Woodfibre insulation board has been one of the rising stars of the wood products industries in recent years.
There are so many boxes it ticks – low carbon, sustainability, lightweight and energy-efficiency, for instance, making it a popular choice for use in housing throughout central Europe.
Whether it is roof sarking, underlay or insulation (for both timber frame construction and masonry/block building), the uses are multiple and the performance is of a high standard.
But even this popular and high performance product has been knocked with the more challenging economic times in the past three years. So, what is the health of the sector now?
A massive amount of investment has poured into the sector within Europe to increase production capacity and capitalise on the rising demand for ecological insulation methods and greener forms of construction. This has led to some speculation of overcapacity, particularly as demand has been hit by the construction slowdown.
Still, if you look at some of the figures from the leading manufacturers of woodfibre insulation products, their performance is stable and they must be positive for mid to long-term growth prospects.
Leading manufacturer Steico is a large producer of the material and has invested greatly in new production capacity in recent years. It recently published its unaudited business figures for 2025 (full audited results will be published in April 2026).
The statement says the company generated revenues of €382.9m and EBIT of €35.9m in 2025. This represented a slight increase in revenue from 2024 when Steico recorded revenues of €376.3m, and a very similar EBIT (2024: €36m). It’s fair to point out that a breakdown at ones of its production facilities last summer did hit sales in Q3, 2025.
The statement followed an earlier trading update in October 2025 when Steico reported solid earnings for the first nine months of 2025.
Steico believes the construction industry continues to stabilise and has forecasted better market conditions in 2026.
The best available European source for wood fibre insulation board production output and installed capacity is the European Panel Federation (EPF).
Its most recent statistics for the full year 2024 show EU27 + EFTA softboard production output totalled 5.3 million m3 in 2024, a 10% increase on 2023 but still 6% off its peak in 2021.
This follows contractions during 2022 and 2023 of 9% and 6.3% respectively. This reversal had been due largely to the energy crisis. 2021 was the top year when output reached 5.6 million m3, beating the previous high of 2018.
Rigid softboard products accounted for 61% of the 2024 output, with the remaining being the flexible product. Some 96% of sales went to the EU27, EFTA, Turkey and the Balkans.
New capacity in Germany contributed greatly to the rigid product capacity total rising from 4.4 million m3 in 2023 to 5.9 million m3 in 2024. The flexible product capacity notched up another 100,000m3 to 4.9 million m3 thanks to added capacity in France.
Germany remains the biggest producer of woodfibre insulation boards in Europe with a total installed capacity of 4.72 million m3, followed by Poland with 2.85 million m3 and France in third place with 2.1 million m3.
In terms of applications, building shells made up the lion’s share of woodfibre insulation end use – rigid product taking 36% of these applications and flexible products 30%. Other uses of flexible products made up 17% of the market and rigid underlays account for 12%.
Extra-EU imports of products increased by 21% in 2024, but were still only 57,000m3. Extra-EU exports rose by 8% to 367,000m3, with Switzerland the top destination, followed by the UK.
PLANT INVESTMENTS
With so much plant investment having taken place in recent years and the European construction market also seeing more difficult times, it’s reasonable to expect that the level of new capacity investment will reduce.
Still, there are several projects to update on, with the development of Schilliger Holz’s Lignatherm plant in Küssnacht am Rigi, Switzerland being one of the key developments. This plant, which was approaching full commissioning status as WBPI was going to press, effectively reestablishes woodfibre insulation production in Switzerland once more.
Schilliger already has three wood product manufacturing locations in Switzerland and France, serving primarily the construction and packaging industry in Switzerland, France, and Italy.
The new greenfield plant exclusively uses wood chips from local forests and Schilliger believes the product will significantly enhance its product range.
An interesting feature of the plant construction is the re-use of CLT panels which were originally supplied by Schilliger Holz for the floors of the beach volleyball courts and the media centre at the 2024 Summer Olympics in Paris.
A large proportion of these boards now feature at the Küssnacht am Rigi plant. Indeed, more than 8,000m2 of these panels can now be found as ceiling elements.
The most recent milestone of the Lignatherm plant project was the commissioning of its energy centre. The new energy centre ensures a reliable, efficient and future-oriented energy supply for the production of wood fibre insulation boards. It is designed to efficiently cover the plant’s energy requirements while meeting high requirements for operational reliability, availability and sustainability.
