The health of particleboard markets has taken a sharp turn in the wrong direction this year, as multiple factors weigh on consumer sentiment.
European particleboard producers are cutting production in the face of falling demand, with the furniture sector in particular seeing a worrisome reverse since June. The construction sector is also being talked down for 2023 in many European countries.
The combination of high general inflation, the energy cost crisis and the Ukraine war have had an impact on buying patterns, getting progressively worse into the autumn.
It’s likely we will see a reduced annual European particleboard production volume in 2022 to mitigate the weaker environment.
This Particleboard Part One report deals primarily with industry capacity, both new investments and reductions, focusing on Europe and North America, with the main survey listings featuring mills’ installed capacity as at the end of December 2021.
New plants that came on line during 2022 will be added to the main listing tables next year, while plants in Asia and the rest of the world will be covered in our Part 2 survey in the following issue.
There are updates on several new investment projects, as new mills are the result of multi-year planning and don’t usually get shelved because of short-term market movements. Producers will certainly be hoping the current poor market does not go beyond the short-term.
Mill investment in Russia is of course an exception, as European panel technology providers have not been allowed to export equipment to the country following the start of the Ukraine war due to current EU sanctions, though there is a possible route for Chinese suppliers to do so.
Our estimation of installed capacity for the EU27 + the UK as at the end of December 2021 was 39,818,000m3, while non-EU capacity was 18,654,000m3. North American capacity was down slightly to 9,211,000m3, giving a Europe and North America capacity of 67,683,000m3, slightly up on 2020. Some additional capacity is being added in 2022 and at least two new particleboard lines are expected to go online in western Europe in 2023, with a further couple on the drawing board. So the capacity is on track for further improvement.
EU 27 + UK
Wood-based panel production levels in Europe were strong in 2021, with board manufacturers producing very healthy financial results. Production of all panels, according to the European Panel Federation (EPF) was up 10% in 2021, offsetting a 2% drop in the pandemic-impacted 2020. Particleboard production grew by 12% in 2021 to 34 million m3, with Germany staying as Europe’s largest producer with an 18% share of production.
Particleboard product prices showed strong growth since Q1, 2021 until mid-2022. Over the longer period from Q3, 2019 to 2022 the price hike was estimated at 120%. During the recent EPF/Fraunhofer WKI European Wood-based panels Symposium, consultant Afry predicted that wood-based panels demand would dip 10% in 2022 and further decline in 2023, before returning to 2019 levels in 2024/25.
It predicts particleboard consumption will fall by 3.9 million m3 in 2022 and by 3.5 million m3 in 2023.
So against this dynamic market background and now weaker demand landscape, what is the new mill investment cycle like?
Several western European particleboard investment plans were already being planned long before the latest market turn. It is leading global player Kronospan that has the most current activity, with involvement in three particleboard projects in the region.
We start with the company’s Sanem plant in Luxembourg, where a new particleboard investment has long been planned.
The company currently operates MDF and OSB production on the site. The particleboard investment was designed as the second phase of site investment, the other phase being a new continuous OSB line.
We understand the plant is currently being built and that technology suppliers have been in the process of making deliveries, with a projected 2023 completion date. We understand it is a big project, with as much as 3,000m3 per day output.
This will make Sanem a very large woodbased panels hub for Kronospan.
Kronospan recently announced it was also investing in Spain, by committing €400m in Tortosa. The company says its plan represents one of the largest foreign investments ever recorded in the area and will lead to the creation of more than 185 direct jobs and around 1,500 other indirect positions.
The new plant will incorporate a continuous particleboard press capable of producing 2,000m3 daily, or 720,000 m3/year.
The new factory will work with up to 100% recycled wood sourced from discarded end-of-life domestic furniture collected by Kronospan’s suppliers.
Infrastructure construction had already started in February 2022 and we understand that several suppliers have already delivered machinery to the site, with a projected start date in 2023.
