Following on from Focus on MDF Part 1, our survey of the industry in Europe and North America (WBPI June/July 2022), we now focus on the existing MDF mills in the rest of the world as at the end of 2021 and on those under construction in 2022 or planned for 2023 and beyond.
After several updated and corrected data inputs from across the globe, we now show an increase in installed capacity in 2021 of 86,361,000m3, while further investments identified in this region for 2022/23 and beyond, bring the total up to 93,444,000m3. Our earlier figures for European future capacity of 32,305,000m3 and the North American future capacity figures (including Mexico) of 8,292,000m3 for the same period, means we see future global MDF capacity growing to 132,636,000m3.
China and North East Asia
Average annual growth over the past five years have been typically strong in this region, except for Japan, where GDP growth declined, but subsequently has been recovering more strongly with GDP forecast to be 2.39% in 2022.
In 2021, however, China reported GDP growth of 8.1 % with around 4.4% anticipated in 2022 and 5.1% in 2023. Economic projections are still forecasting strong growth into the future from these nations, which ultimately will drive MDF consumption higher.
China and North-east Asia’s MDF markets had some difficulties in 2021 mainly due to logistical problems and the shortages for containers for export. An increase in global demand and prices, aided further by domestic and export-oriented demand and with continual depreciating domestic currencies across Asian countries against the US dollar will be issues to watch carefully.
Japanese MDF installed capacity remains at 635,000m3 with 95% of material produced mainly in the form of raw panels. There are no plans known to increase domestic MDF capacity and the supply of imported MDF from New Zealand continues, with all three MDF mills there Japanese-owned.
China is still forecast to produce 85% of the furniture in north Asia by 2022/23 and the relatively strong growth in the region will influence not only the aggregate consumption of all wood panels, but also the proportion of use by each sector.
Approximately 32% of the annual production of furniture in China is exported to a wide range of countries, with the US, Japan and Europe being the largest export markets, while the domestic market continues to grow year-on-year.
China’s MDF production capacity has grown rapidly in the last decade and opinions about the actual scale and volume of installed capacity varies greatly due to the difficulty of data collection in the country, with the existence of many small plants with unknown capacity. As a reference, our WBPI survey reports show installed MDF capacity plants where known based on data from China, plus various industry estimates and investment announcements announced by equipment companies and manufacturers.
Fresh input since 2021 has included from Jiangsu Yalian Machine Manufacturing Co Ltd, which has added updated data about the 53 MDF plants it has supplied in China over recent years. This has boosted Chinese capacity levels in the listings this year, but we must remember that many of these are retrospective capacity adjustments and are not indicative of any sudden increases.
Whereas Chinese consumption has previously increased so strongly, forecasts are for a slower average annual growth as China shifts to a focus on more domestic growth in consumption, possibly at the expense of some exports, such as furniture.
When talking about the Chinese MDF sector, we must mention the shift towards particleboard in China, due in part to its more economic production and lighter weight. Many Chinese industry observers believe the PB market will continue to grow and the MDF market could present a more mixed picture.
The rice straw MDF evolution is a continuing development and we have now added the investment decision by Wanhua Ecoboard Co Ltd for a new plant in partnership with Dieffenbacher. The first Wanhua Ecoboard MDF line, which will be installed in Yiyang, Jiangxi Province will have a designed annual capacity of about 210,000m³ using a 9ft x 32.4m CPS+ and is to run completely on straw. Wanhua Ecoboard has apparently ordered another straw-based line from Dieffenbacher during the past few months and we await further details.
Elsewhere in China, existing Chinese MDF producer Guangxi Lelin Forestry Development Co Ltd has recently ordered a new MDF plant from Dieffenbacher. With the construction of an 80m-long CPS+, this will be billed as the world’s longest continuous press and have a design capacity of 630,000m3.
A high-speed THDF plant in Nanning was previously ordered by Guangxi Lelin from Dieffenbacher in June 2018 and commissioned in October 2019.
