All wood based panels which are dry to the touch will shrink and swell as atmospheric conditions around them change. The amount of change is dependent on how high or low the humidity and temperature are, relative to typical conditions, and how long the adverse conditions last.   The dynamic nature of the system will cause moisture gradients within panels and these can lead to internal stresses caused by differential swelling or shrinking. This can result in delamination and splitting, most often seen in veneer based products like plywood. It can also cause warping if one side has swollen or shrunk more than the other.   Warping is a general term used to describe any movement that causes a panel to lose its shape. Cupping is generally associated with flooring where the edges are raised above the middle of the panel and crowning is the opposite of this. Twisting describes the warping in the plane of a panel such that at least one corner is higher than the others. Bowing is curvature of the face. Crook or spring is a curvature of the panel edge. This last type is rare in wood based panels and where it does occur is often associated with inaccurate machining rather than moisture-induced distortion.   Warping, and in particular bowing, can also occur if the panel is not symmetrical through its thickness. For example particleboard that has been sanded more on one face than the other or OSB where the top surface layer is thicker than the bottom.   The amount of differential shrinkage or swelling required to cause warping can be very small. Take for example a flooring product that is 100mm wide and 1.4m long with a 10mm bow in the middle. The difference in length between the bottom and upper face can be estimated via simple trigonometry (see diagram). The sum of the two hypotenuses will provide a rough estimate of the swelling required in the top face to cause 10mm of bow. In this case, the two hypotenuses add up to 1400.143 when rounded to three decimal points. This tells us that if the surface length swells by only 0.01% more than the bottom, we can expect a bow of 10mm.   Admittedly, this method underestimates the differential swelling required, but not by much.   This simple calculation also illustrates why it is important to have expansion gaps around the edges of floating floors.  

As we start a new year, the tables have very much turned in the OSB industry worldwide, as our surveys in this issue reveal.
In last year's report on the market in 2005, North American mill owners were well inside their 'comfort zone' after three years of unprecedented demand and the associated bumper profits. However, they were, it is fair to say, viewing 2006 with some caution as forecasters talked of a marked fall in housing demand. The reality was far worse.

Right beside the wide and majestic Mahakam river sits the extensive veneer based products factory of Sumalindo Lestari Jaya (SLJ). Founded in 1980 as a natural forest concession holder and plywood manufacturer in Samarinda on Borneo, PT Sumalindo Lestari Jaya (SLJ) is still producing up to 15,000m³/month of plywood at its Loa Janan factory on the edge of this capital city of Kalimantan Timur province (p50). The company also diversified into MDF in 1994, building a factory up-river from Samarinda (see p44), while more recently it has also gone into the production of laminated veneer lumber (LVL) at Loa Janan. All that manufacturing capacity requires a secure and sustainable wood resource and SLJ has expended considerable effort on that front in recent years. Although the original Sumalindo company has been trading for over 30 years, it is not at all the same company which is in operation today. Mr Lee Yuen Chak, a director of SLJ, explained its recent troubled history and its current efforts concerning forestry and its log supply. "In late 2002, the majority of the company ownership was under Astra International and was in financial trouble. It carried close to US$200m in total debt and was in negative cashflow to the tune of close to US$6m for the 2002 year alone. "Then 75% of the shareholding of the company was sold to Sumber Graha Sejahtera (SGS) in 2002. "Over the last four years the new management has introduced very stringent cost control, changed the product mix and the production processes themselves, as well as investing in machinery and production upgrades, and those strategies had a real result in only 12 months. In 2003, 2004 and 2005, the company's operations recovered strongly and we were able to move back into positive cashflow," said the director. Previously known as the Hasko Group, SGS is a 'timber-centric' group in the words of Mr Lee and, he claims, one of the largest timber groups in South East Asia. "The group, established in the 1970s, has been growing steadily over the years - it is one of the few that has in recent years - and its business is focused on Indonesia," he said. The group also owns PSUT plywood in Sumatra and a company called Palopo in Sulawesi, as well as having a share in Banjamarsin Kalimantan Wijaya (WTUPI), another plywood producer. "We are one of the most dynamic timber groups in the region in terms of product mix, production controls, process and efficiency and these factors enabled us to grow steadily when the wood industry as a whole was