South America vs china

A bleak picture in western Europe showed nine closures and four new lines.

However, we were able to report positive news in eastern Europe and Turkey, with new projects totaling 3.6 million m3 planned to be operating by the end of 2012.

Before leaving Europe, we should mention that, after we went to press with part 1, on October 19, 2012, IKEA Group announced that it had signed an agreement to acquire Pfleiderer Grajewo’s 500,000m3 a year particleboard mill in Novgorod, Russia, to make lightweight boards for its furniture production; the IKEA Group is rapidly becoming a significant player in the particleboard manufacturing industry.

In this report we look at what is happening in the ‘rest of the world’ and find a number of new lines planned in South America, China and South East Asia. We find that capacity at the end of 2011 was 30,904,000m3 (Table 1), compared with 30,434,000m3 at the end of 2010.

The current year (2012) has seen significant capacity additions, as we shall see, and 2013 and 2014 will see further additions, subject to the South American ones going ahead in the current, less positive, economic climate in the region.

Combining the figures for Europe and North America and the ‘rest of the world’, we find a global total of 91,544,000m3 for 2011, compared with 96,303,000m3 for 2010 (Table 6). This represents a decrease of 4.9%.

Europe and North America accounted for around 68.4% of that total in 2010, but for 2011, the figure is down to 66.2%. This fall is due to capacity reductions in the US and Europe but will be reversed in next year’s survey by known additional capacity installed during 2012.

As always, we are very pleased to receive information about any mills or production lines that may have escaped our net when we are trawling the globe for information.

We use a range of sources including equipment suppliers, industry experts, relevant publications and not least the mills themselves, who are invited to visit www.intermark.plus.com at any time and enter or amend their details, or to email the editor: mbotting@wbpionline.com. Such input is most welcome in helping to ensure that our information is as accurate as possible.

We will now look at where the major particleboard capacity changes are occurring, or about to occur, around the world outside Europe and North America.

China
Last year’s survey showed, in Table 5, a total of eight new lines for China planned to start up in 2012 and as our listing in this article is of capacity active in 2011, those lines have been carried forward to Table 5 this year.

We can add to that list Zhangzhou Hong Wei Woods Industry of Longhai City, 50km from Xiamen Port, south Fujian province. This 300,000m3 a year line is being supplied by Dieffenbacher, with a CPS continuous press of 2.95 x 26.41m. Handover of the plant is scheduled for December 2013.

It appears the long-promised move by Chinese producers into serious volumes of particleboard is finally gathering pace, with a total of 2,220,000m3 of new capacity expected by end-2013. As in past years, we have to estimate total volume in China, due to the many small mills in rural locations.

South East Asia
In Thailand, Metro Particle’s 410,000m3/year line is now included in the main listings.

Meanwhile, Vanachai’s 235,000m3/year SWPM line came onstream in mid-2012 so is shown as additional capacity for that year in Table 5. It has a 4ft x 38.5m Contiplus press.

In Vietnam, we are told by Dieffenbacher that Vina Eco Board (VECO) started up its 260,000m3/year line in early 2012.

Other Asia
We mentioned last year that the first continuous press for India had been purchased by Star Panel Boards, Mumbai, now known as Associate Decor Ltd.

We are again advised by Dieffenbacher that the line produced its first board in March 2012 and gained its acceptance certificate on August 2. The CPS press is 9ft x 22.01m and the designed capacity 950m3/day.

South America
In Argentina, Cuyoplacas SA is closing 100,000m3 of capacity in Las Heras Mendosa, but opened a 360,000m3 line in General Lavalle during 2012. These changes are shown in Table 5.

In Brazil, Arauco closed three older Dieffenbacher single-daylight lines at the end of 2011 (WBPI issue 5, 2012, p26). These were the former Placas do Parana mills and they will be removed from the main listings next year, as they were still present during 2011.

Meanwhile, at Piên, Arauco has upgraded its existing Siempelkamp line to add around 84,000m3/year by November 2012.

As reported last year, Masisa plans to increase its capacity at its Montenegro mill by 100,000m3 in each of 2010, 2011, 2012 and 2014. The latter two are shown in Table 5.

