For a company vastly experienced in lumber processing and furniture manufacture, Green River Panels (Thailand) Co Ltd was taking a big new step in setting up a state-of-the-art particleboard line from scratch.

Green River Wood and Lumber Group is the parent company and has furniture making operations in China, Vietnam and Malaysia (see p38 in this issue) and sawmills in Thailand and Malaysia.
Sawmills are of course excellent providers of raw material for particleboard mills and that is why Green River decided to build its first panel plant adjacent to its sawmill at Bangklum near Hat Yai in southern Thailand.

The Metro-Ply group of companies is one of the oldest players in the field of panel production in Thailand.

It started out as a teak sawmill, going into plywood production in 1973, followed by entry into veneer production, wet process hardboard, doors and finger-jointed hardwood.

Indeed, the company is still active in all those areas but it was in 1995 – a time of considerable activity in SE Asia for composite panel production lines – that the company entered the MDF business.

Green River Panels (Thailand) Co Ltd, part of the Green River Wood and Lumber Group, is a new venture for its long-established parent company, which has always specialised in furniture production for the mid- to high-end market.   The group has furniture production facilities in Malaysia, Vietnam and China and also has some sawmilling operations in Malaysia and Thailand.   One of these sawmills, built on a Greenfield site in 2001, is located in Bangklum, near Hat Yai in the south of Thailand, and is one of five mills owned by the company within a 60km radius of Bangklum.   I know what you are thinking: Five sawmills, lots of residues, ideal for a particleboard line. That is exactly what Green River thought, too, placing a contract in May 2006 with Dieffenbacher for all equipment from the forming line to the star cooler, including a CPS continuous press.   As we learnt from last year's article (WBPI issue 1, 2007, p32), groundworks began in October 2006.   I returned to Green River in early December 2007 to find the last frantic preparations - necessary in every mill as it nears completion - for start-up at the end of that month. I subsequently heard that the first board was produced on December 19 and that the company planned commercial production before the end of February 2008.   "The buildings were roofed by mid-2007 and the first machinery arrived in early March, with installation of the main components of the line in May," said Hubert Hsieh, the man with responsibility for the particleboard project.   First to be installed was the Büttner drum dryer, followed by the 29MW energy plant from a Chinese supplier. Next came the continuous press from Dieffenbacher, which is destined to produce around 150,000m³ of panels per year.   "Maybe we will add a boiler at a later date - perhaps next year - to generate electricity and provide steam for the lumber drying kilns of our sawmill next door," said Mr Hsieh.   The press installation was completed in August last year and was due to complete testing in mid-December, together with the thermal oil heating system.   The sanding line was due on stream in January and comprises an Imeas six-head machine with the option of a further four heads - two each for calibration and finishing.   The trimming and splitting saw was supplied by a Chinese manufacturer but an angular saw system is under consideration for the end of this year.   "If all goes according to plan, we could increase this mill's capacity to 200,000m³ and an area of the site is set aside for this possible expansion," said Mr Hsieh.   The wood supply for the mill will come from two sources: slabs, offcuts and other residues from the company's own sawmills; and in the form of rubberwood from plantations in the area. The sawmills also process rubberwood, producing lumber for furniture manufacture.   "We also have a finger-jointing factory three kilometres from here and will utilise wood from there too. Thus the group will be utilising the whole tree with nothing wasted," pointed out Mr Hsieh. "As a group we concentrate on rubberwood solutions in Thailand."   The company plans to supply some of its particleboard production to its own group furniture factories in Malaysia, Vietnam and China. For the rest, it will look to export panels, notably to Taiwan where the majority of the group's management comes from and where the group is headquartered.   Exports will go through Penang Port in Malaysia for container shipment, as the factory is close to the Malaysian border, and also through Songkhla port, 50km away in Thailand.   Rail transport will be used to ship the containers to Penang from the border station of Padan Besah.   "This particleboard mill is a pilot project for the whole group, which has previously concentrated only on furniture," said Mr Hsieh. "If it is successful, maybe we will build other mills in other countries."   Unfortunately for Green River and the other particleboard producers in this part of Thailand (including Panel Plus and SPB), the market has been dire for most of 2007, lamented Mr Hsieh. "The market in South East Asia is the worst - worse than China which achieves prices about US$50 per m³ higher than here. Europe also achieves about US$30 more than we can.   "That is a challenge for a new factory like ours, exacerbated by the increased supply of particleboard in Thailand in recent years. Costs also continue to rise and the gap between particleboard and MDF prices has about tripled in the last three years," he said, echoing the comments of all producers in the region.   Reduced supply of plywood from Indonesia due to logging restrictions has benefited MDF, but not particleboard.   The Green River Panels particleboard project has been a steep learning curve for a company building its first-ever panel production line. Although expert in furniture manufacture and sawmilling, there was no inhouse expertise in panel production of any kind.   The company did, however, retain the services of a German engineer with considerable experience in building particleboard mills - Herbert Hermann Karl Fahlbusch - as the project manager.   Hubert Hsieh has overall responsibility for bringing the project in on time and on budget and, by the look of things in early December, he had a good chance of doing just that.  

