture of MDF and HDF panels and furniture manufacture and wholesaling. The group employs some 3,500 people in total.
Weihua has three MDF lines currently running and another two well on the way, as well as laminating facilities and some furniture production.
The company’s first panel mill was an MDF line which produced its first board in 1997 in Meizhou City, Guangdong province. The factory is equipped with machinery from Shanghai Wood Based Panel Machinery Co Ltd (SWPM) and has an annual capacity of around 70,000m3. The press is a nine-daylight unit with a platen size of 4ft x 16ft.
Line two was built in Guangzhou city in 2001 and was another multi-opening press line from SWPM. This press was bigger than the first, having 15 daylights but still the same 4ft x 16ft platen size. It has the capacity to produce 120,000m3 of MDF.
With its third line,Weihua took a different approach and went for an imported line for the first time.With the exception of raw material preparation, the contract was awarded to Dieffenbacher as a turnkey project. The continuous CPS press is 28.5m long and has a maximum width of 9ft, giving the line a capacity of 200,000m3. Chipping and refining is by Andritz.
Located in Qingyuan, a city famous for its connections with the building and construction and the ceramics industries, it is the latest line to come on stream for the company, producing its first board in June 2004. Construction of the factory had begun in February 2003. It produces MDF and HDF for the southern China market, for furniture, flooring and decoration.
Line four is currently under construction in Taishan City in the west of Guangdong province. This will again employ a Dieffenbacher CPS continuous press, but will have a smaller capacity of 120,000m3, reflecting the lower availability of wood supply in that area. It is planned to produce the first board from this line in early 2006.
The fifth line will be in Yanchung City, near Maoming, again in Guangdong, with foundations planned for October this year and first board in April 2006. Maoming is also home to one of Dare Global’s four MDF lines. 
For this line,Weihua is reverting to discontinuous pressing technology and has awarded the contract to SWPM for a 12- daylight press with a capacity of 150,000m3. Refining will be by Andritz.
Mr Xie Yue Wei, vice general manager for all the company’s MDF lines and a man with considerable experience in the industry, cited two reasons for this.
Firstly he perceives a market for thicker board – particularly 20mm – in the Guangdong furniture industry and feels that a multi-opening press is better suited to this than a continuous press would be.
Secondly, he felt it was time to support the Chinese manufacturers after such a long run of success for the European ones.
Returning to the latest situation, our visit this time was to the Qingyuan factory, which is impressive, located on a site covering 630mu (42ha), together with a furniture factory which has a Chinese-made shortcycle press capable of turning out a million m2 of laminated board, for its own use and for sale to the general market. The furniture line can produce half a million pieces of panel-based cabinet furniture per year.
Another area of the site is set aside for the construction of a painting line for MDF which is due to be built in the future.
“Our intention is to have the biggest market in Guangdong because we have the  confidence and because we have the [raw] materials and the technology and we have built good relationships with our customers,” said Mr Xie, who added that there is a market for 20 million panels a year in that province.
“Our company is an important one for the government of Guangdong province to help, because we have brought industry and employment here.”
The wood supply for the new Qingyuan plant and for all the company’s other factories, comes from its own plantations and, currently, from local farmers, although Mr Xie said that in future maybe it would all come from Weihua’s own plantations.
“Each factory has its own forestry company. If you want to build an MDF line, you must first plant the trees and this company already began planting trees 14 years ago in Guangdong province.We have a total of 1.2 million mu (80,000ha) of plantations.”
Unusually, the Qingyuan factory uses some bamboo in its raw material for MDF/HDF and finds it to be a suitable component of the furnish.
The impressive office building has an enormous marble-floored open atrium set with chairs and tables for customers to sit in comfort. The offices are arranged on three floors around this atrium, with balconies running around three sides.
Behind the offices is the company ‘hotel’ in several blocks offering accommodation for customers and suppliers who wish to stay overnight. Beyond this is accommodation for some of the staff, of which 310 are employed in the production of MDF.
Weilibang is the brand name for all the company’s products, including Weilibang Fancy Veneer.
The bamboo and eucalyptus are chipped by Andritz machinery and there is a 54in Andritz refiner.
The Vyncke energy plant is fired by bark, dust and waste from production, supplemented with rice husk from this strong ricegrowing province.
Gluing and the whole forming and press line were supplied by Dieffenbacher. Thickness measurement and blister detection is by GreCon and panel handling is by Kontra. The factory has its own resin manufacturing plant on site. Finishing of the panels is done by a Steinemann six-head sander and Anthon sawing system.

If the name Robina sounds familiar to readers, it is probably because we reported on the Robin Resources MDF and laminate flooring operations in Mentakab, Malaysia.
Founder Robin Loh is a dynamic entrepreneur with interests in shipbuilding, hotels, the construction of a city in Australia, and the electricity supply industry, as well as the panel business. He also studied for and gained a Phd in political science at the age of 66.
Dr Loh entered the panel business in 1995, when the Mentakab factory produced its first board; that factory has gone on to produce its own-brand Robina Flooring, together with other value-added products.
The joint venture company in China, Robina Ltd, was set up in mid-July 2001 between Robin Loh and Yichun Forestry Management Co Ltd, in which Robina holds 70% and Yichun Forestry 30%.
The factory, at Yichun in Jiangxi province, was in fact originally constructed by Yichun Forestry Management Co Ltd, a corporation of the People’s Republic of China and therefore state-owned. Construction began in 1998, with production of MDF commencing in 2000.
That first line was supplied by Siempelkamp and employed a 12-daylight 4ft x 16ft multi-opening press. It had a design capacity of 54,000m3 a year, based on 8mm HDF board for sale to the laminate flooring market.
These days, the line is producing thicker panels for the furniture market and thus the capacity is greater, with 94,000m3 being produced in 2004, of which 18,000m3 was in the form of HDF for flooring and the balance MDF for furniture.
Since the beginning, the factory has been under the management of Mr Xia Jing Di, who is today the director general manager of the Robina Yichun operation.
“The purpose of the joint venture was to build a second line and utilise line one and local resources to the full,” said Ms Doris Chou, foreign representative and financial controller of Robina.
Yichun Forestry originally entered into a joint venture with panel producer Homanit of Germany and Mr Xia and Homanit managers visited a number of panel making factories worldwide to look at various continuous press lines. That joint venture ended after about a year and Robina ‘took over’ as the new partner.
The availability of wood supply was the prime reason for the original factory being built in Yichun, with pine plantations planted by farmers in a 200km radius supplying a good quality raw material for fibreboard production. In fact, explained Ms Chou, Jiangxi is the number two province for forestry in China, behind Fujian.