Plant construction started in the second quarter of 2021 in the southern Chinese city of Chongzuo, not far from the Vietnamese border. Start-up is planned for autumn 2022.
Two other MDF investment projects for China by Dieffenbacher include one by Hubei Hongyi in Xiaogan, with a 200,000m3 capacity. This mill is now operational, so has now been added to the main listing. However, the other proposed MDF mill by Liuzhou Sanyi in Liuzhou has not come to fruition, so has been taken out of our new and future investment listings.
This year we can also add the facility of Shandong Huan Ge Decoration Co Ltd, which is based in Linyi in China’s Shandong Province. It specialises in the production of high-quality MDF for interior construction.
The complete plant, supplied by Siempelkamp, is described as the first fully imported production plant for ultra-thin and extra-wide MDF in China. The annual production capacity is 250,000m³, with the plant being designed for a board thickness range of 1mm up to 9mm. The ContiRoll press measures 9ft x 28.8m.
The addition of new investment projects, data adjustments and new information results in us raising the Chinese capacity figure by 9,843,000m3 to 58,355,000m3 as at the end of 2021.
South East Asia
Economies in South-east Asia are still set to be among the world’s fastest growing when looking out to 2022/23 and beyond.
The six countries – India, Indonesia, South Korea, Malaysia, Thailand, and Vietnam – are expected to ultimately have positive GDP growth rates, despite the impacts of the Covid-19 pandemic.
In this part of Asia, the MDF market had been generally doing well driven by increasing demand, rising adhesive prices and some shortages of wood and raw material availability.
MDF manufacturers have already been plagued by high production costs stemming from the shortage of labour and raw materials ever since the pandemic struck.
Many have shut down plants and cut output, producing only enough for their domestic market, where the selling prices are much higher. Hence, given the frequent lockdowns and low activities, the market then was roughly in equilibrium. However, subsequent lifting of restrictions changed the equation.
Demand has been spurred to new height, as customers rushed to stock up beyond their needs to create buffer, chasing prices up by more than 40% ever since.
Demand from Vietnam was also slow as the ever-increasing shipping cost is making the export of its final goods to faraway destinations like the US less competitive. Thailand is also facing a double whammy.
Not only did it grapple with the high production cost due to a shortage of raw materials, it has also to contend with a low price in its main importing countries such as Vietnam. Many now run their production at subnormal capacity just to hold prices stable.
Likewise, in Malaysia and Indonesia, manufacturers are exporting far less due to the severe shortage of shipping containers.
Their outputs are mostly sold locally, with some export going to Middle East, where shipment can be sent via breakbulk. The outlook remains complex with many of the supply chain problems not about to go away.
In Vietnam, with 1,920,000m3 of MDF capacity confirmed as installed, we can see FSC Vietnam JSC of Kim Tin Group running its expanded 400,000m3 operation at the VND2.3trn (US$98.7m) MDF plant in the Nam Dong Phu Industrial Zone, in the southern province of Binh Phuoc’s Dong Phu District.
Then in December 2021 came the announcement of further investments by the Kim Tin Group which signed contracts with Dieffenbacher for two new MDF production lines in Binh Phuoc and Dong Nai provinces.
They will have a combined production capacity of one million cubic metres per year, for its sites in Chon Thanh, Binh Phuoc province and Dau Giay, Dong Nai province.
The Dieffenbacher digital platform Evoris is an essential part of the contract.
Kim Tin Group plans to produce the first board on its new MDF line in Chon Thanh in May 2023. Start-up of the plant in Dau Giay will follow in February 2024. By 2025, Kim Tin Group intends to build additional plants in central and northern Vietnam.
A third new Vietnamese MDF investment is wood-based panels trader Mekong Wood MDF JSC of Cam Khe in Phu Tho province, which plans to start producing MDF using a 400,000m3 capacity Siempelkamp plant with 8ft x 47.1 m ContiRoll with a NEO press infeed to process acacia wood. End product thickness will be 3.5mm – 32mm, but a large proportion of the output will comprise panels with a thickness of 15-17mm.
