As WBPI compiled this report, the coronavirus pandemic was spreading across the world and inevitably hitting the rate of industrial production of wood panels.

There was already evidence of some producers curtailing production to mirror reduced demand in global markets. In this new uncertain landscape with countries’ economies taking a negative turn due to the restrictions being put in place, many producers’ annual sales targets and their plans for future non-critical capital investment are surely being revised. This comes after a difficult second half in 2019 in many markets.

In such circumstances forecasts of production rates and start dates for new/ future capital investment programmes are fraught with difficulty, particularly as it is difficult to predict how long the coronavirus pandemic will last.

Global OSB giant Norbord has announced reduced shifts and alternate production schedules at its North American mills to reduce operating capacity by 25% and said its European mills – including OSB plants in Belgium and Scotland – were prepared for similar action. Norbord was also deferring noncritical capital projects and further reducing its 2020 capital expenditures budget by 25%.

"These are extraordinary times and difficult decisions, but they reflect the uncertainties facing businesses around the globe," he said. Norbord President & CEO Peter Wijnbergen.

We were aware of other OSB mills in Europe considering pausing or reducing production to meet the twin challenge of reduced demand and ensuring safe working practices.

In specific regard to the OSB sector – the focus of this report is on Europe, Asia and South America following on from Rich and Dick Baldwin’s North America OSB update starting on page 12.

At the end of 2019, global production capacity was around 34 million m3 and all- Europe capacity 9.5 million m3. Our figure for the total Rest of the World capacity was 12.2 million m3.

Russia is still at the epicentre in terms of OSB capacity growth plans, with numerous projects in the planning stage, though it is not clear when all these will go ahead, with some still requiring funding. There are also new projects in China, Chile and an increase in capacity in the UK.

In its annual report for 2018/19, the European Panel Federation (EPF) published its statistics relating to OSB production of its members.

Its forecast for Europe (European EPF member countries) was an OSB production capacity or the full year 2019 of 7.19 million m3 – an expected growth of 315,000m3 on 2018 (6.875 million m3) or 3%.

If accurate, this increase represents a steady increase, with the total back in 2016 being 6.5 million m3. During this four-year period, countries increasing OSB capacity include the Czech Republic, Luxembourg, Poland and the UK (2019: 540,000m3 est capacity).

Of course, production capacity levels do not necessarily translate to the same actual annual production rates due to market factors. In 2018, EPF says its members' European OSB production declined by 1.6% on 2018 to nearly 6.2 million m3, due to force majeure at some European plants.

Germany and Romania continue to have the largest European OSB production capacities. Following an expansion in 2017, Poland now completes the Top 3 of OSB production countries in the EU, measured by capacity, followed by Czech Republic, Ireland and Latvia.

Exports from EPF member countries to the Far East – the main destination of OSB exports – reduced by 19% in 2018. Exports to the Middle East, Africa and America also declined, though Oceania shipments increased albeit in small numbers.

Total shipments to outside Europe declined by 21% for the year, with Switzerland (197,000 m3) and Turkey (140,000m3) leading the way. Russia and Belarus were the largest OSB suppliers to Europe in 2018 largely due to increases in their production capacity and weak currencies relative to the Euro.

OSB3 structural boards represented 87% of European OSB output in 2018 and 11% was OSB2 and 2% OSB4 (see pg 28 for more on this product). The building industry customer sector accounted for 77% of 2018 production – used for sub-flooring, roofing and load-bearing walls and ceilings. The remainder was sold into packaging, flooring, furniture and DIY sectors.


Turning to individual European countries, the UK ramped up its OSB production capacity in 2019 to 540,000m3, thanks to the second phase of investment at the Norbord mill in Inverness. A second wood room and dryer is being added and investments are expected to be completed by the second half of 2020. In its annual results, Norbord said it was expecting to ship more OSB in 2020 and was targeting further substitution of plywood with OSB.

Increasing demand for timber frame housing which uses OSB3 as sheathing boards, as well as plywood substitution is driving demand for the product in the UK.

It might not be too long before the UK gets a second OSB manufacturer, with Kronospan having been granted planning permission for an OSB plant at its Chirk facility during 2019.

Talk of an OSB plant at Chirk has circulated for several years.

The long-awaited planning permission was applied for in the summer of 2018 but put on hold in early 2019 by the local council, which sought assurances relating to the impact on road traffic.

Kronospan then launched a successful appeal with the Welsh government, with the Planning Appeals Commission subsequently backing the scheme on the basis that Kronospan is committed to increasing the use of rail freight to transport raw materials to the Chirk site, which is already served by its own rail sidings.

The company said a new 50m continuous OSB line will be part of its £200m investment programme in the Chirk facility. Capacity is expected to be around 600,000m3 per year.

WBPI understands Kronospan was still waiting for an environmental permit to allow the OSB line to be installed, so a date for startup is unclear at this time.

Meanwhile, a fall in OSB output and prices were recorded in OSB powerhouse Germany during the second half of 2019, reflecting testing market conditions across Europe. Egger was one of the producers reporting a decline in OSB sales for its half year ended on October 2, 2019.

The EPF reported a 15% fall in German OSB production in 2018 due to production issues at some of the plants. German OSB production capacity at 1.27 million m3 remains the highest in Europe.