“We started our own plantation in 2000 and have doubled the area every year,” said Ms Chou. “We have planted 120,000mu [8,000ha] so far and we hope that in five to eight years, we will be selfsufficient in wood raw material.”
The company is planting pine and poplar and testing other fast-growing species which will grow at its plantations, 300m above sea level where snow is common.
The supplier chosen for the second line at Yichun was Metso Panelboard and the contract was signed in August 2003, with the down-payment being made that October. Construction work began in April 2004.
“I felt that Metso was the only potential supplier able to offer the complete line from log to packing, including the refiner, energy plant and panel handling as one company – I saw that as the strength of the company,” said Mr Xia, speaking through Ms Chou as interpreter. “We were also looking for a line with the highest performance, and the most cost-effective solution.
“At first, I had my doubts about the [former] Küsters press’s reputation but I changed my opinion after visiting a lot of Küsters lines overseas which were producing well. The press has also had a lot of modification under Metso and I felt the most important of these was the cooling zone. I think it is very important to the quality of the final boards.”
Robina’s is in fact the first of the Metso re-designed Contipresses in China, said Mr Xia. The second one will be for Fujian Furen for particleboard. He added that that company was one of the earliest entrants to MDF in China, with a Washington Iron Works multi-daylight press, followed by a Küsters press, also for MDF and now the order for the particleboard line.
Start-up of the line was originally planned for April this year, but abnormally bad weather conditions, with torrential rain and snow since December 2004, delayed progress. At the time of WBPI’s visit in April, the site was still suffering from a thick layer of sticky mud making outdoor construction work more difficult, and it was hoped that the first board would be produced the following month, but it was more likely to be in June.
The new line has a designed capacity of 200,000m3 a year from its 33.8m x 8ft 6in Contipress. The width is in fact adjustable from 6ft 6in to 8ft 6in.
Production is intended to be mainly thin board from 2mm upwards, although the line is designed for thicknesses up to 40mm. Line one will then be reserved for 12mm and thicker.
The Yichun factory has had its own resin plant on site since the first line was built and it has now built a brand new formaldehyde plant to serve both lines one and two. The plant supplier is a Chinese company based in Wuxi, near Shanghai, which also supplied the Kronosinhua Beijing factory and Kronoshuangfeng in Danyang in Jiangsu province.
The log yard and chip yard are both fully concreted and a new debarking and chipping line will serve both lines one and two, with a Pallmann drum chipper.
The refiner for line one was supplied by Andritz Sprout Bauer and is a 44in unit.
CMC Texpan forming is followed by an Elmed metal detector, and a mat damping unit after the pre-press. A travelling crosscut saw cuts the mat to length for the multi-opening press.
The control room has windows to the front for the production line and windows to the rear looking onto the refiner room.
After the star cooler, board edges are trimmed by a hogger, with the trimmings going for fuel. Stacks of boards are then transported by forklift to the warehouse.
After conditioning, sanding is carried out using an Imeas six-head sander.
Line two is in a new building across the road from line one on land purchased specifically for this purpose – and the construction of a new doorskin line in due course. The total area of the Yichun site is 600mu (40ha).
For line two, all major equipment was supplied by Metso Panelboard, including the drum debarker, supplied in six rings which were then welded together on site, with ultrasonic testing of the welds. The debarker unusually incorporates a bark shredder to prepare the waste bark for use as fuel.
The energy plant will be used to burn bark, dust and light oil as well as disposing of some of the waste water from the production line.
There are then two 140m conveyors, one for bark and a covered one for chips, to take the latter to two chip silos. One silo is for hardwood chips and one for softwood. Chips are then conveyed to the chip screen, washer and digester/refiner. That Metso (formerly Sunds) refiner is 60in in diameter.
The Metso dryer is a two-stage system and is followed by a buffer fibre storage bin and then a Metso Z-sifter. Fibre then passes to the cyclone above the former and on to a dosing bin designed to ensure an even flow of fibre to the former.
The former incorporates a weigh-scale and there is a weight-per-unit-area gauge after the pre-press, as well as two matspraying units.
After the continuous press there is a GreCon thickness and blister detection system. The factory also boasts 15 GreCon fire detection systems, plus a separate system for the press.
After the continuous press and the two cooling stars (with space for a third, if required, to meet future capacity demands), the Lukki storage system takes over. This fully computerised, robot-based system moves panels to the storage area and takes them to be cut to size on the Metso line, with a small packing line also available, and to the Steinemann Satos eight-head sanding line.
Although Robina has sizeable offices at the first line, a new purpose-built office block is to be erected on the new site.
Also planned for the Yichun complex is a door factory to make interior doors using flat (rather than moulded) MDF doorskins. Space for this project was allowed for when the extension to the site for MDF line two was purchased. The timing for this project will be set once the new MDF line is up and running satisfactorily.
There is a railway line adjacent to the factory site and this was used to bring some of the heavy equipment into the site during construction. This is a new facility and it is intended to make use of it for general transport of raw material and finished goods in the near future.
The new factory also has an undercover loading bay for road trucks.
The market for Robina’s fibreboard production, which will total at least 300,000m3 at Yichun, is mainly furniture factories in Guangdong, Shanghai, Beijing and Dalian, which mostly export a large percentage of their production and thus require a high-quality board.
“We don’t anticipate exporting outside China – there is no need to,” said Ms Chou. “Right now, we can’t supply enough board – hence the new line.We are supplying on a cash-only basis too and we are famous in China for this,” she said proudly. “We haven’t needed a sales office up to now, although we did open our first office in Guangzhou in 2003 and offices in Beijing and Shanghai in 2004 to increase our sales effort in preparation for the new MDF line.
“Good quality board is still rare in China so we don’t see the demand slowing down. There have been many new lines in the last two years and they have all been large capacity but China is still not producing good quality in sufficient quantity and many of those mills are still on a learning curve.
“The big difference in price in the China market is between good quality and the other boards. There are also more regulations, and they are better enforced with more inspection on the market, concerning formaldehyde release, so quality products are in increasing demand.”
Robina is making E1 and E2 grade and is working with officials on an E0 standard for the country. All the urea formaldehyde glue made at Yichun incorporates formaldehyde catchers.
“We are making moisture resistant [MR] board to Japanese standard but we are not in the market with it yet. China has no requirement for MR flooring but our base board for laminate flooring is more moisture resistant than any other producer in China,” said Ms Chou.
“We do supply all the laminate flooring manufacturers but the profit is low on flooring – it is better on furniture panels in recent years.We maintain our price for flooring panels but laminate flooring producers are down to around US$4 per m2 for export,” she said in April. “There is too much competition in the market.”
As for the future, Ms Chou and Mr Xia believe that the lack of a wood resource, and of skilled personnel, will ultimately squeeze the poorer-quality producers out of the market.