An earlier very similar Siempelkamp project for processing acacia wood – that of Dongwha Holdings Group of South Korea – was put into operation in June 2021.
Dongwha ordered the ‘longest MDF press in South-east Asia’ for the second time with another 8’ x 47.1 m press for Vietnam. This third Siempelkamp plant (capacity TBA) has been moved to the main listing.
In Thailand, with 4,873,000m3 of MDF capacity installed, significant new MDF investments continue. Siam Riso (an existing producer of particleboard in Thailand) started MDF production in November 2021 with a Dieffenbacher plant and an annual capacity of 200,000m3.
In 2019, Metro MDF, one of Thailand’s leading wood-based panel producers, also ordered a new Siempelkamp forming and press line (8ft wide ContiRoll Generation 9) to replace the original Küsters forming and press line for its MDF plant at the Kanchanburi site. When confirmed as fully operational, the new capacity will be added to the main listing.
No new investment plans have been seen in Malaysia for some time and our latest MDF mill listing shows the country’s substantial capacity at 1,505,000m3. Apart from domestic sales and Singapore, the Middle East market has been a consistently growing market for Malaysia in recent years But we understand the MDF market has been severely impacted by the pandemic in the past year.
A recent statement from Johor Baru, Evergreen Fibreboard Bhd (EFB) reported that it wants to strengthen its position as one of Asia’s largest MDF manufacturers in the region and to be amongst the top 10 in the world, based on output. MDF is still the core business of the company, followed by lamination and furniture making activities.
For Indonesia, alongside the traditional high-volume plywood production, we now see MDF to be a substantial product produced in this country, with 1,277,500m3 capacity installed over 10 lines.
A new MDF investment by PT Indonesia for an additional 208,000m3 capacity is progressing and is under construction with supervisors from equipment suppliers Yalian, China on the site now. More on this next year.
Moving on to South Korea with 2,113,000m3 of MDF production capacity installed, raw material availability remains a key issue. With the introduction of the Recycled Energy Policy, the amount of wood ‘waste’ used for energy has increased. Consequently Korean panel manufacturers seek a new policy now to prioritise the cascade and efficient use of wood for materials first.
In an overview of this region, we understand the MDF market has been severely impacted by the pandemic and logistical issues in the past year, causing serious disruptions to the supply chains and output, with pandemic restrictions depriving the industry of many of it workers. Shortages of wood raw materials caused by El-Nina effect and the extremely wet weather it brought about since the middle of 2020 has resulted in logging activities being scaled down drastically. More logs are licensed for export, causing shutdown to downstream wood processing plants, which in turn deprives MDF plants of their sources of wood materials. Spikes in prices of melamine urea resin being used to produce MDF MR and CARB rated products were other problems.
INDIA & PAKISTAN
In India MDF capacity has grown substantially to 1,737,000m3 in 2021 and the plywood manufacturer Greenply Industries Ltd’s new MDF line (Greenpanel) in Chittoor District, Andhra Pradesh at 56m long with its Dieffenbacher CPS at the core of the plant, is believed to be currently the longest continuous press in operation in Asia.
In the past year Greenply (Tinsukia, Assam) announced plans to eliminate existing bottlenecks at its two MDF locations in Routhu Suramala (Andhra Pradesh) and Pantnagar (Uttarakhand). This is meant to increase total annual capacity of the two by 20%, from 540,000m3 to 650,000m3.
In its current investment planning, the company estimated INR250m for this expansion, which is expected to be completed in Q3 of the financial year.
According to Greenply, in the last quarter both locations produced at the limits of their capacity for the first time, total capacity utilisation was indicated at 102% (Routhu Suramala: 105%, Pantnagar: 96%).
Consequently, the production volume rose by 40% compared to the preceding year to 138,080m3 (98,612m3).
Greenply Industries Ltd is also set to acquire all shares in Baahu Panels Pvt Ltd, a company based in Kolkata, West Bengal that was established in May 2021.
