Novopan plans growth

In the last seven years, Quito-based Novopan del Ecuador built and launched a 20,000m2 MDP plant with a 140,000m3/year continuous press line. It has expanded this line in two stages, investing around US$60m, to reach a 300,000m3/year capacity.

By the end of 2013, Novopan expects to complete the second expansion stage with the installation of an additional 20 tonne per hour Recalor drum drier and a further forming extension to the line's Dieffenbacher ClassiFormer. This will take its capacity up from 220,000m3, to a competitive 300,000m3/year.

Capitalising on Ecuador's ideal wood growing conditions and the firm's own productive forest resource, family-run Novopan has developed a remarkably pure board. Now it is harnessing some of the world's latest panel making techniques to enhance its product quality and output.

By this November, Novopan aims to install Imal's recently unveiled 'Dynasteam' fibre mat steam injection system in front of the Metso Contipress continuous press to raise the line's capacity. This is the first such system introduced in South America, and one of few installed to date, even in Europe, claims Novopan's executive president César Alvarez Villota.

"We introduced this [technology] because we want to be ahead of our competition," the chief executive told WBPI in July when we visited the Ecuadorian producer.

A further innovation is the planned integration of Dieffenbacher's new 'EVOjet P' gluing system, aimed specifically at particleboard production. Apart from achieving greater precision, this will help Novopan make considerable resin cost savings, it says.

While some industry commentators have their doubts about accepting MDP as a genuinely new product, rather than the result of a clever marketing creation, César Alvarez is utterly convinced of its value. He argues it is "an intermediate product between particleboard and MDF".

He argues that different technology and a different process are required to produce MDP, while, unlike particleboard, it is paintable and can be lacquered, as in the case of MDF. MDP is much cleaner, more workable and more tool friendly than particleboard, the president believes.

Novopan del Ecuador, founded in 1978, is part of the family-owned Pelikano group. Novopan used to run a small particleboard plant with a 40,000m3/year Pagnoni single opening press line in Guajalo on the edge of Ecuador's capital, Quito.

Then, in 2006, the company began construction of its new panel plant on a new 11ha hillside industrial site on a main highway at Itulcachi, east of Quito. The US$35m MDP plant, with its 140,000m3/year Metso Panelboard Contipress continuous press line, produced its first board in record time by March 2007 and the facility was formally inaugurated in 2008.

Novopan's new unit used plantation pine and eucalyptus wood raw material, along with recycled shavings, sawdust and sawmill and furniture plant waste.

Initially, the firm had a longer-term plan to expand its new MDP plant to over 200,000m3/year in 2015, but its board success in Ecuador and other Andean Region markets led it to bring forward an upgrade.

In 2010, it invested around US$25m to expand both the forming section and the press. The 13m long Contipress was extended to 17m and the forming unit spreading line was extended to add more rollers, taking the panel line capacity to 220,000m3/year. The press extension allowed for the planned extra capacity boost this year.

"This will be one of the most productive presses of 17 metres long to be capable of producing 1,000m3/day," commented Novopan's executive president. Other investments in 2011 included an increase in the plant's wood flaking capacity with the addition of a second Globus machine.

Novopan's success in the market rests to a large extent on its versatility to supply the customer with a broad range of finished panel products, with a selection of new colours, designs and textures. Today, it promises to deliver board in a range of 32 colours and six different textures, according to sales and marketing vice president César José Alvarez, son of the firm's president.

"We are able to produce all of these. That's where we differentiate ourselves from maybe some Brazilian or European producers who have a very big catalogue, but the products are not available," he explained.

To deliver on its promise, Novopan maintains a sizeable and comprehensive board finishing section at the plant and currently runs three Wemhöner laminating lines. Two of them are capable of 200 cycles/hour, handling different colours and finishes simultaneously, while the other line handles up to 100 cycles/hour and is dedicated to special products.

Its duties, apart from melamine laminating, include surfacing panels with finish foil or veneers for Novopan products, which include concrete shuttering and wood overlay panels. In 2011, the plant added a Fischer & Rückle veneer jointing line.

To enable the company to handle the extra demand for finishing generated by the latest MDP line expansion, Novopan is expecting the delivery of its fourth low pressure melamine laminating line early next year.