Another of Chile’s big wood pulp corporations has joined the South American wood based panels club with the recent decision of Empresas CMPC SA to launch its first pine plywood mill.
The Santiago-based pulp and paper group’s subsidiary, CMPC Maderas SA, plans to install a 225,000m3/year line beside the group’s Pacifico pulp mill next year to turn out high-quality sanded panels for the US and European markets.
CMPC, one of Chile’s top forestry and pulp groups, alongside Celulosa Arauco y Constitución SA, is following the lead of Arauco which launched its first plywood line in 1997. Today, Arauco also makes particleboard, MDF and hardboard.
For CMPC, which also manufactures tissues, carton board and writing paper, the move into plywood is a natural one as it wants to make fullest use of its forest resource, which in Chile last year amounted to more than 400,000ha of mainly radiate pine and eucalypt plantations.
“Everything is related to the forest base we have. The timing of this project is tied to the availability of pruned logs in forest areas with radiata pine trees aged from 25 to 28 years old,” explained CMPC Maderas’ vice president, Hernan Fournies. Plywood is an obvious added-value product for a company with an abundance of large, high quality ‘radiata’ pine logs, he added.
The group is no novice in the world of wood products for the construction sector. CMPC Maderas already operates three Chilean sawmills at Mulchén, Bucalemu and Nacimiento producing close to one million m3/year of sawn pine timber. In addition, it runs a remanufacturing plant in Los Angeles (Chile) with a 110,000m3/year output of mouldings, solid panels and finger joints.
In the case of its wood products, about 90% of sales – which for 2004 totalled around US$225m – are in the form of exports. Last year, timber went largely to Asia, the Middle East and US, while CMPC sold its remanufactured component production mainly to the US and Japan.
“Our customers are associated with construction, mainly in the US, with some in Europe, so it makes sense for us to offer plywood as a complement to our lumber products,” said Mr Fournies, who met WBPI in Santiago recently.
CMPC is already discussing its likely equipment needs with machinery suppliers, including Raute who provided plywood lines for Arauco. The group expected to be ready to choose the supplier at the end of June and to begin work on the mill plan by the end of the year. Start-up is likely by September 2006, according to Mr Fournies.
The group has earmarked a Greenfield site of around 45ha south of the Pacifico pulp mill to create a major forest products complex. The US$56m plywood plan is just the first phase of what may become a bigger scheme, likely also to accommodate a sawmill and perhaps a new mill work operation, the Maderas executive explained.
The choice of the Pacifico site was prompted, not only because of readily available wood resources to feed the plant but also to take advantage of power, steam and water supply from the pulp unit.
Plywood raw material will be drawn from an average distance of between 50 and 60km from plantation forest mainly in the Los Angeles and Temuco areas of Chile’s Eighth and Ninth Regions.
A major part of plywood production will be concentrated on ‘A’ grade panels “for markets where the appearance is really appreciated”, including the US DIY market, the furniture industry and for some applications in construction like decorative panelling, said Mr. Fournies. “Basically, our target is to reach a premium product with a very good appearance. That’s what we are finding is in demand,” he added.
CMPC readily accepts that the plywood business in general has been under attack and has sustained damage from the advance of OSB and other panels. But the group remains confident that, with its high quality raw material, good technology and capacity focused on the sanded plywood niche business, it can succeed despite this threat.
The Chilean company means to concentrate primarily on serving the large US market, but sees good opportunities for export sales too, in Mexico and Europe. Last year, CMPC estimates, US consumption of sanded plywood reached 5.2 million m3 out of a total national plywood market totalling 20 million m3/year.
CMPC can take advantage of distribution channels it has developed, chiefly in the US but also in Europe, for its solid wood products. The group, which ships to US ports including Houston, Charleston and Baltimore, has warehouses in Texas and on the East Coast.
The group claims a good environmental pedigree with certified forests and products, and believes its work in polishing its corporate image, particularly in eco-sensitive markets, will also aid its success in the plywood business.
So, with plywood under its belt, is CMPC set to follow Arauco’s dramatic, full scale incursion into the business of wood based panels? In barely seven years, through major capital investment and key acquisitions in Chile, Brazil and Argentina, Arauco has become a regional industry leader.
The answer is, apparently, not. CMPC may later expand plywood production, possibly in another country in South America’s ‘Cono Sur’ or Southern Cone. But it still sees its core role as that of a pulp and paper maker, according to Mr Fournies.
“Technically, any other [panel] opportunity, like MDF or OSB, we would compete for the raw material that we are now using for pulp. The company is committed to its pulp business,” stressed the vice president, who has served 18 years with CMPC’s wood products division.
In fact, the plywood project is far from being the only current investment scheme on the minds of CMPC senior management. As if to emphasise its firm commitment to pulping, the group is to launch its huge 780,000 ton/year ‘Santa Fé II’ pulp line, costing some US$700m, by September 2006.
CMPC Maderas has other expansion projects including the US$28m expansion next year of sawn wood capacity by 500,000m3/year at its Mulchen sawmill, rebuilt after fire destroyed the main mill and machinery in 2003. A US$10m project will see capacity growth for mouldings and edge-glued panels at the Los Angeles remanufacturing plant by early 2006.
In addition, CMPC, which is extending its plantations in both Chile and Argentina, expects to develop new solid wood products from its Chilean mature eucalypt forest. Overall, at the start of 2004, its planted ‘globulus’ and ‘nitens’ eucalypt resource in both countries amounted to 120,000ha.
At the end of 2004, Empresas CMPC SA, one of the largest firms quoted on the Chilean Stock Exchange, reported annual group sales of around US$1.6bn. The group is controlled by the Matte family, one of the country’s top business leaders.

At a time when Brazilian particleboard makers have been reluctant to boost production capacity in an uncertain market, leading panel producer Satipel Industrial SA has quietly continued expanding.
Successfully raising the output of its 1,000m3/day Siempelkamp ContiRoll line in Uberaba by 30% through de-bottlenecking in 2003, Satipel is preparing now to extend the main press to take annual capacity from 430,000m3/year to nearly 700,000m3.
Meanwhile, the company is reinforcing its presence in Brazil’s all-important southern marketplace where, in Taquari, Rio Grande do Sul state, it runs a 35-year-old 200,000m3/year batch press line.
In a battle to compete with Brazil’s more modern continuous press lines, Satipel is spending around US$2m to boost panel quality and lower manufacturing costs. Just as wood prices are soaring, it has modified the line to accept sawmill residues, and is upgrading dry fibre screening and panel sanding to improve product finish.