Start of production was expected in late spring.
Staying with Schilliger, its France operation has an interesting construction product – CLTHERM – that combines CLT structure and insulation in a single element. To achieve this, wood slats and wood fibre insulation boards are glued together sideways to form single-layer composite panels. CL-THERM panels are designed for static use as loadbearing walls in new buildings or extensions. They can also be used as self-supporting, insulated façade elements.
Meanwhile in Germany, another project which had been planned – a woodfibre insulation plant at Sonae Aracuo’s Meppen facility – is currently believed to be on the backburner. The background economic situation and the big increases in industry capacity in recent years are some of the factors in this project not progressing to schedule.
The project is aimed at expansion of the company’s Agepan woodfibre insulation system, representing a €100m investment, strengthening Agepan’s role in the growth of Sonae Arauco’s portfolio for construction. Dieffenbacher is the main production line supplier. The project in Emsland is aimed at production of flex insulation, pressureresistant wood fibre insulation boards, and blow-in insulation.
Of course, a key development linked to all this was the news last year that Gutex and Agepan launched a strategic co-operation seeing Gutex produce a selected range of insulation materials for Agepan, in order to strengthen the company’s portfolio.
Michael Betz, COO for North East Europe at Sonae Arauco said at the time that this co-operation fitted perfectly with its vision of creating wood-based timber construction solutions, saying it great potential for joint success in the future.
Gutex had built a second mill in 2023/2024 – a €100m project at Eschbach im Breisgau. The dry process plant operates in three shifts all year round and the drying plant has a production capacity of up to 4,800m3 per day.
So, with Sonae Arauco having the tie-up with Gutex, it remains to be seen what the timescale now looks like for the new Meppen investment, with perhaps demand in the European construction sector to be a key factor.
In the UK, plans are under way for the first UK wood fibre insulation material manufacturing plant in the country. MDF mouldings manufacturer W Howard in 2023 agreed a multi-year licence for the use of MDF Recovery’s MDF recycling technology to produce loose-fill wood fibre insulation in the UK and Ireland markets.
At Ligna 2025, machinery supplier PAL and W Howard told WBPI that the first industrial application of the MDF Recovery process was projected for “early 2026”. MDF Recovery has a global partnership with PAL, part of the Italian multi-national equipment manufacturer IMAL PAL, for the use of MDF Recovery’s technology in MDF manufacturing.
The new wood fibre insulation business is called W Howard Pillo and work is continuing on a new facility in Newtown, Powys. W Howard Pillo agreed terms with PAL include building a disaggregator for the recovery of high-quality fibres from waste MDF materials.
The disaggregator will be used to transform waste MDF into loose fill insulation, which will then be blown into panels used for offsite timber frame house construction at customers’ factories.
Moving to Finland, Fiberwood Ltd is continuing with its R&D. It established a new test production facility and R&D centre in Järvenpää in 2024 – completed in 2025. This is aimed at enabling the production of natural fibre boards that meet commercial requirements for customers’ pilot projects, such as test buildings.
The next phase of laboratory development was entrusted to Development Engineer Ainu Voipio, who began her role at the Järvenpää production facility in autumn 2025, working at the heart of product and process development.
The test line will operate at a scale comparable to a future full-scale factory line, serving as the foundation for Fiberwood’s internationally scalable production.
“The demo line is one of the cornerstones of our future,” said Jari Varjotie, Fiberwood’s Director of Production and Logistics.
“We will use it to manufacture full-size panels for our customers’ various pilot projects, such as test buildings.”
In France, Soprema, the French manufacturer of insulation materials, has expanded its production of the Pavatex brand in France. A Siempelkamp plant project at Chavelot, near the existing Golbey site produced its first board in 2025, with a production spectrum designed for approximately 55,000t of insulation boards per year – effectively doubling the Pavatex production capacity.
In summary, woodfibre insulation board products still have tremendous growth potential. The recent downturn in construction combined with higher installed industry capacity caused some temporary weakening of prospects. New capacity investment seems less likely in the immediate future while producers adapt to current demand levels, but there are signs that the market has stabilised and all eyes will be on the EPF’s AGM this summer to assess the 2025 production output statistics. A slight increase in production and sales seems the most likely outcome in 2026.