We have charted the story of a massive panel production complex in Hat Yai, southern Thailand, for about the last 11 years - most of which have been turbulent. However, as we reported in WBPI issues 1, 2005 and 1, 2007, recent years have seen a revival of a large part of the site under two new owners. Just to recap briefly, that original complex was conceived by STA in the mid-1990s but soon ran into severe financial difficulties. In February 2004, MP Particleboard of Thailand and Evergreen Group of Malaysia jointly purchased a large part of the assets from the receivers of STA Group. The two Siempelkamp ContiRoll continuous particleboard lines were taken on by MP, since renamed Panel Plus, while the two similarly equipped MDF lines were taken on by Evergreen Group under the new name of Siam Fibreboard. All four lines were in need of extensive refurbishment and upgrading after years of either little, or no, usage and are now running very successfully. The ceo of Evergreen Group, JC Kuo, having invested a lot of time and money in raising his two MDF lines to world-class performance, then set about planning the future for Siam Fibreboard. One of the first things he did was to order a third continuous MDF line to be constructed on 30 acres of additional land adjacent to his existing factory. The land was again purchased from the STA receivers. At the time of my visit in early December 2007, ground works were well under way and Mr Kuo was busy sourcing steel frame elements from wherever they could be had in a very tight world steel market. The new production line was on order, with Dieffenbacher being chosen for the supply of the 8ftx28m continuous press line. The contracts were signed with the supplier in April 2007 and the machinery is due on site in May 2008. "This will be the longest press we will have in the Group and will thus be versatile," said Mr Kuo. "We will be able to produce thicknesses from less than 2.5mm to 30mm because of the versatility of this press." Contracts were also signed in May 2007 with Andritz for the refiner and GTS for the energy plant. Mr Kuo admitted that the delivery times for the machinery had gone against him since his original planned start-up time, due to the general boom in the machinery market since that time. His intention is to start up the new line in the fourth quarter of 2008 and I have not known Mr Kuo's many projects to run late up to now. Anticipated capacity is around 750m3/day or 270,000m3/year. "Maybe more," said Mr Kuo intriguingly. Siam has also bought a short-cycle press secondhand from a Panel Plus facility in Bangkok. Mr Kuo intended to have that Wemhöner line in operation by about June this year. The investment in major machinery for the third line is in the order of RM120m (US$37m) and has been funded entirely by the existing two MDF lines at Hat Yai. The new office building, under construction at the time of my visit last year, was in full use and features an ingeniously-designed water garden in an unroofed space between the new office building and the factory itself. However, this new development, impressive as it is, is dwarfed by Siam's latest construction - the buildings to house a new electricity generating plant. It was the need for this facility which led Mr Kuo to put back his planned start-up date for the third MDF line from end-2006, thus unfortunately incurring the further delays already mentioned. The massive generating plant was undergoing tests last December in preparation for full start-up in early 2008. With the original purchase of the two MDF lines came one electricity substation from the original STA set-up. This has been shared with Panel Plus since the two companies entered their joint venture, but Siam's third MDF line would have taken demand right up to 100% capacity on that one substation - obviously not a viable situation. "So we decided to build our own generating plant," said Mr Kuo. "We purchased it from a Chinese specialist manufacturer of such equipment almost as a turnkey contract, except for the buildings and their foundations." The Siam site is adjacent to a river and the area has suffered from flooding in the past so the land is not ideal for heavy construction. For this reason, Siam had to sink over 700 piles up to 8-12m deep to ensure a safe basis for the plant. The land level also had to be raised before construction could begin as there is a significant fall towards the river. The main generator building housing the three turbines is almost 30m high. Electricity generation will be carried out by a biomass steam turbine using wood waste but also designed to take up to 50% coal as fuel. "We intend to use mainly wood as it is cheaper but we could import coal from Indonesia," said Mr Kuo. "The capacity of the plant is sufficient for the two existing MDF lines, plus some spare capacity. However, we plan to expand the capacity in about a year's time to supply the third line as well - this extra capacity has already been designed into the plant." Siam has a team of experienced specialists from China to cover the development of the plant and has employed the services of Mr Lee Kwok Choy, formerly of Guthrie MDF of Malaysia, to oversee the project. Cooling water for the electricity plant is taken from the river where Siam has constructed a pump room on the river's edge. This was considerably complicated by the fact that it had to be specially designed to cope with a 10m seasonal rise and fall in the river level. That water is then filtered in a special filtration plant and treated by reverse osmosis to supply the boilers and the cooling towers. These boilers will also supply steam to the MDF refiners and the flue gas from the generation plant will not go to waste either. The plant will produce 20 tonnes of clinker per day and options for utilising that in a profitable way on site were under consideration at the time of my visit. These included making building bricks but that had yet to be tested. Another major, though invisible, change at Hat Yai is the fact that Evergreen bought out Panel Plus' shares in Siam Fibreboard Co Ltd in September 2007, thus ending the joint venture arrangement under which the two MDF and two particleboard lines were bought from the STA receivers. Meanwhile, the Evergreen group has not been idle back where it started, in Malaysia. A new resin plant at the Batu Pahat MDF factory will supply all resin types for panel making and lamination to group MDF lines in Batu Pahat and Johor Bahru, as well as to the Allgreen particleboard plant in Segamat. The resin plant has an annual capacity of 60,000 tonnes of formaldehyde and 8,000 tonnes per month of resins. It was designed by Cal Polymers and built by specialist sub-contractors, while Cal provided drawings, key components and an overseeing role for the construction. The plant is due in full production by May 2008 and represents an investment of around US$6.5-7.0m. Mr JC Kuo is something of a visionary in the SE Asia panel business and always seems to have further plans for expansion of panel capacity on top of his operations in Indonesia (see p27), Malaysia and Thailand, or for increasing the efficiency of his operations by projects such as the electricity plant. It is this kind of entrepreneurial activity that got him listed in a group of the top 200 companies in the Asia Pacific region in Forbes Asia magazine in 2007; he fully intends to be at the award ceremony in 2008 as well.