suffering huge problems with weak selling prices and rising production costs, together with high levels of competition. "We had successfully turned Sumalindo round and by 2005, the EBITDA [earnings before interest, tax, depreciation and amortisation] was close to US$9m, compared to minus US$6m in 2002. And this was achieved in spite of losing the [national] oil subsidy - otherwise we could have been closer to US$15m." Clearly Mr Lee is proud of his company's financial record since the takeover, but that is not his only concern. Sumalindo has apparently put a lot of effort into combating the common perception that all Indonesian wood products are tainted by the stigma of illegal logging. The company owns several forest concessions and plantations in Kalimantan and this aspect of the business is a particular responsibility of Mr Lee. "The total planted area that Sumalindo owns is close to 20,000ha, mainly planted with gmelina arborea, acacia mangium and falcata species," he said. "The plantation wood is mainly to support the MDF operation but we are also expediting the planting, and revising the silviculture, of gmelina for mechanical wood, that is logs suitable for use in plywood. "In future the supply of large diameter logs will get tighter and gmelina arborea is a good complementary and substitute material for plywood production. The rotation period is around 10-12 years depending on diameter, but 12 years is a realistic target. We have already started peeling gmelina in our mini-rotary spindle-less lathes at the MDF mill, for plywood core stock, with the waste going to the MDF mill and helping to lower feed-stock costs there." However, plantations are obviously not the whole story. With the plywood operation consuming logs to cover its 15,000m³/month output, plus the LVL lines and the MDF factory, obviously SLJ has to utilise logs from the natural forest as well. Here the company has taken a pro-active approach and gained Forest Stewardship Council (FSC) accreditation for at least part of its log supply. This certification was achieved in January 2006 and Sumalindo also has a chain of custody certification from the FSC and BMTRADA valid to 2011 for part of its forestlands. "We have four forest management units (FMU) totalling 516,261ha and the largest of them, SLJ ll, which covers 267,600ha, is the one which was certified," said Mr Lee. "The management rights to this concession were extended by 45 years to 2051 by the Indonesian government in 2004. "I believe we are the largest FMU with FSC certification in the world for tropical forest. It wasn't easy to achieve FSC certification and it took a lot of time, financial resources and knowledge to revise our forestry planning and operational processes and so on in order to meet the FSC principles and criteria," continued Mr Lee. "Certification is a demonstration of our commitment to the social and environmental aspects of our business. We want to send a message to our buyers that there are Indonesian companies which are serious about these issues and we are one of them." As part of the FSC process, Sumalindo has given a commitment to put its other three FMUs through certification too and is currently working on FMU IV, while the plantation side is undergoing a similar exercise. In the natural forest, the system involves selective cutting and natural regeneration. "On average, in one hectare there are only six logs of the required diameter (50cm or above), which will average around five cubic metres each so we can only harvest 30m³/hectare at most. Certain species are also protected and cannot be harvested at all," explained Mr Lee. "The cutting regime allows for natural regeneration on a sustainable 35-year cycle." Smartwood is the auditor for Sumalindo's concessions and makes six-monthly inspections to ensure compliance. Of course companies which go through this process also hope for some financial benefit down the line, but that is also not easy to achieve, said the director. "We had hoped to realise a commercial benefit - and there are meaningful financial benefits to be had from certification, but we went into it for the social/environmental objectives so a commercial benefit would be a pleasant surprise," he said. "If plywood buyers are serious about helping Indonesia to preserve the tropical forest, they should buy certified products like ours and must recognise that this does involve higher costs for us and they must be willing to compensate the concession holders in terms of price. So far the Netherlands and Germany are prepared to pay more, but the reception in the UK is somewhat lagging behind these two countries, for example." Another project instigated in 2006 concerns the resin supply for the company. "We are in an advanced stage of transition to cut our glue costs, but I can't discuss this in detail at present," said Mr Lee when interviewed in December; negotiations were ongoing at that time. "but to summarise, we have had three strategic cost reduction exercises in progress in 2006: the coal-fired power station at the MDF factory; lowering the feed-stock costs for MDF; and lowering the glue costs. "With these lower costs and our high quality products we are certainly capable of being one of the highest quality producers in South East Asia, if not all of Asia."