Beyond this, Satipel is also making a preliminary study of “the logical next step” for Taquari – the introduction of continuous press technology. The firm is considering a low-cost, two-phase option which would eventually lift capacity to 350,000m3/year, revealed operations vice president Mauro Pini França.
With board demand set to rise further in the south, such a move may be feasible in less than three years’ time, he said. “We are following carefully forecasts and trends in the market, and when it seems a good time to go further on the process, we will do it,” Mr França said guardedly.
Back in Uberaba, when Satipel launched its first continuous line in 2000, underpinned by a big wood resource of more than 40,000ha of planted pine forest, a press extension to 1,500m3/day was already planned. But much of the line, apart from woodyard units, needs upgrading to accommodate the extra output.
Following strong growth in the particleboard market last year, with sales rising 14%, Satipel plans to extend the ContiRoll press from 25.5m to 38.7m in 2006. The plant has six weeks downtime programmed for next January and February, traditionally the quietest period of the market year.
Major modifications needed to support the extra capacity include installation of a second dryer; the upgrade of the energy plant to feed the dryer with hot gas and some strengthening of the fibre preparation area. That means the addition of a fifth ring flaker, a fourth screen, and a fourth mill to refine material for the board’s surface layer.
In the line’s resin preparation area, the company needs to make changes too. It is due to switch the core layer blender to the surface layer position and replace it with a new, larger blender for the core layer.
Downstream also, Satipel has to make changes, adding another pair of sanding heads to its six-head sanding line to increase the speed and process the extra board volume, according to the vice president, interviewed at Satipel’s Uberaba facility in May.
Investment appears relatively modest for the line expansion at a likely US$15m. “Considering the extra capacity you get – roughly 200,000m3/year – it is not a high investment overall,” he observed, admitting the initial line investment was obviously a bit higher but “is now paying off”.
Satipel originally launched its continuous particleboard line in 2000 as part of a major expansion project in western Minas Gerais state. Previously, the firm produced  particleboard in Uberaba on two old batch lines, one a single-opening press unit and the other a five-daylight press line, with a combined 160,000m3/year capacity.
In readiness for the ContiRoll press extension, as well as to help build up its market share, Satipel has brought its old 300m3/day multi-opening press back into service. The Siempelkamp-built press was mothballed three years ago as the continuous line got started, but was reconditioned and began running again this April.
With its electrical and electronic systems earlier modernised, the old line is set to move centre-stage once again as it takes the strain through the downtime period. The plant also plans to build up panel inventory to sustain its customers at that time.
In 2003, Satipel led the field among Brazil’s particleboard producers with a 23% share of national production capacity.With no major new capacity projects planned for particleboard since then, it has maintained its leadership. No new capacity is likely in the next two years, said Mr França.
The firm is predicting new market growth during 2005 of between 10%-12% for its panel in Brazil. It believes it is well placed to feed further particleboard demand, if necessary, by still running its old machine alongside the expanded ContiRoll line.
One project by panel newcomer Fibraplac SA of Porto Alegre to build a 330,000m3/ year particleboard line alongside its MDF plant in southern Brazil was recently dropped in favour of a second line for MDF.
But, producing particleboard in Brazil has not all been plain sailing. Panel makers are having to come to terms with a down side to the new boom in Brazil’s furniture industry. In recent years, economic growth in Brazil has tempted many more people from the country’s poorer ‘C’ class to enter the furniture market for the first time.
While their arrival has certainly stimulated new growth in the sector, it has also fuelled a drive by furniture manufacturers to make even cheaper products to fit limited consumer budgets. This, in turn has hit the laminated panel market with furniture makers opting to run board printing/painting lines themselves instead of buying melamine or finish foil faced board. Panel makers’ margins have been slashed as sales of their value added products have plummeted.
“It’s not only our concern, but also that of our competitors because probably more than 50% of Brazil’s furniture companies today use raw boards to paint themselves,” said Mr França. Satipel is running at barely 70% of capacity in both melamine and finish foil laminated board, he admitted. Melamine board sales in Brazil overall were  down by almost 13% in 2004.
But he forecast the practice among furniture firms will eventually backfire. Difficulties in colour matching components and frustration over poor productivity when pieces have to be returned for repainting should bring them back into the laminate fold, predicted the vice president. Meanwhile, “we have to dance according to the music” and deliver just raw board, he added.
Satipel’s decision to invest US$220m in the north central state of Minas Gerais came primarily from the huge wood potential of more than 50,000ha of concentrated forest land it bought in 1998 near Uberaba.
At a time of escalating wood prices, Satipel’s Uberaba mill is in the enviable position of complete self sufficiency in raw material. From this, the firm estimates it saves up to 30% on its production costs today, according to Mr França. Two-thirds of the one million m3 of solid wood it harvests annually goes to the plant, with the rest sold either to sawmills, energy use or chipping.
With an eye on costs, the panel maker is rapidly switching from tropical pine to highyield eucalyptus plantation. In the larger of two properties it is harvesting mature trees from a 38,500ha pine forest and has already planted 8,000ha of eucalyptus there.
From 2007, the proportion of eucalypt used in the Uberaba board will begin to rise and, by 2011 or 2012, it expects to be 100% eucalypt based, predicted Mr França. In the constant fight to be the lowest-cost panel producer, an estimated jump in wood yield of around 40% must be worth achieving.

Despite economic uncertainties in Brazil, a row with its local business partner and a lack of its own forest reserves in the country, Sonae Group’s long term commitment to its  Tafisa Brasil panel subsidiary is said to be “not in doubt”.
For some time, rumours have been rife within the Brazilian panel industry and beyond that Sonae, in spite of sinking US$270m into the firm, was ready to sell Tafisa Brasil.
At one point late last year, the firm was quoted in a leading Brazilian newspaper as stating that there was no ‘For Sale’ sign on the Curitiba-based MDF, particleboard and flooring producer.
Now, Tafisa Brasil’s chairman and chief executive José Baeta Tomás has firmly scotched the rumours. “Sonae’s position in Brazil is not in doubt with any of its businesses,” he emphasised.
Sonae’s panel joint venture with Canadian group Brascan Corp is finally delivering good returns as it consolidates its position in a crowded panel market, he insisted.
“We are in a good phase in terms of increasing our profitability and that has been done within not such easy market conditions, because there is over capacity [in Brazil],” Mr Tomás told WBPI’s Richard Higgs in an exclusive May interview at the Tafisa Brasil panel complex in Piên, Paraná state.
The emphasis on improved margins is in line with the strategy of the firm’s ultimate Portuguese parent group, Sonae SGPS SA, which demanded a financial payback  following years of heavy capital investment, particularly in its industrial operations worldwide.
