Historically, it had no involvement in panel production at all. So it seems surprising that the company should make the decision in 2005 to go into MDF production (the actual commitment to the project was delayed due to exceptional circumstances, but more of that later).
“Yes, we have the hydro-electric side of the business, but that is coming to an end due to environmental concerns about restricting the flow of the Yangtse River with too many such projects,” explained Jia Qing, board chairman and general manager of Baoshan Corporation, through an interpreter.
“In former times, the government gave support for this industry but now it pays more attention to environmental considerations.”
That explains the need to get out of reliance on the hydroelectric sector but not why the company chose to go into panel production.
“There were four main reasons for our decision to move into MDF production,” replied Mr Jia. “These were: the development of the company into the future; electrical power supply was available to support an MDF plant; since the 1970s we have had a 30,000mu tree plantation and today we have 200,000mu [ca13,330ha] of local tree species, mainly fir; and we believe there is a good market for wood based panels and that this will help us to expand our business.”
I asked the chairman where one would start in entering a totally new business area such as MDF manufacture.
“For sure we had no experience in the industry, so we had to hire people with that experience – the management of the line is obviously very important. We visited existing MDF  mills such as Baoyuan, Dongdun, Dare, Weilibang [Weihua], Sunway and Luyuan. That included a mixture of Siempelkamp and Dieffenbachersupplied mills.We also visited the Ligna exhibition in Germany in 2007.”
Shanghai Wood Based Panel Machinery’s continuous press was also considered at that time, said Mr Jia.
Having begun the investment planning process in 2005, Baoshan signed a contract with Dieffenbacher to supply the press line on December 27, 2007.
It was after that that those “exceptional circumstances” mentioned earlier interrupted proceedings.
OnMay 12, 2008, an earthquake measuring 8.0 on the Richter Scale, with its epicentre80km west-northwest of Chengdu, the capital of Sichuan, at a depth of 19km, shook not just the province, and metaphorically all of China, but also the Baoshan Corporation, severely.
Seven factories belonging to Baoshan were totally destroyed and 52 of its employees died in that catastrophe. “We lost RMB2.7bn and there was no insurance for such an event, but industry did receive a lot of government support,” said Mr Jia.
Amazingly, five of those factories are already up and running again and the other two were under reconstruction at the time of my meeting withMr Jia in March this year.
“So, we had intended to start our MDF project before the earthquake struck but in the event, we took it up again in June 2009, when we reconfirmed the contract with Dieffenbacher,” said the chairman.
The land for the mill had already been purchased in 2007 in PengZhou, Sichuan, with adequate water and electricity supply and close to the all-important Chengdu market: “One of the biggest furniture markets in China,” saidMr Jia.
The site covers an area of 220mu on former agricultural land already designated for industrial development.
Construction on the site began in June 2009 and the buildings were scheduled to be completed this May. Full production is planned for August. Total investment will be in the region of RMB420m (US$62m). One obvious question concerns the risk of further earthquakes in the region and Mr Jia said they had prepared for this eventuality.
“Baoshan and Dieffenbacher considered this problem together and we made the foundations stronger than normal, capable of resisting an earthquake of magnitude 8.0 and probably more,” he said. “This is also factored into the strong support for high buildings on the site, such as the cyclone towers.”
The actual production line was split into sub-contracts.
The green end – chippers, debarking, etc  – was supplied by Chinese contactors. The chip screening came from Jiangsu Baolong Electrical Manufacturing Company, while the sifter came from Schenkmann & Piel/Dieffenbacher.
Dieffenbacher was awarded everything from the dryer to the press, as well as part of the raw board handling. The flying diagonal cross-cut saw also came from Dieffenbacher’s subsidiary (exMetso Panelboard) in Finland. From the press to board storage is of local supply, while actual board storage was again awarded to Dieffenbacher, which was also made responsible for overall contract management/ coordination. The CPS continuous press is 23.6mx8ft. The contract for the 54in refiner was placed with Austrian supplier Andritz.
Sanding was supplied by Imeas of Italy with a six-head machine, while the cut-tosize line came from Anthon.  
The energy plant was supplied by GTS Energy of Shanghai.
The Baoshan factory has its own locally- supplied resin making plant, as do most panel factories in China.
Baoshan expects to employ about 200 workers once the factory is up and running to capacity.
The main product for this line will be thin board of around 2mm, but Baoshan’s intention is not to just rely on the sale of raw board – it has plans to build a valueadding line, of some kind, to be purchased from a Chinese supplier.
“We are still researching this subject,” said Mr Jia. “We are looking for something new to produce which will add value to our production. I will be attending some international events to gain ideas for this.”
Whatever Mr Jia decides to produce in the added-value area, it is unlikely to be simply laminate flooring or melamine  faced panels as he feels there are already a lot of companies making those products.
“At the last Ligna, for example, I saw the technology for producing sandwich panels with thin MDF faces,” he said with interest. “For the future we must find a way to expand the market for MDF.
“We are also thinking about future growth in panel manufacture but it depends on the success of this factory. There is a huge market for MDF produced on a continuous press and that can help to protect the forest.”
For the immediate future, Baoshan intends to supply mainly the local market in Sichuan province because it is still ‘importing’ panel from other provinces and Mr Jia is convinced that there is a big demand to be filled: “This line will have a capacity of 220,000m3 and there are many furniture companies in this province – midsize companies – and they each need 50,000m3/year of thin board, so four or five such companies would already consume our planned production”.

Final assembly of a CPS press gearbox

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