Repinho Reflorestadora added 93,000m3 to its line right at the end of 2011 so it is shown as additional capacity for 2012.

Still in Brazil, Fibraplac plans to launch a 180,000m3 per day line in Glorinha in 2013.

Duratex continues its phased ramping-up of its Taquari MDP line with the intention of reaching its full 650,000m3/year capacity during 2013. It also plans to increase capacity by an unspecified amount on its Uberaba line during 2013.

Less certain, at least in terms of start-up date, is the plan of Berneck SA to build an 800,000m3/year MDP line on the Santa Catarina site where its new MDF line recently started production. However, all is not as cheerful as it was this time last year in Brazil’s general economy – and therefore its panel market – and Berneck may put back this project from end-2014 to mid- or end- 2015. Even then, Berneck says the plans are "not 100% guaranteed".

We have shown this new capacity in Table 5 for 2014, but it sounds as if it may well be withdrawn from next year’s survey, or moved into the future.

The South American panel industry has always been somewhat unpredictable in that sense.

Middle East/’Other Asia’
We only have one development to report from this region and that is a plan by Iran’s Pooya Wood to increase capacity on its multiopening Siempelkamp line in Shergah by 160,000m3/year to 360,000m3/year in 2013.

Africa
We have received updated information from a reader on the entire industry in South Africa, for which we are enormously grateful.

We are advised that the Sonae line shown as being in Piet Retief is in fact in Panbult and its capacity is 148,000m3/year, rather than 120,000m3/year as shown in last year’s listings, so we have amended those details.

We are also told that the Bisonboard line at Pietermaritzburg is closed and we have removed it from our listings. The same applies to the Stellenbosch line belonging to the same company.

The company which we have been listing as Evopan we are told is in fact known in South Africa as William Tell so we have renamed it in our listings. However, as we went to press we were advised that William Tell ceased trading on October 4, 2012. It thus remains in the listing for 2011.

We have anyway removed the line previously shown in Booysens as our informant tells us that this line has been scrapped.

However, we were missing another line at Krugersdorp which we have now added for 2011 for correctness. This is a 6ft wide single-opening press producing around 73,000m3/year.

We have also been advised of a mill previously absent from our listings and that is owned by Hazeldene Sawmills. It is an 8ft x 4ft Chinese-made, single-daylight line, with a small capacity of around 16,500m3/year. It is now in the lists.

There is a new mill in Swaziland, owned by NHR Investments, a privately owned Swaziland company specialising in forestry and forest products. It was built to use all the residues from the company’s sawmill on the same site.

Production began in September 2012 and we were told in November that it had reached 75% of its 150m3/day capacity. It is thus shown in Table 5. The complete plant was supplied by Guangzhou Weiheng Machinery Co Ltd of China with a 10-daylight 9 x 6ft press.

Future capacity changes
To summarise the aforementioned planned new capacities, the most striking region for such developments is South America.

We are showing a net total of 2,681,000m3/year in planned new capacity, much of it in Brazil. However, in the time elapsed since most of this new capacity was in the planning stage, the South American economies have experienced a slowing down in economic growth that is quite worrying.

Berneck is making cautious noises about its plans for a massive increase in capacity by 2014 and other producers with expansion in train or planned must be concerned about the market for all this particleboard, or MDP, if the economic slowdown continues.

If all the extra capacity does come on stream and the market does not pick up, then at best the producers will see their margins squeezed very hard and at worst they could find no market for a substantial volume of regional production.

Meanwhile, Arauco’s purchase of Pfleiderer’s Moncure mill – and then Flakeboard’s mills – give it a total of around 1.37 million m3 of annual capacity in North America. That surely must limit the potential for Arauco to export to North America from its South American mills if local markets get tough.

It is no surprise that China is number two in upcoming new capacity worldwide and, while previous confident talk of a big move into particleboard production has proved unfounded, this time, 2.2 million m3/year of new capacity suggests things will be different and that market acceptance in place of some MDF volume may finally become a reality in China.

The end of 2012 poses many more questions than it answers, with global economic uncertainty very much to the fore. North America does appear to be heading into general economic recovery, while South America looks to be heading in the opposite direction.

Meanwhile, western Europe and its shaky currency still undermines confidence around the world.