The long history of the former STA wood processing complex in Hat Yai has been well-documented in this magazine over the past 10 years or more.   Last year we introduced readers to the new building erected for Panel Plus' planned new decor paper impregnation line (WBPI issue 1, 2007, p24) and in late 2007, we returned to see the building finished and the new sate-of-the-art Vits line in full production.   The impressive glass-fronted building required over 600 piles to be sunk to support its 96x42m steel-framed structure, which has space - and the foundations - for a second impregnation line at a later date, should the company wish to make that investment.   The construction took about six months including the piling, which sounds quite quick.   "Panel Plus has five short-cycle press lines in total - two in each particleboard factory here [the company has two separate factories on the massive Hat Yai site] and one in Bangkok," said Ms Amporn Kanjanakumnerd, managing director of Panel Plus when I visited the factory last December.   "We have the biggest laminating capacity in South East Asia I think and having our own impregnating line will help us with quality control."   The company has over 200 colours/patterns of decor paper in stock and in production for its clients.   The first sheet of laminated paper left the new production line on January 15th, 2007 and commercial production commenced in March.   Capacity of the line is 25 million m² a year and the company was still ramping up to that level in December.   Vits of Germany installed the impregnation line in the purpose-built factory and also supervised the start-up of the line, with technical assistance from a consultant from Europe.   Panel Plus also hired a German specialist who is an expert in impregnation technology to assist in ramping up production and in quality control matters.   "We really put our hearts into this project in order to achieve the 'Panel Plus spirit'," said Ms Amporn. "We promise to add value in everything we do."   In December, the line was running at 32m/minute, but the designed capacity - and the target for Panel Plus - is 40m/minute, depending of course on the type of paper being treated.   The line is 60.5m long and can impregnate 4ft- or 6ft-wide paper, with the maximum line width being 1.9m.   There are eight drying chambers arranged in two banks - one of three and the other of five units.   The decor paper is all supplied by European makers and printers such as Technocell, Schattdecor, Interprint and Munksjö, while resin for impregnation comes from the Dynea factory on the Hat Yai site, or from Dynea's factories in Malaysia and Singapore.   The whole impregnation line building has an air conditioned, controlled atmosphere, with separate air conditioning for the raw paper store. The whole building is maintained with positive air pressure to prevent the humid tropical outside air from entering when the doors are opened.   "It is necessary for us to have our own impregnation lines to cope with the high capacity demand of our own short-cycle lines. This is how we integrated our value chain to bring great benefit to the customer," said Ms Amporn. "With this facility, we are able to offer a wider design range, higher flexibility and better quality products and services."   The new impregnation line building also has office accommodation for the production and administration staff - and a fully-equipped laboratory, where all incoming materials are tested and the resin formulations are decided.   Other changes at Hat Yai   The new impregnation line is not the only new thing to see at Panel Plus' site here as it continues to improve and upgrade its facilities.   In the past year, the company has added mat spraying before the press, as well as blow detectors after the press, to both Siempelkamp ContiRoll particleboard production lines. The supplier for all this equipment was Imal of Italy.   In another move to increase efficiency, Panel Plus has changed the ABS oil and dust burners to Körting equipment to burn 100% dust.   Another project under way at the time of our visit in 2006 was the restoration of the Vyncke energy plant.   This is now complete and the plant is completely under cover. The wood chip infeed has been modified and all the electronic controls upgraded.   Meanwhile the capacity of this plant has been raised from 3.5Gcal to 6.0Gcal to enable the line 2 particleboard press to be run at full capacity.   In another move not directly associated with production, the company has completed the construction of 11 management accommodation units in a landscaped area of the site and these now offer family homes to some of the managerial staff.   It is good to see the old STA site, reduced to a near-standstill by that company's financial woes, coming alive again with both the original particleboard lines running full-tilt again, everything upgraded and now the new impregnation line in operation in its grand new building. The future once more looks bright for the Hat Yai complex.  

Vanachai's 350-acre industrial site outside the southern city of Suratthani saw its first panel production line in 1997. This took the form of a Siempelkamp ContiRoll continuous press line with a capacity of around 300,000m³/year of particleboard. It was of course clear that a site on such a grand scale was not going to stop at one particleboard factory and in 2004 a second ContiRoll press line - and the third continuous line for the group, which also has production sites in Chonburi and Chachoengsao - started production with a particleboard capacity of 450,000m³/year (WBPI issue 1, 2005, p29). Other particleboard lines for the group in the past include its first-ever line, built in Chachoengsao in 1981 and known as Plywood Laminated Company Ltd. This was followed by a second line on the same site in 1983, known as Durospan. Both lines had Siempelkamp single-opening presses, each with annual capacity of around 48,000m³, but both have since been sold. In 1991, Vanachai built its first continuous particleboard line, with a Siempelkamp ContiRoll press, at Chonburi. This has a daily capacity of some 500m³. Thus Vanachai has a total annual capacity of around 900,000m³ of particleboard. Again at Chonburi, the company has its first MDF line, built in 1989, second MDF line (doorskin multi-opening line), built in 1990, and third MDF line, built in 1993, with a total capacity of 270,000m³/year. The continuous lines employ two Küsters (now Metso) continuous presses. Coming back to all that space at the Suratthani site, Vanachai has built its second MDF line there. It is another continuous line, supplied by Metso Panelboard, with a capacity of 700m³/day and it produced its first board in September 2006. So we have a total company annual capacity of around 900,000m³ of particleboard and 480,000m³ of MDF. Work started on the construction of the new factory buildings for that fourth MDF line, and storage buildings to serve all three panel lines at Suratthani, in August 2005. The land here is soft and wet - it was formerly rice fields - and so extensive piling, to depths of 12 to 25m, was required before construction could commence. The machinery arrived from Sweden, Finland, Germany, Italy and Switzerland in February 2006, by which time the warehouse buildings were ready to receive the large number of huge crates. Installation of the line was carried out rapidly, no doubt assisted by the knowledge and experience gained by Vanachai over the years as well as the experience of the installation engineers from the various supplying companies, and the first board was produced on September 8, 2006. All components from the woodyard to the finishing area, including sanding, were within the Metso scope of supply. The energy plant was sourced directly by Vanachai from Vyncke of Belgium and the angular panel saw from Holzma, Germany. The Metso press, with its chain-link belt transport system measures 8ft wide x 29m effective heating length, with the cooling zone occupying around 30% of the length. The planning and foundations for the press allow for a later extension to 34m effective length if Vanachai's management so decides. On past record, it seems likely they will, assuming they do not decide to build another line alongside the existing building instead; there would be room. However, when questioned on this, Mr Phumsakdi, manager of the planning and developing department, said that the company currently has no plans for further MDF or particleboard lines or