Baahu Panels had developed plans to build an MDF mill in Sherpura in the western Indian state of Gujarat in recent months. An industrial entrepreneurship memorandum (IEM) had been submitted to the Indian Ministry of Commerce & Industry as part of this process; it has now been approved. The Department of Industries of the State of Gujarat has also authorised the purchase of land where the MDF mill is to be built.
Greenply intends to bring the greenfield project to fruition by the end of its 2022/2023 financial year. With a designed annual capacity of 240,000m3, the mill is to entail an investment of INR5.480bn or around US$73.8m.
Dieffenbacher delivered the continuous production lines for its mills in Pantnagar, Uttarakhand (annual capacity: 180,000 m³) and Routhu Suramala, Andhra Pradesh (360,000 m3).
This latest MDF project will also use a forming and press line delivered by a European manufacturer. However, an Indian producer will provide the energy plant, with sub-components being bought from Chinese businesses.
The Indian laminate and wood-based panel manufacturer Rushil Décor Ltd of Ahemdabad in Gujarat, commissioned Siempelkamp as the single-source supplier of a new 240,000m3 MDF plant with an 8ft x 28.8m ContiRoll press. This plant is now operational and is added to the main listing.
The new plant in Vishakapatnam, Andhra Pradesh, will produce MDF from eucalyptus grown in plantations and from over mature mango trees. To meet local market needs, Rushil Décor will significantly expand its original production capacities above its current and original 90,000m3 MDF capacity at Chikmagalur in Karnataka.
We understand from a company statement that Rushil Décor wants to enter the MDF export business as well through the facility located on the Gulf of Bengal, where thin MDF can also be produced in future.
Century Plyboards (Centuryply) of Kolkata in West Bengal began producing MDF at its northern Indian facility in Hoshiarpur (Punjab) at the end of July 2017, on a continuous production line with an annual capacity of 200,000m³.
The company has been pursuing for some time a new second MDF location in southern India. It made a decision in Q1, 2021 on a greenfield project, which began construction in December 2021 in Gopavaram, Andhra Pradesh with a designed annual capacity planned of 314,000m3 and plant to be supplied by Siempelkamp.
The company is also expanding capacities at the MDF plant in Hoshiarpur (Punjab) in a US$30m project, doubling the existing 198,000m3 capacity.
Centuryply also wants to set up a new laminate, plywood and particleboard production facilities. The first partial step is scheduled for completion in March 2023, and the second by October 2024.
In the third quarter of the business year 2021/2022, Centuryply’s “MDF” division developed considerably better than the group. MDF deliveries were 14% higher than a year earlier at 55,903m3 (Oct.-Dec. 2020: 49,207m3). As such, the sales volume was above the 50,000m³ mark for the first time since the start-up in July 2017. With average prices up by 36%, the division’s sales revenue was improved by 54% to INR1.796bn (INR1.164bn), while EBITDA rose by 70% above the previous year’s level to INR548m (INR323.1m).
With a larger domestic production of MDF now installed it is interesting to note that the Indian Ministry of Commerce and Industry’s Department of Commerce is continuing antidumping measures affecting MDF imports from Asia in four separate investigations.
The DGTR launched these anti-dumping investigations following petitions from Greenply Industries Ltd and Greenpanel Industries Ltd (both based in Tinsukia, Assam), Century Plyboards Ltd.(Centuryply; Kolkata, West Bengal) and Rushil Décor Ltd (Ahmedabad, Gujarat). The request to look at thin MDF imports from Vietnam, Malaysia, Thailand, and Indonesia was made without Rushil Décor’s involvement.
Finally, we can advise that there is a new investment to add to our future capacity listing for India and this is by Metro Decorative Private Ltd based in Haryana, India for a new MDF plant supplied by Yalian of China, with a design capacity of 198,000m3.
Installed MDF capacity in Pakistan remains at 342,000m3 with four manufacturers. The ZRK Industries (Pvt) Ltd investment in its MDF mill with a continuous line in Mardan, we understand is running well. The ZRK group is the largest wood-based panel Industry in Pakistan, producing both MDF and particleboard.
