The turbulent history of the former STA wood processing complex on its one square kilometre site in Hat Yai has been well-documented in WBPI over the last 10 years. Our most recent reports (issue 1, 2005, p42), described how MP Particleboard of Thailand and Evergreen Fibreboard of Malaysia formed a joint venture to save a major part of that original multi-wood-product project by taking on the two particleboard and two MDF production lines and beginning to restore them.
Now we are able to report that the particleboard lines are running successfully under the Panel Plus name (see page 24), while the two MDF lines are on target to jointly produce 320,000m3/year of panels under the name of Siam Fibreboard (part of the Evergreen Group). The first thing we noticed on arriving at Siam Fibreboard’s factory was the new office block under construction to replace the original temporary offices. But the investment made by Evergreen in its new venture by no means ends there. When Siam Fibreboard first took on the operations in 2004, MDF line 1 was capable of running, although in need of a lot of tender loving care, while line 2 required a total rebuild. That reconstruction was completed in March 2005. Meanwhile, line 1 had also received a lot of investment and today the two lines are both running at around 450-500m3/day, giving a total annual production of some 320,000m3, depending on thickness. The two lines are identical, being equipped with Siempelkamp generation Vl ContiRoll continuous presses, each 8ft wide and 20.6m long. Currently, chief executive Mr JC Kuo said he is producing thinner board on line 2 and thicker panels on line 1. The thinnest board produced to date is 4.75mm – at a speed of 650mm/sec. Although the two lines are running successfully, there are still improvements to be made, particularly in heat generation. “The original energy plant was from IMW but we couldn’t burn dust in that and we changed over to a Maxxtec plant and added a Körting dust burner,” said Mr Kuo. Further work remains to be done as part of some grander plans which this entrepreneur has for the site. A new debarker has also been installed. To improve panel quality, new Imal mat scanners have been installed on both MDF lines with blow detection and density profile measurement, while Firefly fire detection/extinguishing systems have also been fitted. The original layout of the factory had the two MDF lines in adjacent buildings with an open area in between. This area has now been roofed over to provide storage space, which will be required when Mr Kuo’s latest plans come to fruition. “We had always planned to build a third line here and this will be installed alongside line 2,” he said. The entire covered area is now vast and Mr Kuo claimed that in fact one could park two A380 airliners inside the factory! “To purchase, restore and upgrade these two lines has cost us about the same as buying line 3 new,” said Mr Kuo ruefully. “But that is just us – not all companies could have done it so cheaply!” From past experience, Mr Kuo and his team lack nothing in resourcefulness – for instance sourcing obsolete electronic components for the continuous presses on the internet saved a great deal of money. The staff also encompass enough experience to carry out a lot of work for themselves. The cost of the planned new line is estimated at MYR120m (US$33.6m), depending on currency movements. Plans for that third line have not progressed quite as fast as this energetic executive would have liked due to delays in obtaining a licence from the Thailand Board of Investment. “There were delays in issuing the licence due to bureaucracy and stringent conditions on funding in order to get Pioneer Status, but we have the funds available – we are healthy enough as a company but it still takes time to convince the authorities,” said Mr Kuo, who successfully floated the Evergreen group on the Malaysian stock exchange in March 2005, with the Kuo family retaining 48% of the business. Approval for line 3 finally came at the end of May last year, although there are still some “local issues” to overcome, said Mr Kuo, who already has the machinery supply for the new line sorted out. “We signed a memorandum of understanding with Dieffenbacher for all the equipment from forming to finishing some time ago and had planned to have delivery on site last year but we now hope to confirm the order before mid-2007,” he said. In the meantime, work has started on the chipping, debarking and the installation of the cut-to-size system. The latter will be a secondhand Anthon angular plant formerly used by Pfleiderer of Germany. An eight-head Steinemann sander for line 3 was purchased from panel maker SEP of Italy when it closed down. The sander had only been in use for a year. “The new line will have a number of special features on it, including several safety features because it will be running at very high speeds. It will be a fast, thin board line and we are aiming at 1,500-2,000mm/sec for 1.8mm board,” said Mr Kuo. “You wouldn’t want to drive a Ferrari without brakes or air bags; we must be able to stop the line quickly in an emergency and we will have a special mat overlap detection system and a Dieffensor [glue lump/foreign body detector], to protect the press belts.” Andritz will supply the 54/60in refiner. Mr Kuo has ordered a GTS Energy plant for line 3 and that deal also involves sorting out some problems with his recently upgraded system for the existing lines. “We still have to resolve the electrical power supply issues for the third line and this has caused some delay as well, but we will have a new sub-station in mid-2008. A new water treatment plant – a copy of the existing one – is also under preparation and will be ready by March 2007,” said Mr Kuo. Siam Fibreboard is only one part of what is a rapidly-growing group of companies known as the Evergreen Group. The business, started by Mr Kuo’s father as a small veneer slicing concern in Singapore in the early 1970s, now has many facets: Evergreen Fibreboard in Johor state, Malaysia has two MDF lines – one with a calender press and the other with a Dieffenbacher continuous press. Allgreen Timber Products in Segamat has a Bison press-equipped particleboard line and there is a knock-down furniture manufacturing division covering 30 acres on six sites in Johor, close to the MDF lines. In December 2006, Evergreen completed the purchase of Takeuchi MDF, also in Johor, from the Merbok group. This factory has a 6ft-wide Mende-type calender line and a 4ft-wide, 17m long, Küsters press line. Including this acquisition, the Evergreen group can now boast a total panel production capacity of around 700,000m3/year. “We treat the whole group’s production as one, under one sales and marketing arm,” said Mr Kuo. “The lighter-coloured board is produced by Siam Fibreboard using rubberwood, while Takeuchi uses tropical wood which produces a darker board with good swelling characteristics. Takeuchi production is also made to E0 and Super E0, four star (F****) grades, popular with the Japanese market, and that is a new beginning for us. “Takeuchi offers good synergies and we [the group] are short of thin board, especially until line 3 is running. Tropical hardwood [furnish] is new to our product range and will introduce us to new markets. “The company also has a contracted supply of wood chips so we will not be competing with our existing wood supply, so Takeuchi is complementary for us in every way and is completely ready to run. We will also keep all the staff. We are buying the land, buildings, machinery, spares and wood raw material contracts.” The only thing that will change, it seems, is the company name as the former Takeuchi will be integrated into the Evergreen Fibreboard Johor Bahru division. The balance of the Merbok business was sold to DongWha, which also owns the former Golden Hope Fibreboard MDF mill. Coming back to Hat Yai, Mr Kuo also informed me that he has purchased a further 18 rai (about 29,000m2) of land from the bankers of the former STA Group. Why he would not say, except to state mysteriously “We have plans for that land”. I have known JC Kuo for some years and have never known a time when he did not “have plans”. I am sure they will be realised in the not-too-distant future.
