When Green River Panels (Thailand) Co Ltd produces its first particleboard panel in Songkhla province in the third quarter of this year, it will also be producing the first panel product the Green River Wood and Lumber group has ever made. Established over 18 years ago, this Taiwanese company is headquartered in Port Klang in Malaysia. It specialises in the production of furniture in the mid-to higher-price range, with its main manufacturing bases in Malaysia, Vietnam and China.

It also has some sawmilling facilities in Malaysia and Thailand but these are not core to its business. “We did not feel that we could produce furniture economically here in Thailand, but we decided instead to invest in making panels to produce semi-finished products and utilise the wood resource here,” said Hubert Hsieh, who is responsible for the particleboard mill project. That resource is rubberwood and in spite of recent difficulties with the rising price and falling availability of this wood, Mr Hsieh sees a good supply being available into the future. “The higher latex price has led to less wood supply as rotation periods are extended, but in the long-term, plantation areas are increasing and this province has increased its plantation area by 3% in the last two years so I believe wood supply will be good,” he said. Green River bought the green-field site at Bangklum near Hat Yai in 2001 and built a new sawmill from scratch. The mill produces around 10,000m3 a month of rubberwood products, which Mr Hsieh said is a reasonable size mill for Thailand. The logs come from a 60km radius. At present, the residues from that sawmill go to the local latex factories to be used as fuel for heating the dryers, in place of fuel oil. There are also another five sawmills within that radius, owned and run by the group. “We made the final decision to build a particleboard mill at the end of 2005 after visiting the Ligna exhibition in Germany in May 2005 and then conducting a careful study of the feasibility,” said Mr Hsieh. The company went for particleboard rather than MDF because the raw material produced by the sawmill would be more suited to particleboard and the company would be able to utilise the logs more completely. “In 2005 we prepared the finance and obtained quotations from Siempelkamp, Dieffenbacher and Metso Panelboard, making the decision to go with Dieffenbacher in February 2006. The contract was signed in May of that year for the line from forming to the star cooler. The target capacity of the mill is 500m3/day, or about 150,000m3/year, and while all suppliers for the main components of the line had been decided at the time of our visit in early December 2006, the handling system to be employed after the press was still under consideration. An angular saw system will also be selected at a later date but space has been allocated in the factory plans, as it has for a short-cycle press line to be bought at some time in the future. The chipper contract has been placed with a Chinese supplier, while flaking is to be supplied by Maier of Germany, screening is to utilise Pal Superscreens and the dryer will be supplied by B├╝ttner. Gluing will be by Imal. The target market is the group’s own furniture factories, as well as other furniture makers in China and Vietnam, with the majority of production being exported. In spite of the considerable particleboard capacity coming to the market from Thailand and Malaysia recently, Mr Hsieh is confident that his factory will find markets for its production. “We will be a smaller-capacity mill and so more flexible than some of the competition who have much larger capacities and so less flexibility,” he said. “We will produce to customer demand for niche markets as well as supplying our own factories. “The design of the press we have chosen will give us a lot of flexibility in sizes for different markets. We are not going to try and compete with the big-capacity lines.” The intention is to produce E2 and E1 grades – mainly E1 – and to go for E0 once the line is established, thus giving the potential to export panels to Japan. It is envisaged that E2 will only be produced during ramp-up of the production. The factory site totals 250,000m2, of which 200,000m2 is allocated to the particleboard factory buildings. Groundwork on the site commenced in October 2006 – just a few weeks before our visit – and the assembly of the main building, using pre-fabricated frames from China, was due to commence in December and to be completed by early February this year. The dryer was already on its way and expected before the year-end, while the Dieffenbacher machinery was expected to arrive at the site by end-February. The green end and energy plant were expected to be delivered in January, with the latter coming from a Chinese supplier called Union Boiler. The energy plant will serve both the sawmill and the particleboard line. Commenting on the choice of location for the operation, Mr Hsieh pointed to the general lack of investment in the area. “There is not much foreign investment here and the Board of Investment of Thailand was very cooperative about this project, considering it a ‘show project’, and there were tax advantages for hundred percent foreign-owned companies investing here,” he said. “In the last two or three years there has been almost no investment in this area due to the political situation and we will be creating 250 new jobs in the particleboard mill. “And we are not going to try and poach [from other panel mills] the 50 or so skilled staff that we will need – we will train them from the beginning. We prefer to train our own people and have already employed the electricians we will need as well as having our own experienced engineer and a number of experienced Chinese engineering staff.” The company also has the services of Herbert Hermann Karl Fahlbusch as project manager. This man has considerable experience of the industry, having worked for one of the German complete line suppliers for several years. Mr Hsieh is a civil engineer by training but has worked in the sawmilling industry for six years and was responsible for establishing the sawmill on this site. The site is located in a second-generation rubberwood plantation area and the company intends to apply for Forest Stewardship Council (FSC) approval for its products. The location is also alongside the main ‘Asia Highway’, which runs from Malaysia in the south to Bangkok in the north, while Songkhla port is only 50km away. So everything seems to be in place for this new producer to join the South East Asian panel market later this year.