Right beside the Mahakam river sits the extensive veneer based products factory of Sumalindo Lestari Jaya (SLJ). That river provides the factory's lifeline as logs are floated from its concessions in Kalimantan right into the factory premises. The current factory at Loa Janan dates from 1982 when it had four production lines. In 1984, two 'jumbo' lines were added and in 1990 the company added a two-daylight Raute press for the application of paper overlay, phenolic film facing and decorative v-grooved panels. There are three main product lines manufactured here. The first is 4x8ft for secondary processing such as v-grooved wall panelling produced on site and products for the furniture industry. These products are mainly exported to Australia, North America and Europe. The second product line is 3x6ft or 7ft for flooring base panels in Japan and Korea. The third is those jumbo-sized panels of 4 or 5ftx9ft or 10ft as a general purpose plywood which mainly goes to North America and Europe. Exports account for around 90% of production, in grades of BB and BB/CC and to JAS standard for Japan and CE for Europe. The mill has had ISO 9002 quality certification since 1994 and ISO 14000 environmental certification since 1997. The factory was only able to produce about 12,000m³ of its 15,000m³ capability in 2006 due to flooding in the concessions. About 15% of the total wood supply for Loa Janan comes from plantation wood at present but this is planned to rise to 40% this year (2007), assisted by the new mini-rotary peeling plant at the MDF factory (see p44), which will produce about 6,000m³ of veneer a month for plywood cores, which is equivalent to about 12,000m³/month of plantation logs. In total, about 100,000m³ of plantation logs per year are currently utilised for plywood, producing around 60,000m³ of panels which are FSC certified. That will be 33% of the company's monthly plywood output in 2007. The jumbo lines use only FSC certified logs. Tracking of the wood starts at the concessions with a bar-code label on the log and this is tracked through the mill, with an FSC sticker and bar-coded packaging applied to the final product at the factory. Logs are brought from the concessions via the adjacent river, or round the coast and up the river, by barge or in log rafts. The rafts are made up of 'sinkers' and 'floaters' in a ratio of 1:4. The log storage pond is just upriver from the mill and logs are floated down to an inlet canal. There is a buffer log pond in front of the production buildings and logs are craned from the inlet to these before craning out again for cross-cutting and peeling. The peelers handle 100 long-grain and 45 short-grain logs per shift. "We peel minimum 35cm logs here and up to now the waste has gone to energy production, but with the new mini-rotary mill at the MDF site, we can peel smaller logs and get higher value from them," explained Mr Eko Arief S, planning manager for the plywood mill at Loa Janan. There are currently six peeling lines: a 10ft wide one for face, back and core; two 5ft lathes for core; and two 11ft and one 7ft, again for face, back and core veneer. "The future strategy for Loa Janan is to increase the percentage of long-grain veneer peeled for face and back and to decrease the core production, replacing it with veneer from the new mini-rotary mill. "The development of the peeling at the MDF mill is not about increasing capacity, but efficiency. We will also change the product mix to increase the percentage of core from plantation wood and to increase core (short-grain) veneer production overall to make more LVL," said Mr Eko. Production of LVL began at Loa Janan in 2005 at 700m³/month and will increase to 2,000m³/month during 2007. The factory has 21 single-opening hot presses for scarf jointing veneers and five multi-daylight hot presses for plywood. There are nine veneer dryers with a total capacity of 600m³ per shift. Seventeen veneer composers serve three lines and veneers are hand-patched after composing. Glue is roller-applied and includes phenol formaldehyde for exterior panels, urea formaldehyde for interior panels and melamine urea formaldehyde for moisture resistant grades. Using strips sawn from peeler cores, gmelina is finger- and butt-jointed to make door cores. The mill works 24 hours a day in two shifts and employs 1,400 direct staff and 600 sub-contractors. Mr Tsukamoto Mineo from Japan is vice chief executive of the plywood operations and has seen some changes in his many years in the plywood business. "Twenty-odd years ago there was a rush to plywood because of the log export ban in Indonesia. That led to about 120 plywood mills but today there are only around 30 to 50 left. Thus now is the time to invest and make the most of the synergies between the MDF and veneer-based operations," he said. "Very few companies are offering plantation timber but Sumalindo has a long experience in tree planting. We have tried a lot of species before settling on gmelina and acacia mangium. Gmelina prefers alkaline soil and does not grow so quickly near our MDF factory where the soil is acidic. So we concentrated on acacia in that area. It has a density of 400kg/m³ and a creamy colour and it is less hard than rubberwood." Costs have continued to rise for the Sumalindo plywood factory in the past year: "About 10% of our costs are resin-based and those costs have been rising steeply," said Mr Eko. "Meanwhile, the price of meranti logs has gone from around US$135/m³ in January 2006 to US$200-230/m³ during the year. "In the second quarter, the price of plywood rose, up to October, then it started falling back again. It is not so bad for us because we have value-added products and our jumbo and flooring grade prices are higher. In the third quarter, the average price was US$590-600/m³ FOB; 12 months ago it was US$370. "However, our costs have also doubled. This year [2006] was the worst for the Indonesian plywood industry because of the poor log supply due to the heavy rains." In spite of these difficulties, PT Sumalindo Lestari Jaya's plywood factory is receiving strong commitment from the company and should receive a boost from the new mini-rotary facility. It is also appears to be improving its environmental credentials, which just requires the encouragement of buyers in the west in the form of being prepared to pay a premium price for a 'greener' product.