Brazil, where it also owns significant retail property development interests, is the country which has received Sonae’s greatest investments outside Europe, said the executive. Back in 2002, parent group president Belmiro de Azevedo stressed Sonae was calling a halt to a string of major project investments still planned at Tafisa Brasil. It was time to cut costs, improve profitability and focus on selling added value products, he told WBPI on a visit to Brazil that year.
Among ambitious spending schemes to bite the dust at Piên since then were plans for a 50 million m2/year panel painting and lacquering line; a new mouldings plant and a 150,000m3/year sawmill, capable of supplying more than 40% of the panel plant’s raw material needs.
“We decided as a group, not only the industrial side, to consolidate our investments in this country in order to define later on, a new wave of growth, if that is feasible in terms of the economy,” said Mr Tomás, a Portuguese who took charge of Tafisa Brasil a year and a half ago.
Since 2002, the Brazilian panels operation has seen a significant shake-up in both its senior management and workforce. Management changes saw the departure of industrial project manager Jose João Lobo and chief executive Edson Ungarelli, the arrival of a new operating team and a reduction in labour of some 200, the firm said.
There is still much to do in terms of consolidating Sonae’s Brazilian manufacturing investment and this phase of development is likely to continue for Tafisa Brasil for up to three more years, according to Mr Tomás.
The company’s 56ha site features a 252,000m3/year Siempelkamp ContiRoll  particleboard line; two ContiRoll MDF lines, with combined capacity of 384,000m3/year; three overlay press lines for melamine and finish foil; a six million m2/year robotequipped laminate flooring unit; a highspeed, low-cost sanding centre and comprehensive automated Giben cutting centre.
There is no doubt that back in 1997 when Sonae Tafisa first launched its Brazilian wood panel operation, it had its eyes fixed firmly on the country’s huge potential market. However, what is now clear is that Tafisa Brasil’s joint shareholders have found the going in Brazil, with its economic ups and downs and Third World lack of infrastructure, a lot tougher than expected.
“Both shareholders hoped that the return [from the project] would have been quicker than it has been,” admitted Mr Tomás. He blamed difficult economic conditions in Brazil over the last few years for poorer results than Sonae group, in particular, had expected.
The Tafisa Brasil project, with Sonae Tafisa now holding a 63% stake and Brascan 37%, originally saw the Tafisa panel complex being fed primarily by pine plantations, in Paraná and Santa Catarina states, owned by Brascan Brasil SA.
As the complex’s panel capacity expanded – today, it consumes almost 3,000 tons of wood per day – it has relied more and more on buying sufficient raw material on the open market. Today, only around 10% of its needs come from Brascan’s forests, according to Mr Tomás.
It is public knowledge that relations between the companies’ shareholders have not been good. There has been disagreement over a number of issues, including the supply and pricing of wood and how management of the Tafisa Brasil mill operation should be shared, admitted Mr Tomás, although he was reluctant to go into details of the dispute.
“The difficulties between the partners were never completely connected with the wood supply....because the wood reserves Brascan had were and are not enough to supply us.
“I think the discussions are in terms of how the share of management of the [joint] company should be, even though that is regulated by the shareholder agreement, and that led to difficulties,” he suggested. He admitted that the running dispute created “not a very good image in terms of the reliability of the company”.
Mr Tomás conceded that comment about Tafisa Brasil has centred on two issues – its lack of forest plantations and the shareholder problems. But, the chairman stressed, the row “did not prevent us from operating in the market. I never experienced difficulties with clients for that reason...in the end, [selling] is down to your quality and price,” he declared.
In any event, he added, partner relations are “beginning to improve, and I hope that will happen”. He expressed confidence a solution to the problem would be found “in time”.
In an environment where cost cutting has become an imperative, Tafisa Brasil is only too well aware of its weakness in the forestry area.
In common with the rest of Brazil’s wood panels industry, Tafisa Brasil is facing the effects of a national wood shortage. This stems from a period of five to eight years in the 1970s and early 80s when government forestry incentives ceased and thus little tree plantation took place nationally. Planting recovered, without big state incentives, when wood industry growth boosted demand again, confirmed Tafisa.
Since then, however, for those who rely on wood as their base raw material, prices have generally soared in the market. This has come as a blow to Brazil’s panel makers, struggling to lower production costs in their own highly competitive marketplace. Producers like Tafisa Brasil, without forest reserves, are particularly vulnerable in the open market and are having to optimise still further their use of raw material.
Already, the Piên mill has increased substantially the level of waste fibre it uses in its  particleboard up to as much as 60% – more than other producers, it claims. It has intensified its search for better quality waste material and improved sources of supply, according to Piên industrial director Mário Gavinho.
In addition, Tafisa Brasil has increased the amount of eucalyptus wood fibre it adds to its panels with a maximum today of between 10%-15% of the total fibre mix, explained Mr Gavinho, former project manager at the Placas do Paraná MDF scheme, who started at Piên in 2003.
But, he warned, even more optimization will be required with the prospect that wood prices will go still higher as big wood suppliers trade heavily on the current scarcity.
Earlier this year the panel maker was able to stock up its 85,000 ton woodyard to benefit from a short-term rise in lower priced material. This was available as small wood processors, hit by the dollar/real exchange rates, bought in less.
When WBPI visited Piên in May, two giant columns of trucks, bulging with pine logs, lined the highway outside the complex in both directions, waiting to drop their loads. This was prior to a public holiday, according to the firm.
The company, after expanding its limited portfolio of added value products in the market, is putting great emphasis on trying to boost sales of these lines, including laminate flooring. “We have a very small share, even nowadays, in that area [added value], so we think we can improve it,” said Mr Tomás. Last year, the firm turned out 4.4 million m2 of melamine-faced board and 1.7 million m2 of finish foil covered panels, it said.
In the panel business, Tafisa Brasil has seen its share of the market reduced more recently. This is a result of major newcapacity projects, especially MDF, coming on-stream within the last two years, said the chairman.
“We are maintaining our volumes, but basically, in terms of share, ours is lower than it was at the beginning obviously, because there were less players then,”Mr Tomás told WBPI. In 2003, figures issued by the Brazilian wood panel producers organization ABIPA showed that Tafisa Brasil contributed just 8% of the country’s particleboard capacity, but around 28% in MDF.
The Brazilian panel market generally is currently growing at an average rate of 12% to 15%, although recent years have witnessed clear differences in trend between MDF and particleboard.
In 2003 MDF consumption grew faster while particleboard remained almost static, whereas last year the trend reversed, with particleboard sales up strongly and MDF down, said Mr Tomás.
Tafisa Brasil’s chairman put the sudden 2004 upswing of particleboard down to the gradual entry of poorer Brazilians into the panel furniture market. Because of their low income, only the less expensive particleboard goods were within their range.
