Vina Eco Board Company Limited, which trades as ‘VECO’, is a new force in particleboard manufacture in Vietnam and started commercial production on the country’s first continuous-press line for that panel in May 2012.
The company is owned by Sumitomo Forestry Group. Forty percent of the equity in VECO is held by Tokyo-headquartered Sumitomo Forestry Co Ltd (SFC), 40% by Sumitomo Forestry (Singapore) Ltd, a subsidiary of SFC, and 20% by the International Finance Corporation (IFC), part of the World Bank Group.
Sumitomo Forestry already has two companies in the region – in Indonesia – producing particleboard. These are PT Rimba Particle Indonesia (RPI) in central Java (capacity 400m3/day) and PT Kutai Timber Indonesia (KTI) in eastern Java in Plobolinggo, with a similar output – so Sumitomo Forestry is no newcomer to the South East Asian region.
In Oceania, Sumitomo Forestry owns two MDF manufacturing companies: Nelson Pine Industries in New Zealand; and Alpine MDF Industries Pty Ltd in Australia, which have a total annual production capacity of 500,000m3 between them.
Meanwhile, the Indonesian and Vietnamese mills have a similar combined capacity in particleboard.
Of course Sumitomo Forestry also has forest products interests in Japan, where it was founded in the 17th century, starting with forestry management, going through to a wide variety of wood product manufacturing and housing, as well as forestry and forest products interests worldwide.
VECO’s 20ha site is situated in Phu An Thanh Industrial Park, a large area of land designated by the Vietnamese government for industrial development, which is about 60 minutes’ drive from Ho Chi Minh City (Saigon), the largest city in Vietnam. VECO currently utilises about 60% of its site for the particleboard line, so there is room for future expansion, should it decide to do so at some point in the future.
So why did Sumitomo Forestry choose Vietnam to build its particleboard line? "The country is developing and growing, so the potential domestic market is getting bigger and bigger," explained Soichiro Kitamura, general director of VECO. "While the price of particleboard is generally not so high, transportation costs are high and therefore we saw a possibility in this growing market.
"Also, there is a plentiful supply of wood raw material and glue and we received support from the local government." Furniture manufacturers are the biggest domestic market for VECO, with many Taiwanese-owned furniture makers having moved their production from south China to Vietnam to take advantage of the low labour costs, Mr Kitamura explained. They mostly export their furniture to the US.
The general director added that there are also some Japanese furniture companies established in Vietnam which export their products to Japan.
These two groups of customers form the largest share for VECO, but there are also Vietnamese-owned furniture makers and a healthy number of secondary processors, who add value to particleboard in the form of low-pressure melamine facing and also supply the furniture manufacturers.
VECO does not currently have valueadded processing. For the export market the unprocessed output of sanded particleboard from the Long An factory goes to South Korea, China, Indonesia, Singapore and so on. The factory does not currently have Japanese Industrial Standard (JIS) certification.
"More than 80% of Vietnam’s furniture manufacturers are located around Ho Chi Minh City," explained Mr Kitamura.
"While Vietnam has the biggest population, we see a potential market in all the neighbouring countries in this peninsula so that includes Myanmar, Laos, Cambodia, Thailand and South China and there are good highways linking this region," he continued. "Particleboard suppliers in Vietnam are importing board and the Japanese furniture manufacturers mainly import it from Thailand and Malaysia."
In market terms alone, it is obvious why Sumitomo Forestry decided to set up VECO. The other major consideration in establishing a panel factory is obviously the raw material necessary for production. "Our wood supply is close to the factory, as is the market," said Mr Kitamura. "We have a good supply of acacia, eucalyptus, various fruit trees, rubberwood and a local tree species, Melaleuca. About 30% maximum of the wood supply comes in the form of residues from sawmills and furniture manufacturers." The wood is all plantationgrown. On a positive environmental note for VECO, the factory is situated in the Mekong Delta, and beside an extensive river/canal network, so around 70% of its wood supply is delivered directly by barge to a dock on the factory site where it is unloaded by mobile cranes. Farmers within a radius of around 100km deliver their logs in this way.
"The Mekong Delta is located to the southwest of Ho Chi Minh, while to the northeast of the city is a rubberwood area with a lot of sawmills," said On Nakagawa, purchasing manager at VECO. "The Vietnamese government is trying to increase the area of rubberwood plantation from around 350,000ha to 550,000ha and has established a latex refinery there as that is considered by the government to be one of the country’s important industries."
Sumitomo Forestry could have decided to build an MDF line, rather than a particleboard one, but the company felt that the range of wood raw material available was more suitable for particleboard production, said the general director, and SFC’s global strategy in panel manufacturing is to increase its sales of particleboard in the Asian countries.
