Ukrainian panels sector surprise30 March 2023
It seems incredible that wood-based panels factories can operate successfully in a war zone, but that is exactly what is happening in the west of the Ukraine for Swiss Krono’s two facilities there.
Current production rates at the mills are estimated at 80- 90% by Swiss Krono CEO Martin Brettenthaler, whom WBPI interviewed for this issue.
This brings a new meaning to the word resilience for the wood-based panels sector. Of course, Ukraine is a big country and the western region is not currently seeing the same level of conflict as the east, but challenges are still real, not least energy supply, which has been impacted in the whole of Ukraine.
Domestic demand for furniture in the country using MFC has been holding up, which is encouraging.
From a wider European perspective, it is interesting to hear Mr Brettenthaler’s comments on the situation. Six months previously, delegates at the European Wood-Based Panels Symposium in Hamburg had heard some dire predictions on the collapse of furniture industry demand.
While the traditional MDF and particleboard business aimed at the furniture market has clearly been challenging, demand has reportedly been more resilient than expected and “surprisingly stable”.
The OSB market is facing challenges from a stuttering housing market, with high interest rates an unhelpful background factor. News from the likes of large German housing contractor Vonovia recently deciding not to commence new construction projects in 2023 is surely a key marker and one wonders how kitchen cabinet production and sales will fare as the year progresses.
The other key worry last summer was the fear that energy shortages may force mills to shutter up. While high energy prices has forced a rethink in mill operational policies, there have been no blackouts as such.
Elsewhere in this issue we see from an EPLF update that the laminate flooring sector has taken a hit, with key European markets seeing steep falls in 2022. Total European laminate flooring sales dipped by 24% for the year as the consumer home interiors boom ended.
The EPL did however express some optimism that the situation would be short-term.
We also have an update on the wood fibre insulation board market – a growth area over recent years. Several projects to extend capacity in Europe are ongoing, including those at Steico, Gutex, Soprema and Schilliger Holz, while TimberHP in the US is gearing up for a phased market launch of its products. European Panel Federation statistics for 2022 will be released in June and it will be interesting to see the figures. In 2021 the ‘softboard’ sector’s production grew by 12.6%.