extensions. Raw material is rubberwood of course, as it is in plentiful supply here in southern Thailand. Vanachai pioneered the use of rubberwood with its first particleboard line and later became the first in Thailand to produce both particleboard and MDF from that resource. The logs are debarked in a machine supplied by Metso and chipping is by Bruks Klöckner. The chips are conveyed on a belt conveyor to the wet chip silo and from there to an oscillating Bruks Klöckner screen. The cleaned chips are belt-conveyed to the digester and refiner. The Metso refiner is a 62in unit which offers spare capacity if that press extension should go ahead at some point in the future. Waste process water is injected into the Vyncke energy plant. The Metso former and the continuous press itself are protected from fire by Firefly equipment. A Cassell metal detector precedes an Imal mat spray and density profiler. A Hema core heater is available for use in thicker boards of 16mm or above. A triple star cooler receives the master panels from the press, while handling from there is taken over by a fully automated/robotised Lukki handling system. The Steinemann sander is equipped with belts from Sia Abrasives of Switzerland. The record for production on the new line came two days prior to our visit when this 700m³ a day rated line achieved 730m³. The electrical power for the site comes from the national grid and there is one sub-station serving the whole Vanachai site. There is also an emergency diesel-powered generator available for when the grid power goes down from time to time. Such a back-up system is deemed necessary by most Thai panel producers due to the fact that the grid is not totally reliable. Loading of trucks is now carried out in the extensive new warehouse area and trucks bring in tanks of resin from the company's resin factory in Rayong, 900km away in the north of the country, and take back loads of MDF and/or particleboard panels. Everybody in the south east Asian panel market is finding things difficult at present and Vanachai is no exception. "The particleboard market is currently over-supplied and we do not see this situation improving in the near future," said Mr Phumsakdi. "The MDF market is also still over-supplied in this region." Vanachai's export market for its particleboard and MDF products extends to Korea, Taiwan, China, Malaysia, Indonesia and Vietnam. This normally accounts for around 60-70% of production and the panels are exported through Bangkok port. The company has a laminated flooring line at its Chonburi MDF factory and anticipated bringing that product to market early this year, Mr Phumsakdi told WBPI in December. Such a massive site as the one at Suratthani, which even has a dual carriageway concrete road bisecting it with the factories on either side, has to be largely self-contained and Vanachai provides accommodation for workers with families on site in condominiums, or chalet-style accommodation for senior staff and their families. The site currently employs around 1,000 staff, with about 50% of them living there. Such a massive site is also a potential security headache, especially in the troubled south of Thailand where terrorist activity is all too commonplace. Security checks on incoming vehicles are very thorough but the site also has a long boundary to protect. This is done quite effectively by a very ancient form of defence; the site is surrounded on all sides by a deep water channel like a castle moat, making unauthorised access difficult. Vanachai has always been one of the top panel producers in the region and this latest line secures that position. The company clearly has room to expand still further on the Suratthani site and, when the market is right, it seems likely that we will be returning there for another story of expansion.

Not only has SPB Panel Industries Co Ltd started up its first particleboard line, in Suratthani in southern Thailand, but this is also the company's first venture into the panel business.   The parent company, SPO Agro-Industries Co Ltd, is focused entirely on coconut and palm oil extraction and first decided to go into particleboard production as a diversification in 2001 (WBPI issue 1, 2006, p33).   Thus Seang-Siri Particleboard was formed, Ligna 2003 was visited, and a contract was signed with Dieffenbacher for the complete line in July 2004.   As we reported last year, the rainy season, which was far wetter than this year, slowed progress on the outside areas of construction, with glutinous mud making groundworks more challenging.   However, the first board was produced from SPB's brand new line on July 15, 2006. Three shifts have been operating since September 20.   This was not quite as early as Sontaya Sirianuntaphat and his brother Kraiwut had hoped, as they had planned to finish construction work in February 2006, but some local contractors caused delays to the electrical work, which was not completed until May last year.   Further delays were experienced when the company had problems with its emergency power supply in the form of a secondhand diesel generator.   In fact, matters electrical have been a consistent problem dogging this project.   One of the first 'components' of the whole factory to be installed was a 115KV electricity sub-station from Siemens. A faulty part proved to be a problem to replace in the short term and a temporary part had to be fitted, resulting in delays in getting the certificate for the sub-station signed off by the authorities.   Chipping is another area which the company is still trying to streamline, as the line is currently not producing the volume of chips in a 12-14 hour shift which was expected. This means running the chipping line at night, which had not been factored into the original staffing levels.   "This seems to be an infeed system problem which we need to solve, as it is not consistent," said Mr Sirianuntaphat.   The sanding line was providing another bottleneck at the time of my visit, and although it was running three shifts, was not coping with 300m³ a day he said. This again is an infeed/outfeed conveying problem and all part of the learning curve for this new entrant into the business. Sanding belts are supplied by Sia Abrasives of Switzerland.   "It may also be due to a lack of experience in our operators to some degree at this stage," admitted Mr Sirianuntaphat.   At the time of our visit on the last day of November, the factory was averaging about 300m³/day of production and he confidently expected to achieve his target of 500m³/day "soon" and to resolve the outstanding issues of chipping and sanding as part of this of course.   The wood supply for the particleboard mill is rubberwood, a plentiful resource in this part of Thailand.   Like all the other Thai mills relying on this resource, SPB had difficulties with supply in September/October 2006 due to the very high price which the wood was fetching on the market. However, by November Mr Sirianuntaphat said the price had come down and the unusually dry rainy season had helped with the supply situation.   As a new entrant to the particleboard market, SPB has not arrived at a very opportune time as prices for the panels are under pressure, with recently added and imminent new capacity making the outlook a little uncertain.   However, Mr Sirianuntaphat felt that the extensive flooding in the north of Thailand in 2006 should lead to an increase in demand on the home market as furniture is replaced, while the company is also exporting successfully to Malaysia, Korea, Indonesia and Vietnam.   The master panel from SPB's press is 8x16ft or 8x18ft and the standard density is 660-670kg/m³.   "At present we are only producing E2 grade board because that is what our customers want," he said "but we will be producing E1 and I believe that is our future when we are up to full capacity."   It is a challenge for any company to start up a complete new panel production line, but SPB's challenges have been more daunting than most. As a completely new entrant to the wood based panel business, Mr Sirianuntaphat and his team have had to learn fast and to learn 'on the job', with the ongoing help and support of the machinery suppliers.   It has not been all plain sailing, with weather problems and electricity problems throwing obstacles in his path. But one gets the impression that this man is one who likes a challenge and that he is confident of meeting his production targets.   In fact he probably has reached them by the time you read this article.  

