Increasing demand for wood fibre insulation products, whether of the flexible or semirigid types, has been a notable feature of the drive towards sustainable building practice using natural materials in recent years.

Their use in the building envelope and in flooring underlays are popular due to being eco-friendly, breathable, having a low thermal conductivity and promoting good indoor air quality.

Production capacity has steadily grown over the years, with France, Germany and Poland taking the lead as producers. European Panel Federation (EPF) figures for 2019-2020 show European production of softboard contracted by 8.6% in 2019 due to capacity closures in Germany and Switzerland when Pavatex (at Cham) and Homanit (at Berga) closed lines.

Total output in 2019 was 4.7 million m3, with rigid softboard production accounting for 63% of the total output and flexible products the remaining portion.

However, several new additional capacity projects are being planned in Europe, so the general upward trajectory in capacity and production output is likely to rediscover its form in the next couple of years.

German wood fibre insulation board and I-joist producer Steico has purchased a land plot in Gromadka, in south-western Poland, with the aim to locate its new factory there.

Developed under an investment estimated to be worth between €60-70m, the facility will make wood fibre insulation boards. In the first phase of the project, Steico is aiming to launch two production lines.

Under the plan, construction work on the factory is to be initiated this year, and the plant is to be opened by the end of 2022.

According to the German manufacturer, the investment will contribute to Steico’s objective of significantly expanding its foothold in the global market for wood fibre insulation materials, and enable the business to be prepared for anticipated increases in the demand for such products.

Investment To Boost Production Capacities

Andreas Schulze, a spokesperson for Steico, told WBPI that the manufacturer was planning to create between 70 and 80 new jobs at the new facility in Gromadka.

“Our current plans foresee the installation of two production lines for wood fibre insulation materials: one for flexible wood fibre mats and one for stable wood fibre boards, in the dry process (LDF) technology. We are still in the planning process, so we have not made a final decision about the type of lines and their capacities,” said Mr Schulze.

Locating the investment in Gromadka, In Poland’s Lower Silesia(Dolnoslaskie) region, which borders with Germany, will significantly boost the facility’s logistics capacities. It will facilitate exports of its output to the German market, but also a number of other destinations across Europe, as indicated by the company spokesperson.

“The property is located about 70km east of Görlitz in Germany which makes it perfect for shipments to Germany, as well to all other western and eastern European markets. Usually, we calculate a shipment radius between 1,000 and 1,500km depending on the value of the products,” said Mr Schulze.

The project was first officially announced in late 2020 when Steico said it paid around €1.2m for a land plot of some 16.5 hectares where it aimed to build a new manufacturing facility.

To further raise its production capacity for wood fibre insulating materials at this location, Steico acquired a property that is “part of a former airport that is currently being converted into an industrial estate,” but is also “characterised by plenty of available wood and qualified workers,” according to the group’s statement.

Under the plan, new plant machinery is to be supplemented with existing technology and equipment that Steico has acquired on several occasions in the past.

In addition to the pure production lines, the plans include the construction of the production halls, the wood yard, a biomass boiler, the defibration and drying facilities as well as the construction of storage buildings and other infrastructure, according to the producer.

Asked whether Steico was perceiving an increased demand in the region for some of the products that will be made at the Gromadka facility, the spokesperson confirmed that some of its product categories are reporting increasing sales.

“We are seeing a dynamically increasing demand for wood fibre insulation materials, especially for flexible mats and lightweight stable boards,” said Mr Schulze. “While flexible mats are used for cavity insulation, for example between rafters, stable boards are used for building shells, for example façades.”

Steico’s new investment will further increase the company’s foothold in the Polish market where the company already operates two plants.

These include the facility in Czarnków, in the country’s western part, and the factory in Czarna Woda, in Poland’s northern region of Pomerania.

The last years have brought a number of investments at both plants, which allowed Steico to gradually expand its Polish production capacities.

In July 2015, Steico launched an LVL production line in Czarna Woda, creating about 170 jobs. The facility was fitted with a floorspace of about 25,000m2, and enabled to produce up to 100,000m3 of LVL per year.

Two years later, the German business opened a second production line at the plant, located on a floorspace of some 20,000m2. The project raised Steico’s total investment in Czarna Woda to about €100m.

In Czarnków, the manufacturer makes fibreboard and wood fibre insulation boards, among others. Since Steico became the plant’s minority shareholder in 1998, some of the key expansions came in 2004, when the firm opened its third production line for manufacturing wood fibre insulation boards at the factory, and in 2007, when two production lines for hemp insulating materials and I-joists were put into operation at the Polish plant, according to data from Steico. Since 2005, the company has served as the plant’s sole owner.

Most recently, a major development project in Czarnków was completed in early 2019 when Steico opened a second production line to increase its LDF production capacity there. The project raised the plant’s output from 5,500 to 8,000 tonnes of boards per month.

Further investments at the Pomeranian plant were carried out in 2020 when the company opened a third line to produce prefabricated components.

Sales On The Rise

Meanwhile, the latest available financial figures from the company indicate the coronavirus pandemic has not hampered Steico’s growth.

In 2020, the German business reported sales of some €308.8m, its record result to date, and an increase of 9.9% compared with a year earlier when it posted sales of €281m.

Steico also managed to improve its earnings before deducting interest and taxes (EBIT) which went up by 2.4% to €33m year-on- year, according to the manufacturer’s preliminary financial data for 2020.

The positive trend Steico observed last year was the most amplified in the fourth quarter of 2020, which was the most successful three-month period in the company’s history.

With revenues of some €65.7m between October and December 2020, the fourth quarter of last year represented a 24.2% increase compared with the same quarter a year earlier.

The EBIT result for the fourth quarter of 2020 represented a robust increase of 55.6% year-on-year, totalling some €8.8m, as shown by figures from the firm.

While Steico admitted that last year was marked by a number of “operational challenges as a result of the Covid-19 crisis,” it also said that it has a positive outlook for this year.

The company’s management is continuing to be very positive about 2021.

“Increased ecological awareness as well as national and European programmes that combine climate protection with economic promotion should lead to an increase in demand for ecological insulation materials and a further strengthening of the timber construction market,” Steico said in a statement accompanying the release of the latest annual figures.

Readying to open the new Polish plant next year, the group says its ongoing efforts to raise “its capacity reserves mean that … [Steico] is excellently positioned to continue its growth” in 2021.

“Unless there are additional negative effects from developments in the pandemic, the Board of Directors believes that in 2021 revenues will lift by more than 10% with an EBIT ratio of 11% to 12% (in terms of total operating revenue),” according to the manufacture.