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.

On my last visit to Indonesia at the end of 2005, it was not practicable for me to visit Sumatera Prima Fibreboard's (SPF) MDF line, but WBPI carried my interview with marketing manager Mr Tee TK in Jakarta about the company and the national issues with which it, and all panel lines there, have to deal (issue 1, 2006, p48). In December 2006 I was fortunate enough to have the opportunity to visit that MDF mill and to talk to SPF's operations director John Hendarso about the 'birth' of the line - the company's first in panel manufacturing - in 2003 and about the company's plans for future expansion. "We were looking at a growing [panel] market and could see that the plywood industry was starting to have problems with tropical wood raw material supplies and that is why we decided to build an MDF mill," said Mr Hendarso. The site chosen for the new venture was located 28km south of Palembang in the southern part of Sumatera island and I asked why SPF chose that location. "The most important thing is that we looked at this province and could see that rubber trees were being wasted. The farmers had been cutting down trees which were unproductive [for latex] and they didn't know what to do with them. Often, they just burned them as waste, with a small amount being used for fuel for cooking and for brick kilns," he explained. "The resource is here in southern Sumatera. Although the north is bigger for natural rubber production than the south, we have the advantage here that the distance to market is much less than from the north." Construction of the line began in 2002 and the first board was produced on October 1, 2003, with commercial production being achieved in January 2004. "I fast-tracked the project because it was important to get the line running and earning money and we got full support from Siempelkamp with many commissioning engineers to achieve a rapid start-up," said the operations director. The offices for the line are still located in a temporary building as the prime objective was to get the plant running. It is planned to build new offices when the next phase of development is under way. The raw material for the line is 100% rubberwood as a renewable plantation-grown resource and logs and small roundwood come from an 80-110km radius. "We use older rubber trees because there is less latex in them and that is what we emphasise to the farmers. Latex production is finished when the tree reaches about 25 years of age," said Mr Hendarso. "There are 556,800ha of plantations for us to call on, although transport is a problem due to the poor roads and that is the big issue." The whole area surrounding the mill is wet and required a lot of deep piling before the factory could be built and the stock in the woodyard was high in early December to ensure a constant supply to the mill during the rainy season. The wood is all debarked in a Fuji Kogyo machine (part of the Siempelkamp scope of supply) and the bark is used for fuel for the boiler in a Vyncke energy system. Electricity comes from the national grid, although Mr Hendarso admitted that the supply is not always reliable. A Nicholson disc chipper produces chips which are conveyed to the steel chip silo and then screened on a Texpan oscillating screen. The refiner is an Andritz Sprout Bauer 50/54in unit. Forming is mechanical, supplied by Texpan. The ContiRoll press is 23.5m long and 8ft wide and is protected by a Firefly spark detection/extinguishing system installed in 2003. Other areas of the plant are protected by equipment supplied by Minimax as part of the original Siempelkamp supply. At the time of my visit, the press was 'screaming' as the mat was pressed into 3mm board at high speed, making that high-pitched noise a welcome sound. "The ContiRoll was designed for a speed of 800mm/sec but was subsequently upgraded to 900 and then 930mm/sec. Now it is achieving 1,000mm," said Mr Hendarso. The mill has a production output of about 140,000m³/year. "One business value driver is productivity and improving that productivity is key to the business and we are continually upgrading the line to achieve this," said the director. "People are also very important, as is product innovation. We not only produce E2 but also E1 and we are capable of making E0 or Japanese F four star Super E0. "The keys to running a wood based panel mill are efficiency, strategy and the commitment of senior management to give a strong inspiration to motivate our team to reach all our targets." Sumatera Prima Fibreboard has no plans to increase its MDF capacity significantly, but does have firm plans to build a particleboard line at the Palembang site. "We see a good strong synergy between particleboard and MDF - we have good human resources here and we are now competent in running a wood based panel line. It will also mean more efficient use of the raw material as we will be able to use even the small diameter wood for particleboard; wood below 10cm diameter is difficult to utilise for MDF because of difficulty debarking," said Mr Hendarso. The company is