When Green River Panels (Thailand) Co Ltd produces its first particleboard panel in Songkhla province in the third quarter of this year, it will also be producing the first panel product the Green River Wood and Lumber group has ever made. Established over 18 years ago, this Taiwanese company is headquartered in Port Klang in Malaysia. It specialises in the production of furniture in the mid-to higher-price range, with its main manufacturing bases in Malaysia, Vietnam and China. It also has some sawmilling facilities in Malaysia and Thailand but these are not core to its business. "We did not feel that we could produce furniture economically here in Thailand, but we decided instead to invest in making panels to produce semi-finished products and utilise the wood resource here," said Hubert Hsieh, who is responsible for the particleboard mill project. That resource is rubberwood and in spite of recent difficulties with the rising price and falling availability of this wood, Mr Hsieh sees a good supply being available into the future. "The higher latex price has led to less wood supply as rotation periods are extended, but in the long-term, plantation areas are increasing and this province has increased its plantation area by 3% in the last two years so I believe wood supply will be good," he said. Green River bought the green-field site at Bangklum near Hat Yai in 2001 and built a new sawmill from scratch. The mill produces around 10,000m³ a month of rubberwood products, which Mr Hsieh said is a reasonable size mill for Thailand. The logs come from a 60km radius. At present, the residues from that sawmill go to the local latex factories to be used as fuel for heating the dryers, in place of fuel oil. There are also another five sawmills within that radius, owned and run by the group. "We made the final decision to build a particleboard mill at the end of 2005 after visiting the Ligna exhibition in Germany in May 2005 and then conducting a careful study of the feasibility," said Mr Hsieh. The company went for particleboard rather than MDF because the raw material produced by the sawmill would be more suited to particleboard and the company would be able to utilise the logs more completely. "In 2005 we prepared the finance and obtained quotations from Siempelkamp, Dieffenbacher and Metso Panelboard, making the decision to go with Dieffenbacher in February 2006. The contract was signed in May of that year for the line from forming to the star cooler. The target capacity of the mill is 500m³/day, or about 150,000m³/year, and while all suppliers for the main components of the line had been decided at the time of our visit in early December 2006, the handling system to be employed after the press was still under consideration. An angular saw system will also be selected at a later date but space has been allocated in the factory plans, as it has for a short-cycle press line to be bought at some time in the future. The chipper contract has been placed with a Chinese supplier, while flaking is to be supplied by Maier of Germany, screening is to utilise Pal Superscreens and the dryer will be supplied by Büttner. Gluing will be by Imal. The target market is the group's own furniture factories, as well as other furniture makers in China and Vietnam, with the majority of production being exported. In spite of the considerable particleboard capacity coming to the market from Thailand and Malaysia recently, Mr Hsieh is confident that his factory will find markets for its production. "We will be a smaller-capacity mill and so more flexible than some of the competition who have much larger capacities and so less flexibility," he said. "We will produce to customer demand for niche markets as well as supplying our own factories. "The design of the press we have chosen will give us a lot of flexibility in sizes for different markets. We are not going to try and compete with the big-capacity lines." The intention is to produce E2 and E1 grades - mainly E1 - and to go for E0 once the line is established, thus giving the potential to export panels to Japan. It is envisaged that E2 will only be produced during ramp-up of the production. The factory site totals 250,000m², of which 200,000m² is allocated to the particleboard factory buildings. Groundwork on the site commenced in October 2006 - just a few weeks before our visit - and the assembly of the main building, using pre-fabricated frames from China, was due to commence in December and to be completed by early February this year. The dryer was already on its way and expected before the year-end, while the Dieffenbacher machinery was expected to arrive at the site by end-February. The green end and energy plant were expected to be delivered in January, with the latter coming from a Chinese supplier called Union Boiler. The energy plant will serve both the sawmill and the particleboard line. Commenting on the choice of location for the operation, Mr Hsieh pointed to the general lack of investment in the area. "There is not much foreign investment here and the Board of Investment of Thailand was very cooperative about this project, considering it a 'show project', and there were tax advantages for hundred percent foreign-owned companies investing here," he said. "In the last two or three years there has been almost no investment in this area due to the political situation and we will be creating 250 new jobs in the particleboard mill. "And we are not going to try and poach [from other panel mills] the 50 or so skilled staff that we will need - we will train them from the beginning. We prefer to train our own people and have already employed the electricians we will need as well as having our own experienced engineer and a number of experienced Chinese engineering staff." The company also has the services of Herbert Hermann Karl Fahlbusch as project manager. This man has considerable experience of the industry, having worked for one of the German complete line suppliers for several years. Mr Hsieh is a civil engineer by training but has worked in the sawmilling industry for six years and was responsible for establishing the sawmill on this site. The site is located in a second-generation rubberwood plantation area and the company intends to apply for Forest Stewardship Council (FSC) approval for its products. The location is also alongside the main 'Asia Highway', which runs from Malaysia in the south to Bangkok in the north, while Songkhla port is only 50km away. So everything seems to be in place for this new producer to join the South East Asian panel market later this year.