Two other notable projects in western Europe are both in Italy, one of which is being explored by Kronospan at its Kronospan Italia laminating site in San Vito al Tagliamento.
This in the north-east of Italy, a region which has the largest concentration of manufacturers of furniture and furnishing accessories, with some very important industrial districts such as Mobile di Livenza and Quartiere del Piave (Treviso, Pordenone). The leading Sicam exhibition is held in nearby Pordenone.
The plan was first released by Kronospan at the end of 2020 and there have been several subsequent consultation meetings, with some of the detail focusing on plant emissions and traffic impact, as a group of concerned local citizens are opposing the move on environmental grounds.
In publicly available documents published on the local government website, annual capacity of the plant would be 612,500m3 (1,750m3 daily), corresponding to 400,000 tonnes. It would be constructed on Kronospan Italia’s land in San Vito al Tagliamento, adjacent to its current production facility.
The facility would be served with recycled wood feedstock and also operate power co-generation facilities – both biomass and natural gas.
Originally, the mill was planned for 2023, but we await more information on its progress.
The other significant project has been Saviola Group’s plans for a very large new particleboard plant at its Viadana site near Parma. We mentioned this in last year’s survey report.
At that time, Saviola had already obtained quotations from machinery suppliers in 2021 and had been seeking permissions.
The development in question is understood to involve a 60m-long press and design capacity could be up to 1 million m3.
We continue to list this under our future capacity table and await a progress report on the project.
Saviola is a pioneer in the use of recycled wood.
NON EU27
Outside of the EU27, Turkey continues to be a big investor in wood-based panels production.
We have added Kastamonu Entegre’s particleboard line at Samsun to the main listing, following its start-up in 2021.
The mill includes a Siempelkamp Generation 9 ContiRoll in the 7ft x 37.1m format, designed for a daily output of approximately 2,000m3, corresponding to about 600,000m3 per year. It replaced an existing multi-opening press.
Kastamonu also placed an order this year for a similar sized project for its location at Kastamonu City.
The new plant – from Siempelkamp – is also a 7ft x 37.1m line with daily output of 2,000m3.
At the plant in Kastamonu City, Kastamonu has already been operating an MDF and HDF plant since 2007. The new particleboard plant at this location helps Kastamonu expand its range of boards for the domestic furniture industry.
The project represents the 10th time that Siempelkamp is to supply a continuous press to Kastamonu. The previous order was an MDF plant ordered in November 2021, for the Balikesir site.
A further new particleboard plant in our future capacity list is Küpeliler Endustri, which is installing a Siempelkamp ContiRoll in the format 7ft x 23.8m, extendable to 28.8m. Annual production is estimated at about 230,000m3.
This new investment replaces a single- Level line at the Eskisehir site, been in production for 40 years. The particleboard division was established and continuously expanded back in the 1980s under the company name Suntasan, part of the Küpeliler Group since 2006. The order includes the delivery of a Büttner drum dryer type 5,0 x 24 R with a flash tube pre-dryer.
Moving up to Ukraine, production of wood-based panels has been disrupted in the country by the conflict there, with several mills having had to stop production for a while. Most have since restarted.
The latest new mill project there was finished before the conflict started – at Rivne in the west of the country. Kronospan has built a significant 850,000m3 capacity plant there, with the first board having been produced in November, 2021. This has now been added to the main listing.
Photos of the plant, the first board produced, tours of the facility and the warehouse stacked with particleboard have been shared by Kronospan Rivne staff online.
The machinery had earlier been transferred from Kronospan’s Bischweier site in Germany, which had closed many years before.
Neighbouring Russia had been a focal point for new wood-based panels investment, until the breakout of the war in Ukraine. As mentioned earlier, investment in new wood-based panels capacity in Russia has hit problems, with European technology suppliers now having withdrawn their services following EU sanctions. Some European panels producers have also taking action to exit their Russian operations.
