Following on from MDF Part 1, our survey of the industry in Europe and North America, we now focus on the existing MDF mills in the ‘Rest of the World’ as at end-2012 and on those under construction, or planned, for 2013 and beyond.
Our survey of Europe and North America showed very little activity, and virtually no growth, in western Europe or in North America, but some growth in eastern Europe and Turkey. For 2013, we showed a growth of 2,490,000m3, or 11.7% and for 2014 and beyond, a further 1,654,000m3, or plus 6.9%.
We also reported increased activity in the US housing market and the hope that that will filter through to increased MDF activity in time.
By contrast, for the Rest of the World, we show an increase of 4,584,000m3 to 65,309,000m3, or ca7.5% over end-2012 (60,725,000m3); and a further 1,810,000m3, or 2.8%, for 2013 and beyond over 2013.
From that table, it can be seen that the increase in 2013 is accounted for by Brazil, China, South Africa, Thailand and Vietnam and for 2013 and beyond by Brazil alone.
It should however be borne in mind that, with the difficulty in obtaining totally accurate information on the Chinese capacity, including all the small mills, we have had to make some informed assumptions for that country. As reported in the 2010 survey (of 2009), we were advised of an additional 10.4 million m3 of mills which we had not previously recorded. As the source was reliable, we have continued to include an extra 10.4 million m3 of capacity in our figure for China.
Accurately verifiable information on Chinese capacity is always welcome.
Developments in China
Activity in the Chinese MDF industry has decreased, as expected, as the government tries to rein in the country’s dramatic economic growth of recent years, to curb its housing boom and to control inflation. The export of furniture has also become more challenging in light of the global economic problems.
However, we can still report 3,115,000m3 of new capacity for production in 2013, barring slippage in any of the start-up dates (again, see ‘Summary of new capacity’ table).
It also has to be borne in mind that part of the slow-down in MDF capacity growth in China results from perceived over-capacity, which is itself threatening the MDF market.
This has led to increased interest in particleboard production, with several projects taking place in the last couple of years. This has happened before, with new particleboard capacity being built but ultimately failing to find a market. However, this time, there appears to be a genuine increased demand from the furniture industry (mostly export-oriented manufacturers) for particleboard and the particleboard manufacturers should be able to find a market for their production. Our particleboard survey will, as usual, be published in two parts, as for MDF, in issues 5 and 6, 2013 of WBPI.
Our thanks go to Shanghai Wood Based Panel Machinery Co (SWPM/Dieffenbacher) for information received which means we have been able to add a number of multi-opening and continuous MDF press lines in China, and elsewhere, to our main listing for end-2012; and to our future capacity list.
We have also, as last year, listed the 13 SWPM continuous lines for production in 2013 and beyond in a separate table, after the ‘Summary of new capacity’ table.
In his economic analysis of China, Bernard Fuller of CFPA stated that: "Assuming that China’s economy is indeed in full recovery mode by the second half of 2013 as modest stimulus spending, further growth in domestic consumption, and some recovery in export markets all gather momentum, then growth in China’s GDP is forecast to re-accelerate in both 2013 and 2014, albeit not reaching rates as rapid as in the recent past.
"Similarly, while growth rates were still positive in key wood products end-use markets, such as construction and furniture, they were among the slowest in a decade. For 2013-14, the forecast calls for GDP growth to again climb above 8% and to approach 9%, while furniture production jumps 11-16% per year as consumer spending climbs further."
Developments in South America
In Brazil, 2013 should see two new lines come on-stream for a total of 750,000m3 (Arauco and Fibraplac).
For 2013 and beyond, assuming all the projects go ahead as planned in the declining economic environment in South America, a total of 1,810,000m3 of extra capacity is planned. Of that total, Duratex accounts for 1,200,000m3 in two mills. One of those mills is due to start production in September 2013 in Itapetininga, with a capacity of around 380,000m3/year, while the timing/location of the other was still to be advised as we went to press – and whether it will be MDF or MDP. Other new planned capacity is from Placas do Brasil, which plans 180,000m3 at Pinheiros, and Floraplac 430,000m3 at Paragominas. As stated last year, Duratex and Placas do Brasil are currently expected to start up in 2015.
The new capacity in Brazil (Berneck) and Colombia (Tablemac), shown in last year’s Summary of new capacity table has been incorporated into the main listings for 2012.
Developments in SE Asia
The South East Asia region has seen two important mill start-ups in 2012.
The first was in Vietnam and was built by VRG Dongwha, which is a joint venture between Vietnam Rubber Group, which already owned a small multi-opening Dieffenbacher MDF line at Quang Tri on the east coast, and experienced panel maker, South Korean-headquartered Dongwha. The 300,000m3/year Siempelkamp ContiRoll continuous line went into commercial production in February 2012.
That capacity makes it the biggest such line in the Asian region.
The second major line in the region was built by experienced particleboard manufacturer Panel Plus, which already had two particleboard lines at its factory in Hat Yai in southern Thailand.
The company added a Siempelkamp ContiRoll line for MDF, which went into commercial production in early April 2012, with a capacity of 330,000m3/year.
Both these lines have been included in the listings for 2012 as they were in production for most of that year.
Meanwhile, Thai furniture manufacturer Kijchai, in Rayong, has also built a new MDF line. That line started commercial production in November 2012, with final acceptance in February 2013, and is thus shown in the new capacity table for 2013.
Designed capacity of this Dieffenbacher CPS continuous line was 230,000m3/year, but when WBPI visited the factory in April of this year, the company reported that it was running at closer to 300,000m3/year.
On the same WBPI trip to Thailand, Chatchai Piyasombatkul of Metro-Ply said that the company definitely planned to add further MDF capacity, although a date for that had not yet been decided.
World Summary
The table opposite, showing aggregate world capacity, lists the capacities in the various regions of the world from 2011 to ‘Beyond 2013’. Some of this capacity is not anticipated to come onstream until 2015, including the Duratex and Placas do Brasil lines, assuming they are not further delayed by the declining economic situation in South America.
Capacity for Australia and New Zealand continues to be static and this has been the case for some time now.
China has of course shown continuous growth for some years but we are not aware of any major projects beyond 2013 as we go to press. However, there are a number of projects which should have been running by now according to machinery makers’ reference lists, but which still appear to have no set start-up dates. These of course may come to fruition in due course, but they are mainly multi-opening, rather than continuous, lines.
As we have seen, South East Asia showed growth from 2011 to 2013 after a few years of virtually no growth in any panel’s capacity.
North East Asia still shows no signs of new capacity development, as far as we are aware.
South America has already been discussed.
That just leaves our ‘Rest of World, other’ category which, in this case, refers only to South Africa, where two mills are to be added for a total of 314,000m3.
As previously stated, western Europe and North America are at best stagnant, with the growth in Europe coming only from the eastern region.
Our final aggregate total for global MDF capacity at the end of 2012 is 86,875,000m3 and it looks set to reach 93,949,000m3 by the end of 2013.
At the end of 2012, the total Rest of the World possessed 60,725,000m3 or ca70% of global MDF capacity (2011, 69%).