Looking ahead, he suggested that, with the national economy unlikely to repeat last year’s high rate of growth, the panel market is set to remain stable over the next few years. “I don’t expect spectacular growth,” he said. The consolidation phase at Tafisa Brasil has been characterised by a programme of improvement in operating the existing plant facilities. “We need to continue to work here with what we already have,” stressed Mr Gavinho.
In its quest for greater productivity, the Piên plant is continuing to carry out a degree of fine tuning on its processes and equipment. This involves a number of lowcost projects to raise efficiency and increase the value of Tafisa Brasil products.
“We are working on [improving] a lot on things like press time and availability of the lines,” explained the industrial director.
One urgent project is the addition of a secondhand 75 tonne/hour wood chipper, being brought from a Tafisa plant in Spain. With its existing 100 tonne/hour unit needing major maintenance, daily stoppages have been costly.
These have forced the firm to buy in 300-400 tonnes of chips per day, the equivalent of up to 15% of its daily needs, according to plant engineering coordinator André Luis Silva. “The chipper is not working properly and we are not getting 100 tonnes of chips per hour. It has to stop three to four hours per day for maintenance,” he explained.
Another area where operational problems have had to be addressed, he said, is in the particleboard line chip preparation. Again maintenance downtime was high and the plant has just completed a project to change the layout, parts of the piping and electrical systems to resolve the difficulties.
In addition, with exports rising, the plant plans to install a fourth panel packing line just for those shipments destined for foreign customers. Making use of existing equipment on site, the firm wants to pack export products more securely to deal with cases of damage sustained in transit.
In terms of line productivity, Tafisa Brasil managers have set themselves an overall target of reaching output of 55,000m3/month on all three panel lines by the end of 2005. In May, production was running at between 46,000-47,000m3/ month, confirmed Mr Silva.
Beyond Brazil, things are also looking up for the group’s industrial division, Sonae Industria, which over the past two years has seen “a big turnaround”. It had taken time to digest its major European acquisition of Glunz, which is now helping make the division “a large contributor” to improved group results, Jose Tomás pointed out.
With a fresh plant team and management already tackling some formidable challenges, and Sonae’s backing assured, it remains to be seen if Tafisa Brasil can deliver the goods in the tough Brazilian panel market.

For many reasons, among them economic, cultural, and climatic, Brazil is an extremely unlikely market in which to find laminate flooring catching on.
Indeed, even the manufacturers of such flooring admit they face an uphill struggle in trying to get more than a fraction of the population in this vast South American nation to abandon traditional floor surfaces for their product.
Today, the Brazilian laminate flooring industry association, ABIPLAR, acknowledges that an overwhelming 90% of all flooring consists of ceramic tiles. Laminate flooring accounts for just 1.7% of the market with solid wood, carpeting and vinyl making up the rest.
It is rather surprising, therefore, to find some of Brazil’s largest and most experienced wood based panel manufacturers heavily committed to the production of laminate flooring. Not only that, but their number has grown with the addition of at least one optimistic convert to the sector.
With annual production remaining almost static at around six million m2/year over the last three years, it is clear that major panel players such as Duratex SA, Eucatex SA and Tafisa Brasil SA are in this business for the long haul.
They were joined by sector newcomer Fibraplac Chapas de MDF Ltda of Porto Alegre which launched its first panel plant in 2003 with a 180,000m3/year MDF line. Late last year, it started up a 1.5 million m2/year Homag laminate flooring line, although this is not yet operating commercially.
Flooring manufacture in Brazil goes back to 1998 when the two São Paulo-based panel makers, Duratex and Eucatex, launched their respective lines a few months apart. “At the beginning, we had very fast growth which continued from 1999 through to 2002. But in the last three years, the market has stayed at almost exactly the same level,” reported current ABIPLAR president and Eucatex’s civil construction division commercial director, Claudio Ferreira de Oliveira.
There is little doubt that the laminate flooring players have been somewhat disappointed with the pace of progress in the domestic market, following their heavy investments. “Six or seven years ago we thought laminate flooring could grow a lot but things are not as easy as we thought at that time,” admitted Mr de Oliveira.
So, what are laminate flooring’s advocates up against in Brazil? While the national economy is improving the lot of poorer Brazilians, this product is aimed at the top end of the flooring market. Those normally able to afford such a sophisticated product are, by contrast, currently facing serious economic difficulties, explained Mr de Oliveira, interviewed by WBPI in São Paulo in May.
In price terms, traditional flooring has a huge advantage with a good tile product costing around 20 reais (US$8) per m2, installation included, whereas laminate flooring sells for more like 50 reais per m2 including installation, according to the ABIPLAR president.
Costs are high for the manufacturer, even after he has made the huge initial investment to set up his particleboard or MDF substrate line. The flooring standard in Brazil is very similar to that in Europe and the producer has to pay international prices for raw materials like overlay and papers, Mr de Oliveira pointed out.
On top of that, the manufacturers have to invest huge sums promoting what is still a relatively new product in the country. “To develop the market, you have to invest a lot in marketing, so our marketing costs are much higher than in Europe.
“It’s a matter of culture and convenience in Brazil and you have to invest a lot to change this culture. It is one big obstacle to introducing laminate flooring,” the ABIPLAR president explained.
That culture is rooted in logic. As the climate in most of Brazil is hot and often humid, people prefer the cool of a tiled floor, particularly in the office environment, and in humid coastal and interior regions.
Despite producers’ recognition that they have a mountain to climb in getting over their message, they remain quietly confident of an eventual breakthrough. “Now the market is staying at the same level, but I think it will grow, not in a short period but in the long term. It is a good area to be in still,” declared Mr de Oliveira.
Unlike Europe, Brazil does not have the benefit of a developed DIY market through which the wood flooring can be channelled. In a country where labour is cheap, customers rely on installers to fit their floors.
To counter early problems experienced in the quality of installation ABIPLAR, along with the producer companies, is backing a continuing training programme for would be installers. To date, the association has trained more than 2,200 laminate floo ring installers all over Brazil, said the president.
Flooring manufacturers have been investing in a range of new products and different designs for the domestic market. In its quest to reinforce its presence at the high end of the market, Duratex last year planned to introduce new products, including an embossed-in-register pattern.
Early in 2004, Tafisa Brasil of Curitiba caused somewhat of a stir in the industry when it launched a ‘click-in’ glueless laminate flooring product, apparently contrary to an understanding with other producers.
This type of flooring, used widely in North America, was felt to be less suitable in Brazil because the glued version offers more resistance to moisture. “People use a lot of water to clean floors in Brazil (normally tiled), so they think in general that this is suitable for cleaning laminate flooring,” admitted Mr de Oliveira. The glue fills joints giving greater moisture protection.