This 400 board/hour Siempelkamp press line is due to be installed in January 2014. It is a fully automated, double board line, which will turn out up to twice the product of Novopan's two bigger Wemhöner lines, according to César Alvarez Snr. One thing Novopan does not have in its finishing 'armoury' is an overlay paper impregnation line, now a favoured form of integration among panel makers in the region. The Ecuador firm remains dependent for now on outside suppliers of ready-treated papers. But it is considering another option. "We've been studying the impregnation business and we are looking for a partner who specialises in the impregnation area. We might make a joint venture with people specialising in resin production.

"It's a difficult business and we want to stick with our core business," explained the executive president.

The product portfolio of the Pelikano group is even bigger than just the MDP variations. It includes MDF, not yet produced by Novopan, but bought in from the Chilean producer Arauco and from Colombia's Tablemac. The group also offers a plywood range from its plywood subsidiaries.

In Ecuador, Novopan sells its products through a network of 40 Novocentro franchise stores offering, as well as panel supply, a variety of cutting, distribution and advisory services. A significant regional exporter, particularly to markets in Colombia and Peru, the company also has a subsidiary in Peru.

The Andean Region is important to Novopan, which claims to be the market leader in both Peru, with a 40% share, and Ecuador, with around 65%, as well as to be the chief importer of melamine faced board in Colombia.

Colombian official estimates show the Ecuadorian panel producer was indeed the biggest importer of MDP/particleboard, snatching a share of around 21% of the country's sizeable market in those panels. Although Novopan has barely completed its latest industrial project, it is already examining potential options for future expansion. It is always looking at new investment opportunities to complement its product portfolio - in Ecuador or abroad. High on its list of potential new projects, in a strategic plan for the next five years, is the construction of an MDF plant. "It all depends on the market and demand for the product," said César Alvarez Snr. "If we get into anything, it will be a modern plant with a continuous [press] line and the latest technology."

Such a plant would mirror Novopan's current facility, with a likely capacity of around 4-600m3/day, he suggested. The executive president did not rule out a possible future joint venture development.

"I think many people are interested in seeing how Novopan runs the business and would like to make a partnership or agreement for the future supply of this region," the executive told WBPI.

He revealed that Novopan has already received contact from interested parties abroad, though he would not 'name names' at this early stage. "We're leaders in the MDP market and we mean to stay there in the near future. But MDF could be an option," Mr Alvarez Snr said.

Average per capita consumption of MDP and particleboard in the Andean Region is still well below world averages, at just 7m3/1,000 head of population. This figure "could easily be doubled", said Mr Alvarez. And the regional average figure for MDF consumption is even lower, so there is certainly space in which to grow, he suggested.

The success of MDP production at Novopan has much to do with its work in the forestry area. Growing conditions in the highland region around Quito are generally good, thanks to a combination of climate, light, rainfall and soil type.

Novopan has expanded its own plantations - which are mainly of radiata pine and also some eucalyptus globulus - from around 2,000ha back at the end of the 1990s, to 7,000ha today. It grows trees to a height of between 2.8 and 3.5m and can achieve productivity of up to 400m3/ha. The firm consumes between 450 and 500ha/year in panel production.

Novopan has increased its reforestation rate over the years, planting around 1,000ha in 2012. Beyond that, it also draws raw material from third party landowners. Ecuador has an estimated 1.5m ha of land suitable for forestry and the prospects of major reforestation got a boost last year when the government introduced an incentive scheme to encourage new planting: Larger growers will get 75% of their plantation costs reimbursed, while smaller ones will receive 100% back,

encouraging new landowners to grow forest. "With this type of incentive, many people from outside the industry will be attracted to plant and we'll have a much larger forest supply base," forecast the Novopan president. The company is looking at using more eucalyptus and he believes that plantations on Ecuador's coastal plain could achieve productivity close to that achieved in Brazil.

Novopan admits it took a gamble when it embarked on its project to build a new MDP plant seven years ago. "We took a risk to grow four times our size in 2007. But we found ourselves with a product where even we were surprised at the quality. We discovered that innovating with products pays off and people want that," said César José Alvarez.

He admitted Novopan has learnt a lot through building and operating its new panel plant. The company is now preparing to grow still further in the next five years in its quest to deliver fashionable, innovative furniture to the consumer