End-users of wood based panels have become increasingly demanding. To meet that demand, the panels supplied must be ever-more sophisticated. This is the challenge that Masisa decided to face in recent years. Innovation has therefore become one of the strategic pillars of the company. With creativity and teamwork its products boast a growing brand differentiation in a market that has become increasingly competitive.

Masisa’s main products are MDF, particleboard (MDP and PB) and melamine panels and veneers. It also offers complementary products like sawn timber and mouldings. In all, the added value in panels plays a key role in connecting with customers. Processes that allow product development to match the latest national and international trends, respecting the environment and sustainable development, are key to this.

Here Masisa has had to understand the evolution of design trends. To develop its market in Latin America and to maintain its leadership in Chile and the region it has opted for a sophisticated product mix – so much so that the company annually renews its portfolio with the intention of making 20% of sales come from launches of the past three years.

The company has found it important to be at the forefront in certifications such as FSC, in technology, and in attributes such as the anti-microbial compound which it pioneeringly introduced in all its melamine boards. E1 formaldehyde emission standards and similar requirements become more relevant to customers with each day that passes.

Growth in Mexico

The company currently has 10 industrial complexes distributed in Chile, Argentina, Brazil, Venezuela and Mexico; commercial offices in Colombia, Peru and Ecuador; and pine and eucalyptus plantations in Chile, Argentina, Brazil and Venezuela.

The launch of its new MDF plant in Durango, Mexico, marked a milestone for the company. With an investment of US$123m, the company expects incremental EBITDA to reach US$27m in 2018. Masisa has been operating in Mexico for several years and this investment expands the mix of products manufactured locally.

The added capacity from the new plant will supply not only domestic consumption in Mexico, but will even allow exports to the United States.

Currently, Mexico has great potential for growth as well as having an underdeveloped market in housing. Panels and other wood products have low penetration in the industry and are increasingly replacing the use of plywood and solid construction for furniture and for interior architectural wood.

The new Durango plant is most innovative in its supply of fibre. It operates with forest waste from other sectors: the over-runs from sawmilling, and all the material that has been abandoned in forests after exploitation in previous years. This up-to-now wasted material includes branches, small logs and bark.

All these wastes are gathered and received in one of five specially set up collection centres. The company’s preliminary estimate suggests that waste collection will employ about 500 people when it is in full operation, and that it will supply 25% of all raw material required by the Durango plant. The rest will come from agricultural cooperatives and sawmills in the area.

In parallel, the company is working to develop a market for future forest products. Masisa currently has a 40% share in the panel market in Mexico. Its aim is to further develop this market, especially in higher value-added products such as melamine and other board coatings. To do this, it will intensify its work with furniture makers and teachers through platforms like its Red M loyalty programme, which now has over 70,000 members in Latin America.

Latin American Markets

While the market faces a decrease in some Latin American markets, others – Mexico and Peru in particular – show a different behaviour, growing at rates around 13% and 6%, respectively. It is considered that Argentina will begin to grow in early 2017, based on indicators such as constructuion permits; this will positively impact Masisa’s operations there. Similarly, the company sees a turnaround in Brazil and expects the market there soon to resume growth.

Masisa Lab

As part of the innovation process, in 2012 the company created its first innovation centre, Masisa Lab. This is a space conceived as a 'laboratory', where projects are incubated and products and services validated to create value and give sustainability to the business.

Masisa Lab provides entrepreneurs with opportunities of working, networking, training and financing through the philosophy of doing, experiencing and co-creating ideas and useful solutions for the end user. The space serves to channel projects collaboratively in a multidisciplinary environment. Here Masisa has managed to connect in a deeper way with the world of design and architecture; it is developing linkage projects that have led to innovative ideas for Latin American industry.

To date, at its labs in Santiago (Chile) and Mexico City, the company has supported about 30 projects, each aiming at high standards and scalability in their markets. The plan is to build a network of labs in Latin America: other labs open already are in Sao Paulo, Concepcion and Buenos Aires.

Masisa Lab, as well as other initiatives, are responses to a strategic necessity: innovation. It is needed to accelerate growth, reduce barriers to consumption, create added value and improve profitability; to expand the customer base, develop competitive advantages, and stimulate new consumption. This is the formula that Masisa is implementing to continue developing its market and maintain its position of leadership.