Tafisa Brasil’s unilateral move sparked retaliation from Duratex which launched its own high-end ‘click-in’ flooring product at Brazil’s civil construction fair in April last year. Even so, it is understood this has not yet been available generally in the market.
In general the Brazilian laminate flooring industry has been following the trends in Europe in both technology and pattern design. The natural wood look, popular in Europe, “goes down very well in Brazil as well,” said Mr de Oliveira.
In recent years, there has been some growth of laminate flooring exports from Brazil, mainly in South America. Producers are looking at new opportunities in Chile, and in Argentina which has experienced an economic upturn more recently. Some companies are also seeing possible sales in the US but the high cost of using Brazilian ports and the issues of shipping have inhibited progress, said the ABIPLAR president.
Today, the Brazilian wood flooring industry exports in the region of 250,000m2 of its products annually.
There has been little change in domestic market share among ABIPLAR member companies, with Duratex still maintaining the lead with 44% followed by Eucatex with 32% and Tafisa Brasil at 24%. Three years ago, Duratex had around 50% of the market but Eucatex has taken some share from the other two producers more recently, according to ABIPLAR.
Flooring producers are looking again at the marketing efforts they have employed to penetrate this difficult market. As a panel maker, a producer has been used to selling to the industrial customer such as the furniture manufacturer. “Unlike panels, flooring is a retail business ... so the marketing effort we are all introducing, at least in our company, is not well focused.
“We are learning now to interact with our clients in the market to develop and sell a [flooring] product to the final consumer,” admitted Tafisa Brasil chairman and chief executive José Baeta Tomás. His company aims to introduce more value added products generally and recognises laminate flooring is important to profitability.
In southern Brazil, where the climate is more temperate, Fibraplac is still developing its MDF-based flooring products, some of which are being utilised by sister companies in the parent Isdra group. It develops shopping centres and runs hotels in Brazil.
Having considered moving into particleboard, the company is now preparing to launch a second MDF line at its site in Glorinha, Rio Grande do Sul state. Progress in flooring has been hampered by a lack of sufficient substrate available, according to Fibraplac’s plant manager, Mariano Dantur do Canto.
In the quest for greater flooring market penetration some producers, including Fibraplac, are looking at developing lowercost painted panel floors. As a newcomer to the panel industry, Fibraplac does not feel bound by the traditional products and practices of the sector at large.

In a year overshadowed by controversy surrounding an ambitious pulp mill plan in Valdivia, Chilean forest products giant Celulosa Arauco y Constitución has, in contrast, enjoyed growing success in the wood panels arena.
The Santiago-based group has reinforced its already formidable presence in South America’s wood panel business with the launch late last year of its third sanded ‘radiata’ pine plywood line in Chile.
Barely four months later, Arauco also established a vital base in Brazil. It staged a lightning US$300m cross-border coup to acquire the wood panel manufacturing, forest and resin production interests of French conglomerate Louis Dreyfus SA in Brazil and Argentina.
At a stroke, not only is Arauco acquiring respected Brazilian panel pioneer Placas do Paraná SA of Curitiba, but also its Argentine sister particleboard maker, Faplac SA, along with 34,000ha of planted pine, eucalyptus and poplar forest in Argentina and Brazil.
The Dreyfus deal is significant, not least because of Brazil’s huge population and great sales potential for panel producers. It also broadens Arauco’s already substantial product portfolio, taking it for the first time into resins, particleboard and laminate flooring.
Up to now, Arauco has been serving its Brazilian panel customers from across the border in northern Argentina where it launched the 250,000m3/year Alto Paraná MDF mill three years ago. Now, with a Brazilian plant, earlier plans for a second MDF line on this site have been shelved.
The acquisition follows Arauco’s strategy of developing new panel plants within key national domestic markets. Because of the price of wood panels, transport costs become significant when it comes to margins, especially in a country as big as Brazil, it says.
There is another point, too. Arauco, along with other MDF and particleboard makers who serve Brazil from plants in Argentina, was on the sharp end of a dispute with Brazilian producers over allegations of dumping.
Among Brazilian accusations was that Arauco was destabilising their domestic market by selling MDF from Alto Paraná at heavily discounted prices. The group never responded publicly to the claims.
Now, the dumping storm, which last year seemed set to escalate into a trade dispute between the governments of Brazil and Argentina, has abated following talks between the two sides.
Even so, there is little doubt the row helped justify the Chilean group’s move into Brazil. “That [Brazilian criticism] did have some bearing on this acquisition,” admitted Arauco group commercial director Charles Kimber.
“The [Dreyfus] deal gives us a foot in that market [Brazil] as a local producer, otherwise, we would always be seen as a foreign exporter there, he said.
The ‘gem’ of the deal for Arauco is undoubtedly Placas do Paraná’s 260,000m3/ year Metso (Valmet) MDF continuous press line, started up at Jaguaríaiva, Paraná state late in 2001, said Mr Kimber, interviewed by WBPI in Santiago at the end of May (2005).
Initially, Arauco reduced the direct workforce at Placas by about 160, with some of these retained on a contracting basis, but the group is still reviewing its purchases overall.
It does recognise the need to improve board quality and volumes at Placas’ particleboard plant in the state’s capital, Curitiba. This runs four small single-daylight Dieffenbacher press lines with a design capacity of 320,000m3/year, as well as a Wemhöner melamine overlay line and a Barberán finish foil laminating line.
“There are some important issues [there] we should deal with to increase our productivity and quality... In the next couple of months we will be making some small investments in different parts of the [particleboard] lines to increase volumes.
“But we don’t expect to do that by more than 10%,” explained Paneles Arauco’s sales and marketing director, Carlos Bianchi. The task for 2005 is to target the particleboard lines’ nominal capacity, he said.
Arauco is adamant that it does not plan to throw its weight about as soon as it arrives in Brazil. “We are not just going to go and build another MDF or particleboard mill in Brazil.We first have to learn how [best] to operate those mills [we acquired] ... and understand what the market can sustain,” said Mr Kimber.
Placas do Paraná did have a grand plan for panel production at its northern Paraná site of Jaguaríaiva. As the MDF plant took shape, it was preparing to build a second continuous line there for particleboard. This 520,000m3/year unit was due to replace the small, less efficient Curitiba batch lines, but the project was later shelved.
Arauco has not ruled out the option of replacing the old Curitiba capacity with a large, modern continuous press line in due course. But it is not intending to make a snap investment decision to expand in particleboard immediately, stressed Mr Kimber.
The executive was quick to recognise the “spectacular” growth of the MDF business in Brazil over the past nine years – from zero to today’s figure of around 1.5 million m3/year. Domestic market demand is set to run “for years to come” as the country develops, and Brazil will not export MDF much, the Arauco executive suggested.
