Adding MDF

17 November 2014


Duraplay de Parral, an old-established Mexican panel producer with a name for customer service on both sides of the US border, has joined in the challenge to build Mexico’s first worldscale MDF plant, says Richard Higgs.

Duraplay is a family-owned plywood and particleboard maker, based in the arid northern frontier state of Chihuahua, and is behind one of three separate schemes to launch competing panel manufacturing lines of at least 200,000m3 per year in Mexico by 2016.
For Duraplay, it is a 'natural expansion' to add MDF to its already-extensive panel product range, according to the firm's chief executive, Emilio Ayub Touché.

The company is investing an initial US$80m to build a new state-of-the-art fibreboard line of 200,000m3 per year next year at its existing wood panel complex in the silver mining town of Hidalgo del Parral.

Like its two local MDF rivals, Masisa México and the forestry group Proteak, Duraplay has placed the contract with Dieffenbacher to supply its continuous press line.

Financing of Duraplay's project has been shouldered by its present shareholders, along with a number of outside sources. These include the Chihuahua state government, working with a Mexico City private equity fund, and the Mexican development bank Bancomext. Also involved is the Cologne-based German investment bank DEG.

The panel maker signed a contract with German engineering consultant Reinhard Kessing of Kescon Engineering to handle its project coordination and management.

The release of contract down-payments was scheduled for July 2014 and construction work was set to begin on site in August, Mr Kessing told WBPI when we visited Duraplay in June.

Duraplay has been clearing and preparing the plant site on a 145,000m2 plot of land, adjacent to its current facility that it bought last year. Production buildings are due to occupy a 15,500m 2 area.

"This line is absolutely state-of-the-art, with the latest technology. What many would consider options, or additions later on, we are already including," explained the project director.

Dieffenbacher is providing up to 70% of the plant and delivering much of the upstream equipment, apart from chipping equipment supplied by the US firm Bruks. Some line components are coming from China.

The energy plant is being supplied by Vyncke, while the line's refiner from Andritz is capable of handling wood with moisture content from 25% to over 100%, Mr Kessing said.

Other features of the MDF line include the sophisticated 'Dieffensor' mat scanning system, developed jointly by GreCon and Dieffenbacher, to ensure surface quality control in forming; and Dieffenbacher's PROJet resin saving resination system.

The initial project cost includes the plot of land on which the new mill is being built, as well as the construction of a new 40,000 tonne per year chemical plant for resin production.

The MDF project is a central plank of an ongoing programme to raise Duraplay's hard-earned profile and polish its image in the Mexican market in the face of ever-tightening competition. The company has grown, but needed to consolidate its distinctive position as the national industry has evolved.

In recent years, the wind of change in Mexico's board sector has wiped away the leading name of Rexcel and propelled regional giant Masisa, which acquired Rexcel, into the top slot.

Back in 2007, Masisa México and Duraplay were middle-ranking particleboard producers. Now, both players are part of the fibreboard revolution in Mexico where, in the face of substantial MDF imports, growth opportunities and market potential are now huge.

Like its rivals, Duraplay has long recognised the need for a world-scale fibreboard mill in response to growing consumption in Mexico, relying, as it does, almost entirely on imports. MDF domestic market growth has risen some 10% per year and consumption accelerated from around 300,000m3/year in 2007 to last year's figure of more than 500,000m3/year.

"MDF [for us] is just one of the final pieces of the jigsaw puzzle......these MDF projects will, of course, change the landscape of the Mexican market dramatically in the next couple of years," commented Duraplay's energetic commercial director, Ramón Castro.

Today, the 50-year-old former lumber company produces a broad portfolio of different plywood and particleboard products in a range of finishes aimed chiefly at medium-sized customers in a variety of niche markets.

Since the 2008 global recession, and with Mexico's plywood sector still shrinking, Duraplay was forced to downsize its labour intensive pine plywood operation by a third.

Overall, the firm has had to slim down its total workforce, which has been reduced by 140, from around 700 back in 2007.

Even so, plywood and veneer remain essential elements in the company's strategy, which is still focused on adding value to its product range. Duraplay serves traditional plywood markets with face grade board aimed particularly at small carpenters in the furniture industry, while other products go to the construction sector.

Duraplay's existing particleboard operation comprises a main 110,000m3/year single opening Bison press line, which turns out standard panels, and a 40,000m3/year Mende line producing 2.8-8mm thickness board. The lines include an Anthon cut-to-size section.

Pine for the particleboard plant, made up of sawmill waste including chips, slabs and sawdust, is trucked up to 250km to Parral from mills across southern Chihuahua state and part of the neighbouring state of Durango. The panel maker also uses waste biomass, including dried logs abandoned on the forest floor.

But bigger logs needed in the plywood operation are hauled up to 500km from other native ponderosa pine forests in the mountains of western Chihuahua.