looking at a 1,350m³/day continuous line and is still negotiating with the three suppliers of complete lines (Siempelkamp, Dieffenbacher and Metso) and carrying out final project evaluation. "What we have learned from talking to people with experience in Asia and Australia is that economy of scale, with a larger capacity line, is better," said the director. "Our time scale for implementation of the project is delivery and construction in about 20 months, starting groundwork in the third quarter of 2007. Production is planned for the last quarter of 2009." "We feel that the market for particleboard and MDF is growing up," he said. "If you look at the population of Indonesia, the demand per capita is still low but we expect economic growth. Indonesia still needs educating about the use of MDF versus plywood but demand is growing. "The removal of the oil subsidy in 2005 caused a blip in growth but we will overcome that. This year, inflation is expected to be about 6-6.5% and interest rates are coming down." Efficiency and quality are joint watchwords for SPF, according to Mr Hendarso. "In this business you have to be more and more efficient and minimise downgrade and downtime and quality must be the key issue," he said. "We are now accredited by Japan Quality Assurance and just obtained JIS [Japanese Industrial Standard] certification, which is a key milestone for us. We plan to obtain ISO 9001 certification in 2007. The company exports about 65% of its MDF production to China, South East Asia, Vietnam and - soon - Japan. Sumatera Prima Fibreboard has only been producing MDF commercially for three years but already feels confident enough to add particleboard to its portfolio and seems determined to succeed in this country where to date few mills exist to exploit the considerable wood resource.

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.  

My journey to visit a mill I have long wanted to see began with a two-hour flight from Jakarta on Java island to Balikpapan on the east coast of the island of Borneo, in the Indonesian province of Kalimantan. Then came a two-and-a-half hour drive north to Samarinda, arriving at midnight. I was glad to put off the rest of the journey to the mill in Tanjung Harapan until the morning and to check into an hotel in Samarinda, a quite large town supported principally by coal and oil. It is situated on the Mahakam river and is the capital of, and most populous city in, Kalimantan. It is also the location for Sumalindo's plywood factory (see p50). The next morning we embarked on a two-hour drive across country, largely on unfinished roads still under construction, to reach the small village of Tanjung Harapan beside the wide river Mahakam which is reputed to be crocodile-infested. There, standing out on the slope above the opposite river bank and looking slightly incongruous in this remote location were the cyclones of the Sumalindo MDF factory. A ferry driver was duly summoned and a small wooden flat-bottomed boat with outboard motor was produced to take me and my 'guide', Ahmad Syaukani from Sumalindo's Samarinda plywood mill, across the river to visit the factory. Although that journey may have seemed somewhat arduous to me (and I wasn't driving!), spare a thought for this company and its machinery suppliers when the first MDF line was built here in 1994. Then there was no usable road from Samarinda to Tanjung Harapan and everything - people and equipment - travelled by river from the city to the mill site. Clearance of the jungle and construction of the company's first MDF line commenced in 1994, with start-up coming 12 months later. That first line was supplied as a package from Sunds Defibrator with a Küsters continuous press. Before that line was even running to its full potential, Sumalindo ordered a second MDF line to be supplied as a complete package by Siempelkamp, with a ContiRoll continuous press. That line started production in 1996. The combined capacity of the two lines is currently around 200,000m³ annually, with actual production of about 190,000m³. "We aim to reach 200,000m³ and will soon achieve 215,000m³," said Mr Budi, head of production for line 2. "In February 2007, we will change the drive chain on the ContiRoll press for a stronger one from Siempelkamp to increase the speed, then we will achieve 215,000m³." That changeover of the chain was expected to take a maximum of seven days' downtime and will be supervised by a Siempelkamp engineer. Logs for the two MDF lines come from plantation acacia, gmelina and other tropical hardwood species close to the mill site. The company also has forest concessions in this area with permission to exploit the trees in a strictly controlled regime and has Forest Stewardship Council (FSC) certification for some of its products (see p47). The company is currently investing very heavily at the MDF site. In December it was erecting a complete new factory to house 15 spindle-less rotary lathes from Taiwan to produce core veneer for its plywood mill in Samarinda. The company already has five of these lines from China working at the MDF factory