Its wood processing division is vertically integrated, and the group consists of Pakistan’s largest, brand new, fully automated particleboard plant, paper lamination and impregnation lines and now Pakistan’s largest new MDF Plant which is fully operational.
Pakistan currently imports MDF from a variety of countries such as Thailand, Vietnam and China and is a major export market for MDF produced in Sri Lanka, by their only producer Merbok.
DEVELOPMENTS IN SOUTH AMERICA
In South America, Argentina, Brazil, and Chile with a combined population of over 250 million people, continues to have an underlying demand of well over one million housing units annually which in turn, is good for MDF consumption.
South American economies have recently not been so buoyant due to the Covid-19 realities and there have also been regional difficulties regarding wood supply. With elevated prices for wood raw materials, currency crises, political and economic crises as well, the dynamics are challenging.
Regarding the wood supply, in some regions of Brazil, the prices have more than doubled year-on-year and with the cellulose sector also growing and influencing the pressure on wood availability and prices this is an important issue.
Players who own their own pine/ eucalyptus forests in order to supply the majority of their operations like Duratex (now renamed Dexco) have the inflation pressure attenuated, but players who have a high dependency on third-party wood suppliers, may have some risk in maintaining production and full-scale operations.
In the last year demand for MDF products has continued to be strong across the continent, and this has helped the producers achieve record sales levels. Factoring the price increases, although partially fuelled by rising raw materials costs, it was probably the best of times for the industry in the region.
All regional MDF producers recorded a double digit increase in turnover in Q1 2022 compared to Q1 2021 due to higher volumes as much as higher prices.
In terms of strategy most MDF producers try to add as much value to their output as possible, mostly melamine boards, which also implied some commodity products as some raw standard MDF or even white melamine MDF were sometimes in short supply.
For the first time in years freight rates have become a key issue, as containers’ prices soared, most especially -but not only when shipping out from Brazil. International buyers have found alternative freight options such as roll-on / roll-off or breakbulk shipping. Rates in some routes within Latin America are higher than shipping from Europe or Asia.
In terms of investment news, the Brazilian company Berneck SA Painéis e Serrados, as reported last year, ordered its fifth plant, with Generation 9 ContiRoll press (9ft x 48.8m) technology for the location at Lages to produce MDF with an annual design capacity of 550,000m3.
This large MDF/HDF mill became operational in Q4 2021 and the first MDF panels were made before the end of last year so it has been added to the main listing. The new Berneck production line will ultimately manufacture 1,665m³ of MDF daily. With this order, Berneck intends to meet the anticipated increasing future demand of the Latin American market.
The new MDF production line includes the first MDF effluent treatment evaporation plant from Andritz to be installed in Brazil.
The scope of supply also includes a digitalisation package. All five of Berneck’s panels production lines will be equipped with Prod-IQ Next to further self-optimisation to improve productivity and quality.
This really remains a continent of change, of development, of expansion. Amazingly, virtually no MDF was produced in Brazil back in 1998 but it now has the largest production capacity as a country in South America.
Dexco’s (formally Duratex) future MDF project of 350,000m3 at Alagoas is still on ‘stand-by’ for now due to current market conditions and so remains in our future project listing. Duratex previously had confirmed and consolidated its investment commitment in the construction of a new industrial MDF facility in Alagoas, Brazil.
As reported last year, Asperbras (producing under the MDF brand name GreenPlac) is an industrial and agro business group, located in Água Clara, Mato Grosso do Sul state – a complete newcomer to panel production. The company is using its eucalyptus plantations to feed its 250,000m3 Siempelkamp ContiRoll line. This line was running in 2018 and is in the main listing.
Asperbras has also entered the impregnation sector via its MDF/HDF plant and the construction of the treater in July 2021 represents a continuation of the company’s vertical integration of the plant. Also, in May 2021 the company brought a formaldehyde plant into operation; this commissioning was primarily intended to cover the requirements of the adhesive resin plant, which has been in production on site since the beginning of 2020.