We are becoming regular visitors to the Metro-Ply group of companies as it continues to add new panel manufacturing capacity to its range. In 2005 we reported on the construction of the company's first particleboard line, at Sai Noi, near Bangkok (WBPI issue 1 2005, p34). This line was equipped with a Siempelkamp ContiRoll continuous press which was 23.8m long - at the time. Metro had always intended to extend the length of that press and the foundations were laid with that in mind, while ancillary equipment was designed with the capacity to cater for that extension and its increased capacity. In 2006 we reported that Metro had brought forward its plans to build the extension (WBPI issue 1, 2006, p30) and that the press was now 30.4m in length and the capacity of the line was targeting 1,100m³/day of particleboard. Here we are a year later and this time we can report on a new, green-field, site two kilometres from the company's existing factory in Karnchanaburi. Only this time, the company has returned to MDF as the panel to be produced. I say "returned" because, as regular readers will know, Metro already has two MDF lines which have been operating successfully for some years at Karnchanaburi. The company began life as a teak sawmill, moving into panels with its first plywood line in 1973. It subsequently went into the production of decorative veneer, wet process hardboard, doors and finger-jointed hardwood. In 1995, Metro built its first MDF line, as Metro MDF Co Ltd. Supplied by Sunds, with a Küsters continuous press of 17m, it gave the company its entry into a new panel market. So successful was that entry that in 1997 the original press was extended to 23m, while in 2000 a second MDF line, Metro Fibre Co Ltd, was built at Karnchanaburi. This second line came from the same supplier (today known as Metso Panelboard of course) and has a 17m Küsters press, extendable to 30m (WBPI February/March 2001, p24). That extension has not yet been added. These two MDF lines have a combined capacity of around 230,000m³/year. Also on the Karnchanaburi site is a wet-process hardboard line dating from 1990 and again supplied by Sunds. This has a capacity of 80 tons/day. The new site for the third MDF line, Metro Advance Fibre Co Ltd, covers an area of 15ha and was formerly empty 'waste' land. Being close to the river, the land had to be piled and it turned out to be very variable in its nature, requiring anything from six metre- to 12 metre-deep piles. Ground work began in early 2006 and at the time of my visit in December, the 50,000m² warehouse building was complete and receiving large crates of machinery for the new line. Notable among these at that time was the Anthon saw - the third purchased by the Metro group - thought to be one of the largest angular systems this German saw maker has produced. It was certainly contained in a lot of very large wooden crates. The production hall was also erected and roofed and the Metso Contipress was under installation by that time. In accordance with Metro's customary practice, the press is initially 28m long but is designed to be extended to 40m eventually. Capacity initially is planned to be around 800m³/day depending on thickness of panel being produced. When extended, the press should produce around 1,000m³/day, according to Mr Piya Piyasombatkul - one of the two brothers who run the Metro-Ply business and who is responsible for the MDF and particleboard businesses - when interviewed in Bangkok. "We hope to produce the first board in the middle of 2007 - we will take our time to complete the installation of this big plant," he said. "We have built on quite a small scale in the past but we wanted to be sure that this new factory will be big enough for our future needs." Mr Piya said the company selected Metso Panelboard again as the supplier of this third line because it already had two lines from the same supplier (or its forbears) and is satisfied with the existing lines. "Line two was guaranteed to run at 60m/min and we are in fact achieving 84m/min. In fact the bottleneck at present is the dryer and I believe we could run even faster if that was resolved," he said. "Cost [of the project] was not the most significant factor in our decision on line 3, it was more a consideration of the support we could expect from the supplier - a supplier that could help us achieve our goals. "We are in a very competitive environment and need to perform better than our competitors. We need strong support form all our machinery suppliers to accept the challenge we give them. We are targeting 120m/min on the new line and that is a big target. It is not just down to the press but everything else around it as well - controls, infeed, outfeed, belt tracking and so on. Also the refiner, dryer, forming." Although the line has been designed to allow for extension of the press, apparently that may not happen. "If we achieve 100-plus metres a minute, we won't need to extend it, but if the market changes, or we can't achieve that speed/capacity, we will extend, and maybe look at a different product range," said Mr Piya. "If you want a new line today, then three or four hundred cube a day is not economical any more - you need to be at 800m³-plus to be cost-effective." The press is not currently equipped with a cooling zone and Mr Piya does not see the need for one at present. However, one could be fitted, especially when the press is extended, should Metro feel it would offer an advantage. Mr Piya admits that finding the wood raw material or the market will not happen overnight, "but we believe in the [positive] market trend and in the product and that MDF still has room for market growth." The subject of wood supply is always a hot topic in Thailand and in recent times, supplies of rubberwood - Metro's main source - have become a lot tighter, with competition from energy generation and an upturn in the market price of latex affecting wood supplies. "I believe there is enough wood in the south and east of the country and we are close to Myanmar at Karnchanaburi, where there is a lot of rubberwood, if Myanmar opens up as I think it will in the near future," said Mr Piya. He also believes that the better price for latex and for rubberwood will stimulate more plantation activity. However, the trend in Thailand by most manufacturers of rubberwood-based panels is to build in the south, nearer the wood supply. Karnchanaburi is north of Bangkok. "I don't see that much advantage in moving to the south," said Mr Piya. "There are good port facilities at Bangkok. Should you build close to the ports and the market or the raw material? We prefer to be close to the market. Maybe in the future it will make sense to move to the south and we may consider relocating a plant that needs upgrading to the south." Metro is planning value-adding facilities for its new factory and will add short-cycle pressing lines at some point. It is also considering paper impregnation; and laminate flooring, which it currently produces only on a small scale to test the market. Metro's panel market is within Thailand but also to a large extent exports. "We plan to export [the new production] to China, the Middle East and east Asia," said Mr Piya. "India and Pakistan are also strengthening markets. "We will also be capable of producing Super E0 grade for the Japanese market although they are currently not so keen on rubberwood-based board." The MDF market in general is currently not easy according to Mr Piya. "We have seen increased prices for our production, but costs have risen very steeply. Wood has almost doubled in price, there has been a 12% increase in the value of the Thai Baht since December 2005 and transport and energy costs have also risen." These are problems faced by the whole panel industry, and not just in Thailand. But Metro-Ply's policy has always been to achieve economies of scale to remain competitive. They will be hoping this new mill will enable them to do just that.

