"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.

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