But there was still some OSB plant activity in Germany – Swiss Krono confirmed to WBPI that its current plant optimisation at Heiligengrabe will increase capacity to 600,000m3.

This includes extra capacity for the MagnumBoard market – a product comprised of laminated OSB4 sections for the structural market (see page 28). The investment work is expected to be completed in 2021.


While investment activity in Western Europe has been limited, a number of projects are in the offing in Eastern Europe.

In the Czech Republic, Kronospan’s Jihlava plant, which celebrated its 25th anniversary in February this year, has been through an investment project, with capacity extended in 2019 to 670,000m3.

In Poland, Kronospan is implementing two further investment projects with a total value of over PLN300m at its Strzelce Opolskie operation in the KSEZ, in the country's south-western region of Silesia (Slaskie).

Of that, Kronospan is allocating over PLN185m for the purpose of increasing the efificiency of the OSB plant to increase product availability. There is no confirmation yet on completion date for this project. Kronospan secured funds last year for building an OSB plant at its existing particleboard production site in Novovolynsk in NW Ukraine.

The European Bank for Reconstruction and Development approved a loan of up to €116m, of which €75m is for the OSB plant with an annual capacity of 280,000m3 utilising a multi-opening press.

We are unsure when this project will be completed so it is marked for ‘future capacity’ for now.

The additional OSB is designed to meet the growing demand for OSB products in Ukraine and in the export markets.

Russia of course has a big and growing focus on OSB as it seeks to grow domestic production, reduce imports and service demand within Russia.

WBPI’s Russia correspondent Eugene Gerden reported earlier this year that OSB remains probably the most promising segment of the Russian wood-based panels market in terms of its potential for further growth.

According to preliminary data, published by Rosstat and the Russian Ministry of Industry and Trade, the production of OSB in the country in 2019 amounted to about 1.35 million m3.

That was slightly lower than the volume of consumption of 1.4 million m3 for the same year.

The present total installed capacity of OSB in Russia is estimated at close to 2 million m3. Planned total implementation of some major investment projects in the industry (which is scheduled for the next several years), could result in an increase of these figures by at least an additional 1 million m3, but timelines for the plants are hard to confirm.

The EPF quoted Russian OSB exports as increasing by 141% in 2018, with a further 9.2% growth predicted in 2019.

Main plant supplier Dieffenbacher reported last December that Swiss Krono had ordered a complete OSB mill for its Sharya site in Russia. The order includes a 65 m-long CPS+ press with an expected design capacity of 600,000m3. Realisation of the project is estimated in 2021-22. A plant for CJSC in Murom will feature a Siempelkamp ContiRoll Generation 9, with a length of 30.4m and a production width of 8.5ft. The 300,000m3 capacity plant was due to start production in the spring of 2020.

Other Russian OSB projects on the drawing board include SibayPlitProm’s RU21bn 570,000m3 capacity pant at a former sawmill site the Baymak district of Bashkortostan; MLT’s plans for a second OSB line at its existing OSB plant in Torzhok to provide a further 300,000m3 capacity; the Stroymontazh Technologiya Group’s plans for a 250,000m3 capacity OSB plant in the Tara district of Omsk; and Yugra-Plit’s plans for a 200,000m3 plant in Sovetsky.


Hot off the press, literally, is the startup of Vanachai’s landmark OSB plant at Surat/ Thani, Thailand in March this year.

The 210,000m3 per year capacity mill features a Siempelkamp ContiRoll with dimensions of 4' x 48.7m.

Billed as the first OSB plant in SE Asia, the plant featuresthe first industrial use of rubberwood in the production of OSB boards.

"With the new plant we are setting ourselves ambitious goals for the woodbased panel production of the future. Our boards are produced highly efficiently and according to strict sustainability criteria, and our plants are state-of-the-art,” said Wanthana Jaroennawarat, chairman of the Executive Board at Vanachai.

China is seeing steadily more activity in the OSB arena. Installation work is due to get underway now at Jiangsu Hui Dian New Materials Co LTD’s new plant in Shuyang, Jingsu, with a Siempelkamp 8.5’ x 38.8m ContiRoll 8th generation press. This 300,000m3 annual capacity plant will be able to produce so-called fine surfaced OSB featuring particleboard surface layers.

Dieffenbacher has also reported interest in fine surface OSB plants – its customer Wanhua Ecoboard is due to start up a new plant in Lankao City, Henan Province in 2020, while it will supply another Chinese customer one of the largest complete plants in the world for the production of Fine Surface OSB, including a 65-meter-long CPS+.

The EPF’s own stats for China suggesy Chinese production of OSB in 2019 was forecast to increase to 800,000 m3 in 2019 (+6.7%).

Last, but not least, there is a further OSB plant in Chile to report.

Initially reported in Chliean news outlets in early 2019, new company Chile Panel SA succeeded in obtaining environmental permits.

During a visit by the local mayor to the site in La Union, the plant was said to be ready to start operating from May of that year, according to the businessman behind the venture Gabriel Ruíz Tagle.

The operation, located at former MDF plant Polincay, was subsequently reported by industry newsletter EUWID to have a capacity of 150,000m3.

It represents the third OSB line in Chile – LP Chile has two lines, the most recent of which was added in 2018 with a production capacity of 265,000m3.