We have charted the story of a massive panel production complex in Hat Yai, southern Thailand, for about the last 11 years – most of which have been turbulent. However, as we reported in WBPI issues 1, 2005 and 1, 2007, recent years have seen a revival of a large part of the site under two new owners. Just to recap briefly, that original complex was conceived by STA in the mid-1990s but soon ran into severe financial difficulties. In February 2004, MP Particleboard of Thailand and Evergreen Group of Malaysia jointly purchased a large part of the assets from the receivers of STA Group.

The two Siempelkamp ContiRoll continuous particleboard lines were taken on by MP, since renamed Panel Plus, while the two similarly equipped MDF lines were taken on by Evergreen Group under the new name of Siam Fibreboard. All four lines were in need of extensive refurbishment and upgrading after years of either little, or no, usage and are now running very successfully. The ceo of Evergreen Group, JC Kuo, having invested a lot of time and money in raising his two MDF lines to world-class performance, then set about planning the future for Siam Fibreboard. One of the first things he did was to order a third continuous MDF line to be constructed on 30 acres of additional land adjacent to his existing factory. The land was again purchased from the STA receivers. At the time of my visit in early December 2007, ground works were well under way and Mr Kuo was busy sourcing steel frame elements from wherever they could be had in a very tight world steel market. The new production line was on order, with Dieffenbacher being chosen for the supply of the 8ftx28m continuous press line. The contracts were signed with the supplier in April 2007 and the machinery is due on site in May 2008. “This will be the longest press we will have in the Group and will thus be versatile,” said Mr Kuo. “We will be able to produce thicknesses from less than 2.5mm to 30mm because of the versatility of this press.” Contracts were also signed in May 2007 with Andritz for the refiner and GTS for the energy plant. Mr Kuo admitted that the delivery times for the machinery had gone against him since his original planned start-up time, due to the general boom in the machinery market since that time. His intention is to start up the new line in the fourth quarter of 2008 and I have not known Mr Kuo’s many projects to run late up to now. Anticipated capacity is around 750m3/day or 270,000m3/year. “Maybe more,” said Mr Kuo intriguingly. Siam has also bought a short-cycle press secondhand from a Panel Plus facility in Bangkok. Mr Kuo intended to have that Wemhöner line in operation by about June this year. The investment in major machinery for the third line is in the order of RM120m (US$37m) and has been funded entirely by the existing two MDF lines at Hat Yai. The new office building, under construction at the time of my visit last year, was in full use and features an ingeniously-designed water garden in an unroofed space between the new office building and the factory itself. However, this new development, impressive as it is, is dwarfed by Siam’s latest construction – the buildings to house a new electricity generating plant. It was the need for this facility which led Mr Kuo to put back his planned start-up date for the third MDF line from end-2006, thus unfortunately incurring the further delays already mentioned. The massive generating plant was undergoing tests last December in preparation for full start-up in early 2008. With the original purchase of the two MDF lines came one electricity substation from the original STA set-up. This has been shared with Panel Plus since the two companies entered their joint venture, but Siam’s third MDF line would have taken demand right up to 100% capacity on that one substation – obviously not a viable situation. “So we decided to build our own generating plant,” said Mr Kuo. “We purchased it from a Chinese specialist manufacturer of such equipment almost as a turnkey contract, except for the buildings and their foundations.” The Siam site is adjacent to a river and the area has suffered from flooding in the past so the land is not ideal for heavy construction. For this reason, Siam had to sink over 700 piles up to 8-12m deep to ensure a safe basis for the plant. The land level also had to be raised before construction could begin as there is a significant fall towards the river. The main generator building housing the three turbines is almost 30m high. Electricity generation will be carried out by a biomass steam turbine using wood waste but also designed to take up to 50% coal as fuel. “We intend to use mainly wood as it is cheaper but we could import coal from Indonesia,” said Mr Kuo. “The capacity of the plant is sufficient for the two existing MDF lines, plus some spare capacity. However, we plan to expand the capacity in about a year’s time to supply the third line as well – this extra capacity has already been designed into the plant.” Siam has a team of experienced specialists from China to cover the development of the plant and has employed the services of Mr Lee Kwok Choy, formerly of Guthrie MDF of Malaysia, to oversee the project. Cooling water for the electricity plant is taken from the river where Siam has constructed a pump room on the river’s edge. This was considerably complicated by the fact that it had to be specially designed to cope with a 10m seasonal rise and fall in the river level. That water is then filtered in a special filtration plant and treated by reverse osmosis to supply the boilers and the cooling towers. These boilers will also supply steam to the MDF refiners and the flue gas from the generation plant will not go to waste either. The plant will produce 20 tonnes of clinker per day and options for utilising that in a profitable way on site were under consideration at the time of my visit. These included making building bricks but that had yet to be tested. Another major, though invisible, change at Hat Yai is the fact that Evergreen bought out Panel Plus’ shares in Siam Fibreboard Co Ltd in September 2007, thus ending the joint venture arrangement under which the two MDF and two particleboard lines were bought from the STA receivers. Meanwhile, the Evergreen group has not been idle back where it started, in Malaysia. A new resin plant at the Batu Pahat MDF factory will supply all resin types for panel making and lamination to group MDF lines in Batu Pahat and Johor Bahru, as well as to the Allgreen particleboard plant in Segamat. The resin plant has an annual capacity of 60,000 tonnes of formaldehyde and 8,000 tonnes per month of resins. It was designed by Cal Polymers and built by specialist sub-contractors, while Cal provided drawings, key components and an overseeing role for the construction. The plant is due in full production by May 2008 and represents an investment of around US$6.5-7.0m. Mr JC Kuo is something of a visionary in the SE Asia panel business and always seems to have further plans for expansion of panel capacity on top of his operations in Indonesia (see p27), Malaysia and Thailand, or for increasing the efficiency of his operations by projects such as the electricity plant. It is this kind of entrepreneurial activity that got him listed in a group of the top 200 companies in the Asia Pacific region in Forbes Asia magazine in 2007; he fully intends to be at the award ceremony in 2008 as well.