The turbulent history of the former STA wood processing complex on its one square kilometre site in Hat Yai has been well-documented in WBPI over the last 10 years. Our most recent reports (issue 1, 2005, p42), described how MP Particleboard of Thailand and Evergreen Fibreboard of Malaysia formed a joint venture to save a major part of that original multi-wood-product project by taking on the two particleboard and two MDF production lines and beginning to restore them. Now we are able to report that the particleboard lines are running successfully under the Panel Plus name (see page 24), while the two MDF lines are on target to jointly produce 320,000m³/year of panels under the name of Siam Fibreboard (part of the Evergreen Group). The first thing we noticed on arriving at Siam Fibreboard's factory was the new office block under construction to replace the original temporary offices. But the investment made by Evergreen in its new venture by no means ends there. When Siam Fibreboard first took on the operations in 2004, MDF line 1 was capable of running, although in need of a lot of tender loving care, while line 2 required a total rebuild. That reconstruction was completed in March 2005. Meanwhile, line 1 had also received a lot of investment and today the two lines are both running at around 450-500m³/day, giving a total annual production of some 320,000m³, depending on thickness. The two lines are identical, being equipped with Siempelkamp generation Vl ContiRoll continuous presses, each 8ft wide and 20.6m long. Currently, chief executive Mr JC Kuo said he is producing thinner board on line 2 and thicker panels on line 1. The thinnest board produced to date is 4.75mm - at a speed of 650mm/sec. Although the two lines are running successfully, there are still improvements to be made, particularly in heat generation. "The original energy plant was from IMW but we couldn't burn dust in that and we changed over to a Maxxtec plant and added a Körting dust burner," said Mr Kuo. Further work remains to be done as part of some grander plans which this entrepreneur has for the site. A new debarker has also been installed. To improve panel quality, new Imal mat scanners have been installed on both MDF lines with blow detection and density profile measurement, while Firefly fire detection/extinguishing systems have also been fitted. The original layout of the factory had the two MDF lines in adjacent buildings with an open area in between. This area has now been roofed over to provide storage space, which will be required when Mr Kuo's latest plans come to fruition. "We had always planned to build a third line here and this will be installed alongside line 2," he said. The entire covered area is now vast and Mr Kuo claimed that in fact one could park two A380 airliners inside the factory! "To purchase, restore and upgrade these two lines has cost us about the same as buying line 3 new," said Mr Kuo ruefully. "But that is just us - not all companies could have done it so cheaply!" From past experience, Mr Kuo and his team lack nothing in resourcefulness - for instance sourcing obsolete electronic components for the continuous presses on the internet saved a great deal of money. The staff also encompass enough experience to carry out a lot of work for themselves. The cost of the planned new line is estimated at MYR120m (US$33.6m), depending on currency movements. Plans for that third line have not progressed quite as fast as this energetic executive would have liked due to delays in obtaining a licence from the Thailand Board of Investment. "There were delays in issuing the licence due to bureaucracy and stringent conditions on funding in order to get Pioneer Status, but we have the funds available - we are healthy enough as a company but it still takes time to convince the authorities," said Mr Kuo, who successfully floated the Evergreen group on the Malaysian stock exchange in March 2005, with the Kuo family retaining 48% of the business. Approval for line 3 finally came at the end of May last year, although there are still some "local issues" to overcome, said Mr Kuo, who already has the machinery supply for the new line sorted out. "We signed a memorandum of understanding with Dieffenbacher for all the equipment from forming to finishing some time ago and had planned to have delivery on site last year but we now hope to confirm the order before mid-2007," he said. In the meantime, work has started on the chipping, debarking and the installation of the cut-to-size system. The latter will be a secondhand Anthon angular plant formerly used by Pfleiderer of Germany. An eight-head Steinemann sander for line 3 was purchased from panel maker SEP of Italy when it closed down. The sander had only been in use for a year. "The new line will have a number of special features on it, including several safety features because it will be running at very high speeds. It will be a fast, thin board line and we are aiming at 1,500-2,000mm/sec for 1.8mm board," said Mr Kuo. "You wouldn't want to drive a Ferrari without brakes or air bags; we must be able to stop the line quickly in an emergency and we will have a special mat overlap detection system and a Dieffensor [glue lump/foreign body detector], to protect the press belts." Andritz will supply the 54/60in refiner. Mr Kuo has ordered a GTS Energy plant for line 3 and that deal also involves sorting out some problems with his recently upgraded system for the existing lines. "We still have to resolve the electrical power supply issues for the third line and this has caused some delay as well, but we will have a new sub-station in mid-2008. A new water treatment plant - a copy of the existing one - is also under preparation and will be ready by March 2007," said Mr Kuo. Siam Fibreboard is only one part of what is a rapidly-growing group of companies known as the Evergreen Group. The business, started by Mr Kuo's father as a small veneer slicing concern in Singapore in the early 1970s, now has many facets: Evergreen Fibreboard in Johor state, Malaysia has two MDF lines - one with a calender press and the other with a Dieffenbacher continuous press. Allgreen Timber Products in Segamat has a Bison press-equipped particleboard line and there is a knock-down furniture manufacturing division covering 30 acres on six sites in Johor, close to the MDF lines. In December 2006, Evergreen completed the purchase of Takeuchi MDF, also in Johor, from the Merbok group. This factory has a 6ft-wide Mende-type calender line and a 4ft-wide, 17m long, Küsters press line. Including this acquisition, the Evergreen group can now boast a total panel production capacity of around 700,000m³/year. "We treat the whole group's production as one, under one sales and marketing arm," said Mr Kuo. "The lighter-coloured board is produced by Siam Fibreboard using rubberwood, while Takeuchi uses tropical wood which produces a darker board with good swelling characteristics. Takeuchi production is also made to E0 and Super E0, four star (F****) grades, popular with the Japanese market, and that is a new beginning for us. "Takeuchi offers good synergies and we [the group] are short of thin board, especially until line 3 is running. Tropical hardwood [furnish] is new to our product range and will introduce us to new markets. "The company also has a contracted supply of wood chips so we will not be competing with our existing wood supply, so Takeuchi is complementary for us in every way and is completely ready to run. We will also keep all the staff. We are buying the land, buildings, machinery, spares and wood raw material contracts." The only thing that will change, it seems, is the company name as the former Takeuchi will be integrated into the Evergreen Fibreboard Johor Bahru division. The balance of the Merbok business was sold to DongWha, which also owns the former Golden Hope Fibreboard MDF mill. Coming back to Hat Yai, Mr Kuo also informed me that he has purchased a further 18 rai (about 29,000m²) of land from the bankers of the former STA Group. Why he would not say, except to state mysteriously "We have plans for that land". I have known JC Kuo for some years and have never known a time when he did not "have plans". I am sure they will be realised in the not-too-distant future.