"Sumitomo Forestry headquarters’ research found that there was over-supply of MDF in the region and we already have 500,000m3 of MDF production in Oceania at a price which enables us to export it to Asia," said Masaaki Hori, deputy general manager of VECO.
Breaking new ground
The contract for the supply of the production line was signed with Dieffenbacher of Eppingen, Germany, in March 2010 and the ground-breaking ceremony took place in the August.
Dieffenbacher supplied the complete production line, with the exception of the sanding line and the cut-to-size plant.
Sumitomo Forestry has in the past purchased press lines from both the German press suppliers, Dieffenbacher and Siempelkamp, having a Siempelkamp ContiRoll at RPI and a Dieffenbacher singleopening press at KTI.
Machinery installation commenced in March 2011 and the first board was produced in December of that year, with commercial production in May 2012.
The Dieffenbacher CPS continuous press is 24.5m long and eight feet wide, with 16 frames, and the annual production capacity is around 250,000m3/year.
"There was already an existing resin factory about three hours’ drive from here, supplying formalin and resin to wood processors and panel makers," explained Mr Nakagawa. "It was owned by Dynea, but was bought by AICA of Japan last year."
The particleboard is produced in thicknesses of 6,9,12,15,18,25,30 and 35mm and in dimensions of 4 x 8, 4 x 6, 6 x 8ft, and others as required, and has an average density of 670kg/m3.
The production line
Technical manager Johannes Tamarua, a man with long experience in panel production, showed WBPI round the site and clearly demonstrated that he knows every inch of every part of the production process. The Dieffenbacher 30MW energy plant is totally fuelled by wood residues and supplies hot thermal oil for the press and hot gases for the dryer.
The partly-roofed log yard has five loaders feeding the chipping line with logs brought from the barges in the nearby dock by tipper trucks which pass over a weighbridge on the way. The different species of wood are kept separately in the log yard for use in the production of different types of particleboard, as part of VECO’s close attention to quality control.
The chipper is from Maier of Germany (part of the Dieffenbacher group) and has a 1400mm-diameter drum. It is rated at 44 tonnes per hour (tph). Only the Melaleuca is debarked on site, as it has a very flakey bark that some have likened to onion skin.
The chips from the Maier machine go to the chip silo and then to the Dieffenbacher screens, followed by the three Maier 60-knife ring flakers MRZ1400, each with a nine tph capacity.
VECO has its own workshop for saw and knife sharpening adjacent to the flaker hall. The flakes are conveyed to the wet flake silo before being dried in the single-pass, 25m-long, drum dryer.
The dry flakes are sorted by oscillating screens to dust, surface layer, core layer and over-size, with the latter being refined in one of two hammermills.
The VECO factory is protected by GreCon fire protection systems. The same company supplied the on-the-line quality control systems.
Inside the production hall, the CPS continuous press is totally enclosed by an alloy framed, clear plastic walled, enclosure to contain the fumes, which are evacuated from the top by an extraction system. The press frames utilise multi-pots to give improved control of the cross-profile of the particleboard to further guarantee the quality of VECO’s production.
As you would expect from such an experienced panel maker, there is a wellequipped laboratory to check the internal bond, density profile and formaldehyde content of the particleboard produced. "We check all properties of the board every three hours to ensure that our quality is as good as it can be," said Mr Kitamura. "This is very important to us."
Master panels from the press are 8 x 16ft or 8 x 14ft and are centre-cut to two 4ft widths after the star cooler.
Sanding is carried out by a Steinemann eight-head machine enclosed in a cabinet. Fork lifts are used in the finishing area, rather than a railed transport system. Anthon of Germany supplied the angular cut-to-size plant.
Packs of finished particleboard, which appeared to be of a very high quality, are loaded on to trucks under a canopy to protect them from any driving rain in the wet season.
A different approach
In building Vietnam’s first continuous particleboard line, Sumitomo Forestry isn’t just bringing a new approach to the making of that panel in the country, but a whole new approach to the business of particleboard manufacture there.
Of course the Dieffenbacher CPS press will bring new standards of quality control to the production process, but there is more to the VECO factory than that.
The delivery of logs by barge is an ecofriendly process that is a marked improvement on the use of often old and polluting trucks common in South East Asia. The yard is kept spotlessly clean, as is the production area, of course. Containment of dust and fumes is another area of unusual attention for the region and the whole factory is well protected against the danger of fire – another thing not so common in this part of the world.
Similarly, on-the-line quality control, backed up by a rigid laboratory testing regime, is an attention to detail which VECO had to have in order to sell to sophisticated markets such as furniture makers – and to Japan.
It would seem the Vietnam particleboard market is very much open for business – and VECO is still the only company using a continuous press to meet its increasing demands. Then there is that other 40% of the site in Long An…