According to Greenplac, the facility can now produce approximately 300,000m3 annually. A new short-cycle press was also installed during the last year, which has increased annual laminating capacities by more than 70,000m³.
The group has announced plans to add a second line at a cost of US$24m – with a capacity of about 230,000m3 when its forest base grows more, making a potential combined capacity of 460,000m3. The project remains in our future capacity listing.
Brazilian Guararapes also placed orders for a new and additional MDF line. This third MDF production line is expected to almost double output of the Caçador works. Like the second plant delivered in 2015, Siempelkamp will be supplying all the main components from the debarker through to the packaging section, with a 9ft x 48.7m ContiRoll Generation 9 press.
The refiner is being supplied by Valmet Oyj and the power plant by Vyncke. A short-cycle press from Wemhöner Surface Technologies GmbH is being installed for value-adding operations.
Machine assembly began in the first quarter of 2022; the start-up is planned to take place ideally by the end of 2022. This mill is expected to create 220 new jobs. Siempelkamp says the now projected third plant is designed for an annual capacity of around 520,000m³ or 1,500m³ per day. The start-up due end 2022 will boost Guararapes’ total MDF capacity by 90% to around 1.1 million m³. Guararapes says it believes this will give it the biggest combined MDF facility in South America. Residues from production at the company’s own two plywood works in Palmas and Santa Cecilia, Santa Catarina, will be used as raw material. These two plywood factories each have a total annual capacity of around 350,000m3.
Moving on, Indústria de Compensados Sudati Ltda of Palmas, also active in the plywood sector, wants to further enlarge its MDF capacity as well. According to unconfirmed information, the project is thought to involve a forming and continuous press line from Dieffenbacher, with a planned capacity in the region of 360,000m3. These investment projects now envisaged by Guararapes and Sudati will significantly accelerate the expansion of Brazilian MDF/ HDF capacity.
Along with increasing their raw board capacity, several Brazilian MDF/HDF manufacturers are also set to invest in coating operations. Wemhöner had previously delivered a short cycle press to Berneck’s facility in Curitibanos in April 2020 under the terms of an older contract. Assembly work has now restarted after being delayed by the pandemic.
Wemhöner has received more orders from the Brazilian MDF/HDF industry via Inserco Industrie Service GmbH, headquartered in Viersen, Germany, over the past few months. Besides Guararapes and Sudati, Floraplac Industrial MDF Ltda, based in Paragominas, Pará, has also ordered a short-cycle press.
We thank IBA, the Association for the Brazilian Tree Industry, for its help in updating this part of our report.
In Paraguay, the modest project to build Paraguay’s first MDF plant, a 55,000m3 unit in Coronel Oviedo, (department of Caaguazú) was given the green light by the Industry & Commerce Ministry there. It was planned by Agroindustria del Paraguay SA as its first venture in panel manufacturing and it took advantage of fiscal incentive legislation for national and foreign investors to assist its investment of US$6.7m in imported machinery. The mill, which we understand is running well, is in the main listing. Paraguay’s domestic demand for MDF is also partly satisfied by imports from Brazil and China.
In Chile, installed capacity remains at 1,155,000m3 and there is no new capacity expansion on MDF seen at present. Celulosa Arauco y Constitucion (Chile) has continued to expand its panel products global reach (including MDF). With the international joint venture with Sonae Industria SGPS SA (Portugal) in Europe, the recent expansion in Mexico and the acquisitions in Brazil, it has made its mark internationally and is recognised now as a leading global player.
Production of MDF also continues in individual mills and facilities in Columbia, Ecuador, Uruguay and Venezuela and we have no new, specific information to report.
Consumption of MDF in South America overall (post Covid-19) is projected to increase continually out to 2023/24 and most of this will be in Brazil, which will be consuming more than 70% of all MDF in South America by then. Consumption will also expand over time in other countries such as Argentina, Bolivia, Chile, Columbia, Ecuador, Peru, Uruguay, Venezuela, and other non-producing South American countries, providing strong export demand regionally within the continent, as well as overseas internationally, particularly to the US.