When Ms Amporn Kanjanakumnerd, managing director of MP Particleboard, set about taking over the former STA panel production lines in 2002, she began a journey that was long and arduous, but which resulted in the resurrection of two particleboard lines. At first, they went under the name of Hat Yai Panel, but this was later changed to Panel Plus Co Ltd (WBPI issue 1, 2005, p38). At the time of our last visit in December 2004, one of the two Siempelkamp ContiRoll lines was running, while the other was undergoing extensive refurbishment. When I visited again almost exactly two years later, both particleboard lines were running and several other changes had been made at this continually evolving site. Line 1 (6ftx18m) was originally rated at 310m³/day but was well on its way to achieving a consistent 400m³ in December. It started production under Panel Plus in June 2005 after standing idle for 10 years and being 'robbed' of many of its parts by the previous management to keep line 2 going. Particleboard line 2 (8ftx28m) was rated at 630m³ a day but is targeting 800m³ and started up again in August 2004. This was the line which was running when Panel Plus (or MP Particleboard at the time) bought the site but was subsequently the subject of an arson attack as we reported in that last story two years ago. The rebuild of that line included the addition of two double-deck Pal Superscreens, extra chippers (by Klöckner and moved from the former plywood factory on the site) and a Pallmann double-stream refiner. An Imal glue metering system was also added. The opportunity was also taken to modify the press infeed with a flexible section. "Also very importantly, the electronics were all upgraded to the latest standards," said Dr Kitti Treana-sthiarphan, technical development executive with Panel Plus, who has been involved with this project since day one over 10 years ago. "We are not quite at those higher capacities yet but the chipping capacity is there and it would be possible for us even to go above those 400m³ and 800m³ daily target figures," said Dr Kitti. In 2006, further refinements were made with the addition of an Imal mat water spray before the press and the addition of blow detectors from the same Italian firm. "These have all worked well to increase the capacity of the line," said Dr Kitti. And the company has not finished modifying the lines yet. Line 1 was in the process of changing over from oil to biomass as the fuel source for energy generation for heating the press and refining system, with commissioning due in early December. Meanwhile line 2 was in the process of undergoing renovation of the Vyncke energy plant from the closed STA plywood factory (it only ran for one year over 10 years ago) and this was also being converted to biomass and getting new electronic controls. The original ABS dust/oil burner was also being replaced with a Körting 100% wood dust burner. Because the Hat Yai site was originally designed as a massive wood processing complex, the layout of the buildings was not ideal once the operation was split into two separate businesses, with Panel Plus operating the two particleboard lines, Siam Fibreboard (a division of Evergreen Fibreboard of Malaysia) the two MDF lines, and other parts being closed. Thus the offices of the original factory were too far from the action and these have now been demolished and new offices created closer to the two particleboard factories, inside the renovated former veneer factory. On the site of the original offices, Panel Plus is constructing residential accommodation for the management. This 11-family complex was due to be completed in January 2007. Security at the site has also been improved by bringing the operations closer together. However Panel Plus is not just about updating or replacing existing facilities, as our factory tour soon revealed. In a completely new building, of 42x102m with a wide glass frontage, being erected on the Hat Yai site, a decor paper impregnation line was under installation. The line, from Vits Systems of Germany, was delivered in October and was expected to start running in January. Total capacity of the line will be 24 million m²/year although the company aims to produce just half that figure initially, all for its own consumption. Staff for the line were being trained in Germany, with this technology transfer being arranged by Vits. The impregnation business will be called Panel Decor Co Ltd. Of course an impregnation line would be of little use without short-cycle pressing capabilities and Panel Plus has the four Siempelkamp lines supplied to the original STA factory. There are two 6x8ft semi-automatic lines dating from 1993/4 and two 6x16ft fully automatic units installed in 1995. They have the capacity to surface 50% of the Hat Yai particleboard output. Panel Plus also has one short-cycle press line in Bangkok. This is a 6x8ft Wemhöner line with manual paper feed. That company is known as Furnish Board Co Ltd and was set up to supply the MP Particleboard bagasse-based line nearby. The particleboard produced at Hat Yai is in 9-37mm thicknesses and mainly 6x8ft, though panels of 4x8ft are also made. Super E0, E0, high-moisture resistant melamine urea formaldehyde-glued board and E1 and E2 grades are all produced here. Resin supplies come from the neighbouring resin plant which is operated by Dynea. Normal wood raw material for the two particleboard lines is sawmill slabs, small logs and sawdust, all being from rubberwood, which is plentiful in this part of southern Thailand. The rainy season, normally at about the time of my visit, can cause disruption to wood supplies and the company is looking at using plantation species such as mixed fruit trees and acacia if necessary during a wet rainy season. November 2006 was in fact unusually dry in the south, while the north of the country experienced heavy flooding. "The wood supply is plentiful, but the price has risen a lot," said Dr Kitti. "From 1993 to 2004 or so it fluctuated up to a maximum of 1,000 baht (US$28) per ton but rarely exceeded 800 baht. Recently the maximum price has been nearer 1,300 baht/ton but now [December] it is around 1,000 baht. "This increased cost is partly due to the increased world oil price leading to factories around Bangkok burning wood for energy production." That sounds like a familiar story all over the world these days. However, another major contributory factor has been the increasing price of latex - the primary product of rubberwood trees. That has almost doubled in the last two years, going from around 40-50 baht/kg to around 90 baht, although it has since fallen to around 60 baht. Increased oil prices may have contributed in part at least to a resurgence of rubber over plastic to account for part of this increase, but in southern Thailand terrorist activity has also made rubber tapping an increasingly dangerous occupation. The Panel Plus operation has come a long way since February 2004, with a lot of improvements to the production process, so where will it go from here? "We are looking at other areas like the training of our people and we are implementing a lot of training programmes," said Dr Kitti. "We are working towards a TPM (total production management) system over the next three years to continue improving quality and productivity. This is part of a group-wide strategy for the Mitr Phol Sugar [MP] group." The veneer slicing equipment of the former STA company has been sold to China and the peeling line for plywood veneer has been sold to Russia. This will free up yet more space at Hat Yai for future developments or for storage. We will have to wait and see what develops but judging from the last two years' investments, Panel Plus seems unlikely to stand still for long.