The Chilean group has other priorities now it has landed in Brazil. It has inherited 26,000ha plantation pine woods in northern Paraná state and plans to extend its holding with new purchases of forest land.
“We have got to look at expanding our forest base and probably (later) get into other sectors of the wood business – sawmilling or plywood – and eventually into the pulp business,” declared Mr Kimber, whose group owns five pulp mills, four in Chile and one in Argentina, with a total annual capacity of more then two million tonnes.
Arauco is continuing the strategy of putting plants close to its forest, which it first followed in Chile. “Then, as we have consolidated the industry base, we look at how to expand markets domestically. That is where the particleboard complements our MDF supply,” explained Mr Kimber.
In addition, the new deal gives Arauco a 50% stake in Dynea Brasil SA, formerly Dreyfus’ 130,000ton/year resin manufacturing joint venture in Brazil with Dynea group.
However, Arauco still sees itself as a forestry company, skilled at managing its plantations to get the greatest yield and utilizing efficiently every part of the tree it grows. It is developing low cost integrated industrial complexes to optimise returns from the manufacture of value-added forest products.
The group has built up its forest resources in Argentina where, early last year, it finally acquired 60,000ha, 24,000ha of which were planted with pine, and a sawmill from the Argentine industrial group, Perez Companc. Today, Arauco has 111,000ha of forest in the country and an additional 20,000ha of pine plantations in Uruguay. In Chile, it has nearly 700,000ha.
Arauco has benefited from the economic recovery in both Argentina and Brazil and counts these countries, along with Chile, as its main markets for MDF and now  particleboard products. In the case of its Argentine acquisitions, it is still awaiting the green light from the anti-trust regulators in Buenos Aires. The official go-ahead is  anticipated by September, said Arauco.
Apart from Faplac’s particleboard mill in Zarate, the Chilean group is set to gain the Resinfor Metanol SA formaldehyde and urea formaldehyde resins plant in Santa Fé province. In addition, Arauco will win a 60% stake in Flooring SA, Dreyfus’ two million m2/year laminate floor manufacturing joint venture with the European panels group, Fantoni SpA of Udine, Italy, which is also based in Zarate.
Faplac made history back in 1960 as the company which first introduced wood panel manufacture to South America. Six years later, its Brazilian sister, Placas, launched the first particleboard plant in Brazil. Today, Faplac runs the 270,000m3/year continuous Metso (Küsters) press panel line, but ambitious Dreyfus plans to install a 350,000m3/year MDF line alongside the existing Zarate line were abandoned in the face of Argentina’s economic crisis.
Arauco’s latest acquisition means it is reassessing how best to integrate its new capacity for adding value to its panels. That means looking at melamine overlay facilities it has in Brazil and Argentina and how best to serve the national and export markets.
The Brazilian units will be directed to serving the big domestic market, while the Argentine capacity could perhaps serve foreign markets like Chile, South Africa, the US and Mexico.
Arauco’s meteoric rise in the panel business has been marked primarily by its success in supplying its top quality ‘AraucoPly’ sanded pine plywood, especially to the US market. Starting in 1997 with its first Raute line at Horcones in Chile, the group added a second there in 2000 and these together have a combined 360,000m3/year capacity.
Its third plywood mill, with a larger 210,000m3/year line capacity, was launched last November as part of phase I of a huge forest industry complex, which includes a log merchandiser, a 400,000m3/year sawmill, a big power plant and the plywood mill. Phase II will comprise a giant 856,000 ton/ year bleached pulp mill due for completion in the second quarter of 2006.
Arauco says the integrated Nueva Aldea Forest Industrial complex, located on a vast 200ha mountain top site near Itata, Chile is a major “resource driven initiative”.
“The Itata complex is an improved version of what we did at Horcones,” explained Mr Kimber. “As our forest is maturing in the northern part of our estate, north of the Bio Bio River, we see it is good for us to have a sawmill, plywood mill, log merchandiser and pulp mill, as well as our MDF plant close by at Trupan, so we are making integral use of our forest.”
The highly automated plywood line – supplied jointly by Raute and a combined venture between US companies Globe Machine Manufacturing Co of Tacoma, Washington and Portland, Oregon-based Spar Tek Industries Inc – is housed in a 40,000m2 building at one end of the site.
The mill produces its clean radiata pine plywood in 8ft x 4ft panels, much of it destined for markets – including furniture, decorative siding or floor structures in construction or special packaging – in up to 35 countries, notably the US. Other markets include Chile and European countries.
Raute provided the line up to the plywood lay-up section while the Globe-Spar Tek team supplied Paneles Arauco with the presses onwards. The log merchandiser allocates the base sections of 17m long logs to the plant. These are heat treated before passing to its state-of-the-art lathes, one 8ft, the other a 4ft unit.
Coordination between the lathes and clippers is much improved on the Itata line enabling faster processing, and stacking is straighter, said Franco Bozzalla, managing director of Paneles Arauco. The plant has three hot air driers followed by two composers and two automatic lay-up lines.
Plywood panels pass on to the two presses supplied by the Globe-Spar Tek partnership and product finishing is handled on this production line by sanding units provided by Imeas. Arauco’s other plywood lines employed sanders from Steinemann.
As much as 95% of the panels manufactured by Arauco is ‘A’ and ‘B’ facing plywood. “We do basically the same things here as at Horcones. The difference is that the [site] layout is much better here at Itata because it was conceived as a big, complete complex from the start,” said Mr Bozzalla.
At the end of May, when WBPI visited the Nueva Aldea site, the plywood unit was still in the start-up phase with the line running at 10,000m3/month or 500m3/day. The target was 700m3/day.
While Phase I plants at Itata have been unaffected by the environmental controversy resulting from the distant 685,000ton/ year Valdivia pulp mill project, the Itata pulp mill construction was halted in January 2005 for one month.
As for the Valdivia project, this major mill started up in February 2004. But, since October last year, it has been the target of local criticism after reports claimed its  pollutants in the waters of the Cruces River killed algae eaten by black necked swans in a wetlands nature reserve. The mill is located 30km upstream from the reserve.
This led to strong denials from Arauco, the resignation of its long-serving president and chief executive Alejandro Pérez, a lengthy wrangle with the Chilean environmental authorities over regulations and Arauco’s voluntary temporary shutdown of the Valdivia plant from this June.
The experience has made an impression on the giant group and is likely to influence its policy over the Itata mill. “We have learnt a lesson here, that we have to work closer with the local community and present these things in a timely and adequate fashion,” admitted Mr Kimber.
Even so, there’s no denying the group’s international success in both pulp production and with other forest products, notably, wood based panels.