REST OF THE WORLD SUMMARY
As we have done previously the aggregate world capacity table now lists the capacities in the various regions of the world from 2018 to 2022 and beyond.
Also, to have an overview of other important MDF producing countries globally and to complete the picture, we are providing a short update now where information is available and relevant.
With helpful input much appreciated from contacts in Australia, and industry veteran Murray Sturgeon and other colleagues at Nelson Pine NZ, we can report Australia has been one of the strongest performing advanced economies in the world over the past decade. While both housing and non-residential construction have been booming over the past decade, a moderation in residential construction activity began in 2018, and further declines were expected since then.
MDF exports from Australia and imports to Australia averaged less than 100,000m3 annually over the last six years to 2021. MDF is imported mainly from China, Germany, Malaysia, New Zealand, South Korea and Vietnam. The industry is highly concentrated with only three producers as per our listing and has operated at near full capacity over the past five years. We reported previously that MDF demand would gradually moderate but in the long term, there was potential for an increase in production capacity and imports because of a strong domestic market, and export activity to some markets in Asia. So, it was interesting to report that back in October 2019, Borg Manufacturing Pty Ltd, Australia’s leading producer of melamine coated boards, ordered a new MDF forming and press line from Siempelkamp.
Borg is replacing an old multi-opening door skin production line with an MDF forming and press line including ContiRoll in 8ft x 18.8m format with lightboard package.
The production spectrum will include boards in a thickness range from 1mm to 25mm, the use of the lightboard package also enables the production of particularly lightweight fibreboards. Annual capacity of the new line is planned at 100,000m3 and we understand the line will be operational during the second half of 2022 so this facility remains in the future capacity table for now.
In New Zealand, the MDF producers have an installed name plate capacity for MDF of 720,000m3 but based on the current product mix and efficiencies, are apparently now producing around 770,000m3 annually.
In New Zealand, the building and construction cycle is still forecast to shift to a strong growth path (albeit from a small base) over the next two years. Housing approvals were still strong in 2021. Just over 75%- 80% of the MDF produced in New Zealand is exported, with destinations being Japan, China, South-east Asia, and a small volume going to the US.
The three producers in New Zealand are Nelson Pine in Richmond, Nelson, owned by Sumitomo, Japan which also invested in a state-of-the-art LVL line, which started up in 2014; Daiken Southland Ltd, at Mataura (formerly CHH) acquired by the Japanese company Daiken, themselves a part of the large Itochu group; and then the other Daiken MDF facility in Rangiora (formerly owned by Rayonier), Canterbury region. It is felt unlikely that any new MDF plants will be established soon, although capacity in existing plants may be increased further to meet export demand.
A key constraint to adding new production capacity is the highly competitive market for raw materials. There is a general shortage of logs for processing. So, with this in mind, Sumitomo purchased 30,000ha of radiata pine forest in the Nelson region.
Although domestic consumption (+/- 200,000m3) relative to total production capacity is low, on a per capita basis, New Zealand is one of highest consumers of MDF in the world.
The biggest news recently from New Zealand is that Daiken is currently under way with the process to discontinue its MDF line in Rangiora, the largest town and seat of the Waimakariri District, in Canterbury.
The stopping of the operation of the multidaylight press line is expected to happen early 2023. No replacement plans are known at this moment.
This just leaves our rest of world ‘other countries’ category, which this year refers only to Algeria, Egypt, South Africa and Iran.
Building on our previous investment news, we see in North Africa, both Algeria and Egypt joining the nations of MDF producers.
The Algerian family-owned company, Bigstar Sarl via its subsidiary Panneaux d’Algérie entrusted Dieffenbacher with their order for the delivery of a complete system for producing MDF panels at its site in El Tarf in the far north-east of the country.
This complete MDF plant with CPS+ is marking Dieffenbacher’ s first greenfield project on African soil and the first continuous press operating in North Africa. The plant has been operational for over a year starting in 2021, with the first commercial boards produced in March 2022 and it has been added to the main listing.
