The ownership may have changed and with it the acronym for the company, but Shanghai Wood Based Panel Machinery Co Ltd, now known in short as SWPM, still claims the largest market share for MDF lines in China, as well as leadership in a number of other panel machinery sectors.
It came as a surprise to many in the industry when it was announced that the giant, family-owned, Austrian-headquartered, Kronospan panel making company had enlarged its empire by taking a 70% stake in Shanghai Wood Based Panel Machinery. The contract was signed between SWBPMC and Peter Kaindl of Kronospan on October 1, 2004, but took effect on January 1 this year.
 “The business is still the same, it is just that the majority shareholder has changed,said vice managing director Zhang Guoxian. “Before, the company was 100% owned by Shanghai Electrical Corporation Group, SEC, which is the third largest company in Shanghai after the Bao Steel Corporation and the Automobile Corporation (which has joint ventures with VW Audi and General Motors).
The SEC group had two main lines of business in the wood panel sector: SWBPMC and Green Continent. The latter company was not part of the deal with Kronospan and continues to own and operate at least five MDF factories in China.
Kronospan has adopted SWPM as the acronym for the company rather than the more cumbersome former name of SWBPMC. The other major change since it took a majority holding has been to axe 400 out of the 900 jobs at the Shanghai factory.
“Peter Kaindl saw an increasing involvement of European companies in the Chinese panel industry and this acquisition was part of his strategy for the future,said Mr Zhang. “We are very happy with this cooperation.We were like a small boat and Kronospan was the aircraft carrier.We needed a strong partner and Kronospan has already made a big investment in buying a majority stake and will continue to invest in this company.”
 The new board of directors has five members. Two are from the former SWBPMC – Mr Wang Jinxing who continues as managing director and Mr Zhang – and three come from Kronospan.
The company had a good year in 2004, selling more than 20 MDF lines in China, employing its multi-opening presses. It also sold one of these MDF lines to Pakistan.
By March this year, the company had already signed five new multi-opening MDF line contracts in China and one for India. It had also signed one contract for a singleopening particleboard line in China.
Another five projects were under discussion at the time and this does not include SWPM’s involvement in other sectors of the panel industry.
Its short-cycle press lines continue to generate good business, as do its multi-opening lines producing high pressure laminate (HPL). “We sold many short-cycle lines last year, including some exports to India, Pakistan and elsewhere,said Mr Zhang.
The company sold an HPL line to Formica in Shanghai and one to another Formica division, Siam PSM in Thailand, both in 2004.
Presses for the manufacture of rubber belts and printed circuit boards complement SWPM’s activities in press line manufacture.
The company makes smaller refiners for MDF fibre production, up to a maximum of 42in diameter, but larger refiners are purchased from Andritz of Austria or Pallmann of Germany.
Chippers are generally supplied by Chinese company Sufoma, which also competes to some degree on MDF lines, but only the smaller ones.
“For lines of 80,000m3-plus, we have a 100% market share in China and we are very experienced in multi-opening press lines,said Mr Zhang. The company was founded in 1958.
While single-opening presses for particleboard are also supplied to the Chinese market, the demand in recent years has been strongly in favour of MDF and Mr Zhang does not see this changing any time soon.
“I do not see a big growth in particleboard production. Most customers in China prefer MDF. The consumption of MDF in the country is high because of new apartments being built and this will continue, with demand for HDF for laminate flooring also increasing.”
The government is not allowing the building of any new wet-process hardboard lines in the country for reasons of pollution by process effluent and the plywood industry is not in good shape, said the vice managing director. “We have had no orders for plywood press lines in the past two years.”
There is much talk of a wood raw material shortage for MDF in China, but Mr Zhang does not see any reason for concern.
“The raw material price is increasing but supply is generally no problem. The big MDF producers have plantations, particularly in the east in Jiangsu Province and in the southwest in Guangdong. Most plantations in China are of poplar, eucalyptus and pine species.”
Where SWPM does have a problem, in common with all heavy manufacturing industry in China – as elsewhere in the world – is in sourcing steel, where he admits the price is rising very steeply and supply is difficult.
For some years now, Shanghai Wood Based Panel Machinery Co Ltd has been working on the production of a continuous press for MDF production and a couple of years ago there was talk of imminent manufacture. However, Mr Zhang made it clear that the first SWPM continuous press was not likely to appear for some time yet.
“There are many technical and manufacturing problems to solve and it will be some time in the future when we may produce a continuous press.We have to design a completely new machine and this will require major investment in new machine tools, if the patent and design issues are resolved.”
The 40,000m2 factory in Anting, a city on the outskirts of Shanghai famous for its massive automotive manufacturing plants, boasts a wide range of machinery and is where the majority of components for SWPM’s machines are made. The latest addition is a large Chinese-made milling machine for use in the production of hot press platens. There is also a new workshop housing the company’s CNC machines.
All lines are assembled and tested at Anting before shipment to the customer.
So it is ‘business as usual’ at SWPM following Kronospan’s investment; the order books are healthy and the company is optimistic about the future, both for MDF and for its own share in that growing market.