Egger’s plan for a replacement particleboard facility at its Shuya site had been advancing until the war broke out but understandably this is now on hold. The existing facility has an annual production of about 250,000m3. The big project is thought to have been planned for completion in 2024.
Likewise, Uvadrev-Holding, has had plans for a second particleboard line at Uva with a 500,000m3 capacity.
Russian wood-based panels manufacturer Uvadrev-Holding placed an order with Siempelkamp in 2021 for the line, featuring a Generation 9 ContiRoll in the format 9ft x 32.1m. Board sizes of 1,830mm x 2,750mm and 2,070mm x 2,800mm were planned.
The gluing system planned was designed to meet the stricter limit for the emission of formaldehyde from wood-based materials, the E05 standard; dry urea is used in the middle layer to reduce formaldehyde levels.
We will keep this project in the future capacity list, but a resolution of the Ukraine war would seem to be needed and sanctions lifted before this and other projects get re-activated with western European plant suppliers.
One project in Russia that has been progressing is that of Kronospan’s Kaluga operation.
Chinese plant supplier Yalian Machinery Co Ltd is undertaking the project, which is to have a very large capacity, possibly up to 1 million m3 (with a daily capacity of 3,100m3).
The line is part of much wider investment on the site and we would expect to add this to the main listing next year.
Kronospan already commissioned a fibreboard plant there in 2021 with annual capacity of 600,000m3. Other investments in the region were also being looked at by Kronospan, though it is unclear whether the war in Ukraine will have a bearing on these.
NORTH AMERICA
The North America region has been quite active in particleboard investment in the past few years. Examples include Arauco’s huge 800,000m3 plant in Grayling, Michigan – a Dieffenbacher installation – and Egger’s mill at Lexington, North Carolina, the latter of which is a Siempelkamp project with 600,000m3 annual capacity.
Of course, some older and less efficient mills and lines have disappeared as well. Dieffenbacher is to supply a new CEBRO smart particleboard plant to the Canadian wood-based panel producer Uniboard Canada for the latter’s third phase of its modernisation project in Val-d’Or, Quebec.
The project is the latest to deploy Dieffenbacher’s CEBRO smart plant concept introduced in 2021. CEBRO is designed to combine digitalisation and advanced plant engineering with operational excellence and sustainability solutions.
When Uniboard’s final phase is completed in 2025, capacity at the modernised plant will increase by almost 50% versus the multi-opening particleboard line whose main components were supplied by Dieffenbacher in 1988. Existing plant capacity is 363,000m3, so there will be around an additional 180,000m3 capacity added.
The Uniboard contract includes a 10ft x 35m long CPS+ continuous press, two EVOjet P glue-saving systems, the new Forming Station PB and new Wireless STS storage system.
Uniboard will also use the MyDIEFFENBACHER digital service platform and Dieffenbacher’s smart digitalisation solution EVORIS to better understand and control its new plant.
“It will significantly improve board quality and expand our range of board formats and thicknesses, allowing us to enter the market for thin panels, a biocomposite in high demand in North America,” said Uniboard chief executive officer and president James Hogg.
Uniboard employs more than 800 people at its sites in Sayabec, Val-d’Or and Mont- Laurier.
There are still many older plants working in North America, so it is not beyond the realms of possibility that more investment plans will be announced in the next few years.
Meanwhile, Roseburg’s Missoula Composites plant has continued its long process of site investment into 2022 with the installation of new technology.
The 200-acre site in western Montana produces particleboard and thermally fused laminate (TFL) panels and was acquired by Roseburg in 2003.
Starting in 2014, Missoula began upgrading its forming, classifying, screening, and pollution control systems to transform the site into a modern legacy plant.
The team has continued this transformation into 2022 with two new shelving lines, a CNC/drilling line, and continued advancements in sawing and innovative robotics.
These equipment investments make it possible for Roseburg to produce shelving, counter tops, stair tread, door core, and a wide variety of panels that are used in the production of cabinetry, furniture, bookshelves, and ready-to-assemble storage and closet systems.