since 2004, but needs additional capacity as log supplies from the plantations increase. These spindle-less lathes are able to peel logs down to a five centimetre core to maximise the high-value use of the wood supply. Waste from the veneer peeling is raw material for the MDF line, thus maximising the utilisation of the wood. Another major project underway in December was a coal-fired electricity generating plant to serve the two MDF lines and the rotary peeling lines. The complete project is being supplied from Shandong, China. Mr Lee Yuen Chak, a director of PT Sumalindo Lestari Jaya Tbk, explained the rationale behind this major investment. "The government subsidy on oil products such as diesel was withdrawn in August 2005 and this affected our MDF operation with high costs," he explained. Up to now the factory has run on diesel generators, but with the withdrawal of subsidies the cost of diesel made such electricity generation uneconomic. "Subsidised fuel cost about Rph2,400 (US$0.27) a litre and after the subsidy was withdrawn the price went up as high as Rph6,000 a litre," said Mr Lee. "We had always planned to build a coal-fired power plant but the loss of subsidy caused us to bring our plans forward and we financed and procured the equipment in early 2006." Transport of the components took a month and construction began in August last year. This was not the first such power plant for the group, as an affiliated company has already been down the same route, so the plant purchased for the MDF factory has a proven track record. The structure towers above the existing buildings and will be rated at 15MW designed power output from two 7.5MW generators. The two MDF lines alone require 13MW, so there will be no spare capacity even then. Coal mining is a major industry in Kalimantan - we passed several coal fields on the drive here - and there will be no shortage of supply of this fuel. The power station is equipped with a crusher to produce granular coal for the furnace. The new power plant is clearly going to bring a dramatic reduction in Sumalindo's energy costs and the company claims it will become one of the lowest-cost producers in the region. The MDF Lines A debarker by Fuji Kogyo removes bark from the logs, which is then burned in the energy plants. Line l has a Sunds energy plant, while line 2 has one from IMW, which, in common with most from this, now extinct, supplier is a source of some problems for Sumalindo. The debarker has three separate infeeds - one for logs needing debarking, one for those which come in ready-debarked and a spare in case of blockages. There is a large Fuji Kogyo disc chipper and two drum chippers, one by Zeno and the other by Klöckner. Chipping is followed at Sumalindo by chip washing to remove damaging impurities such as grit and stones. The chips are screened by Texpan screens on both lines to three sorts: fines which go to the energy plants; accepts; and oversize which goes to be re-chipped. Line 1 has a Sunds Defibrator refiner, while line 2 has one from Andritz. Both refiners currently run at around 14 tons/hour, but Sumalindo plans to upgrade both. Resin, wax and hardener are injected in the blowlines. Fibre is classified after drying. The Küsters press is 23m long, while the Siempelkamp ContiRoll is 22.5m. Forming is pneumatic on line 1 and mechanical on line 2. Both lines have Steinemann six-head sanders and cutting-to-size is handled by a Raumatic saw on line 1 and a Schwabedissen on line 2. Resin comes from the Orica Resins factory in Samarinda and from GCKA in Banjarmasin in the south of Kalimantan. Sumalindo produces boards in thicknesses of 2.4-25mm, with the regular production being in E1 or E2 grade using urea formaldehyde (UF) glues. The factory also produces E0 grade for export to Japan, employing melamine (MUF) glues. Densities are 650kg/m3 for low density fibreboard, using 60% gmelina species as the raw material, and 850kg/m3 for high-density, as well as the standard production. The factory runs 24 hours a day, seven days a week, employing 800 staff, around 50-60% of whom come from the local village across the river. The rest come mainly from Java and are provided with accommodation at the factory. There are also several houses and a guest house at the site for management and guests. The lack of decent roads gives the company an environmental plus as all transport is necessarily by river, with MDF products going to the harbour by the plywood factory downriver, by barge. Markets for MDF vary according to prevailing prices but are generally around 40/60% local to export. Considering the obstacles which have to be overcome to develop a factory such as this in the middle of the jungle, one has to admire the engineers and the far-sightedness of the management at Sumalindo. The new electricity plant, incongruous as it looks in its jungle setting, is another bold step and the construction of the new veneer production factory will improve the financial viability of the site and optimise the utilisation of the valuable wood supply. n

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.