Much of Duraplay's wood material is supplied originally by a large number of relatively small individual forestry operations still run by Mexico's traditional community based 'ejido' system. This landholding system is protected under the Mexican constitution and forest exploitation is tightly controlled by the government.

The existing mill also operates its own chemical plant at the complex, producing formaldehyde and resins.

The Parral complex is a sustainable and well integrated operation, with waste wood from the plywood unit recycled for use in particleboard production. Sawdust is also used, with other biomass fuel, for the energy system's boilers.

To enable it properly to meet growing demand in Mexico and, latterly, once again in the US, the Mexican panel maker has maintained a significant panel finishing section at the Parral plant.

This year, Duraplay installed a third Wemhöner low-pressure melamine line, with a five million m2/year capacity, and it retains an older Bürkle finish foil unit, as well as veneer facing facilities.

"We try to service the market with all these products, but we are a unique source for our customers and MDF was missing from the portfolio," the Duraplay CEO told WBPI.

The firm is boosting the finishing area to handle the expected MDF mill output, alongside its regular products. In fact, it is already finishing MDF panels which it imports, chiefly from the US, Canada and Brazil, as it primes the domestic market prior to launching its new line.

In recent months, Duraplay has been upgrading and fine-tuning its particleboard operation in readiness for the arrival of MDF.

A number of changes were made to the particleboard lines, including the 2013 addition of Pal srl equipment to control the flow of chips into the Bison line drum dryer.

The firm recently constructed an extra 3,000m2 warehouse designed to accommodate the growing complex's additional production output.

Press modifications and process adjustments on the Bison line earlier this year were aimed at improving product quality by controlling parameters of the process on the panel mat. In addition, Duraplay was due to add two new calibration heads to its Steinemann sanding line, with all remedial work due to be complete by August 2014, according to Mr Castro.

"We have older equipment, so that's why we've been investing in upgrading much of it," he explained.

Emilio Ayub is under no illusion as to how tough the MDF business in Mexico will become once the three new mills are up and running.

He believed the plants, eventually due to add almost 700,000m3/year of capacity to the market, would start producing panels within just six months of one another.

The CEO was adamant that Duraplay would stick to its initial 200,000m3/year capacity, as the Mexican market would not sustain a bigger plant now. Current demand should support at least two such mills, but three projects was a surprise, he admitted. "I'm not sure three [MDF plants] is the smartest number, but that's what we'll have, apparently," Mr Ayub, a former president of the Mexican panel makers' body ANAFATA, told WBPI in June.

Economic access to wood resources remains all-important in Mexico and in the short term, the addition of bigger-capacity MDF mills of around 500,000m3/year are just not viable, he stressed. But Mr Ayub believes that an area the size of the state of Chihuahua could sustain a second, smaller, fibreboard plant.

With hardly any national MDF production to date, Mexico has certainly been out of step with other Latin American states such as Brazil, Chile and Argentina, where furniture manufacturers rely mainly on MDF and particleboard.

This stems from Mexican furniture manufacturers' traditional dependence on solid wood and plywood, as well as the country's longstanding lack of sufficient wood resources.

However, rising imports of MDF have led to market growth in Mexico prompting new investment in national projects to launch fibreboard plants in the country.

Meanwhile, modest industrial tree plantation initiatives, along with limited change in the tight regulations governing forest exploitation in Mexico, have helped marginally to ease the dire shortage of suitable wood fibre.

Duraplay, for its part, expects to make use of smaller diameter trees, not currently being harvested in the pine forests, as its main source of raw material for the new Parral MDF mill. It plans to utilise logs from 7.5 - 15cm in diameter, which were not cut down because there was no commercial market for them, according to the firm's chief executive.

Looking back over the fraught years of the recession, Emilio Ayub believes that Duraplay's decision to focus on providing value-added solutions to panel customers in the Mexican market helped it to survive the financial crisis.

In the face of a deepening slump in the US market, the firm abandoned plans to grow downstream in the ready-to-assemble (RTA) flatpack furniture business, eventually selling off its fledgling border RTA business in Ciudad Juarez to a customer: the Canadian company, South Shore Industries.

"We decided to concentrate on our core business - wood panels - as that was not the right time to invest a lot of money and effort in a totally new area," explained Mr Ayub. With US furniture and panel markets plunging, his firm turned to the growing panel market in Mexico.

"The basics of our [added value] strategy fortunately worked. At Duraplay, we went through the crisis OK, financially," he recalled with evident satisfaction.

When it comes to looking ahead, Mr Ayub clearly reflects a fresh confidence in the future of Duraplay and the growth of Mexico's panel manufacturing industry. After a decade of struggle through times of uncertainty and global recession, his company is now a leader in a new national sector revolution.

Preparing for the new MDF mill with a new 3,000m2 production warehouse
Duraplay's Mende thin board line
Duraplay's plywood operation at Parral
Duraplay will use small diameter pine logs for its new MDF line at Parral