Bigstar CEO Guelai Mohamed Chiheb pointed to a rising demand for MDF boards in Algeria, with imports from other countries becoming increasingly costly.
The 6ft x 14.5m long CPS+ for Bigstar was supplied from Eppingen, Germany while Shanghai Wood-Based Panel Machinery Co (SWPM) has been responsible for the remainder of the scope of supply and for project management. Annual capacity is approximately 80,000m3.
In Egypt, we also recorded previously the investment decision by Nile Wood SAE to add an MDF facility. Egyptian Kuwaiti Holding (EKH) said its 99.99%-owned subsidiary, International Co for Financial Investment, will start to establish a factory to produce MDF in two phases with a total estimated investment cost of LE2bn. The company says that the facility will be built on land with an area of 300,000m2 in Beni Suef. The International technology Group Andritz received an order – in co-operation with Dieffenbacher – to supply the complete MDF plant with a design capacity of 200,000m3, including a chip washing and pressurised refining system, for its greenfield site in Sadat City, Egypt. Start-up of the new line is scheduled by the end of 2022.
Nile Wood will use sesbania wood from its own plantations as the raw material for its MDF line. Sesbania is a fast-growing plant that matures for harvesting within two years and is environmentally friendly due to its ability to fix nitrogen. The water for the plantations is processed from urban waste water.
The Egyptian company Wood Technology Co (WOTECH) placed a milestone project order in February 2020 with Siempelkamp for an MDF plant with an annual production capacity of 205,000m³ and 8ft x 48.7m ContiRoll press which will process rice straw as the raw material.
The WOTECH company, founded for this project by companies of the Egyptian oil and gas industry, which are part of the country’s Ministry of Petroleum, has also received positive feedback on the political level.
The new plant is considered a fundamental contribution to supporting the governmental efforts in Egypt to realise an environmentally friendly, CO2-reducing, and sustainable use of rice straw. It will also create many jobs in the MDF production and furniture industry.
The assembly process at Idku, near Alexandria started in January 2022 and start up is scheduled for the end of 2022 or early 2023.
Board produced on the line will cover 3mm to 40mm thickness. The panels produced will primarily go into the furniture industry in the local or Middle East region.
By using rice straw, the plant opens new perspectives for a raw material that would otherwise be largely incinerated as a waste product. It also closes the gaps caused by insufficient local wood resources.
In South Africa private sector housing is still projected to grow annually and certainly the demand for furniture and wood-based panel products has strengthened there considerably over the past decade.
Only one MDF mill has been under expansive construction in South Africa in the last year, and this is by PG Bison, which has an existing MDF facility at Boksburg in Gauteng Province, with a current installed capacity of 132,000m3 out of a total South African capacity of 207,000m3.
In December 2020 PG Bison unveiled a ZAR2bn (equalling roughly €110m) programme of investments at the South Africa Investment Conference. Owned by the South African conglomerate KAP Industrial Holdings PG Bison said that the investments involved installing a new front end, screens, gluing, blending and dryer at its particleboard mill in Mkondo (Piet Retief), Mpumalanga, that had already been modernised in several phases in the past few years and also the installation of a new MDF line with a capacity of 275,000m3 at the Piet Retief site.
On November 22, 2021, PG Bison Ltd signed the order contract for the supply of the main components of the MDF/HDF plant with Siempelkamp featuring a 6ft x 38.7m ContiRoll press line.
According to PG Bison, the new plant will produce MDF, light MDF and HDF in thicknesses between 3mm to 35mm, reaching a capacity of around 780m3/day. Commissioning is planned for mid-2024.
Expanding the eMkhondo particleboard plant with an MDF/HDF plant is part of a larger investment programme approved in mid-November 2020, which also includes installation of a chip dryer and an energy plant in eMkhondo as well as construction of a further short cycle press and a HotCoating plant at the MDF site in Boksburg.
Downstream processing capacity will also be increased again following the completion of the two projects. Additional investments to the tune of around ZAR400m are envisaged for the projects between now and 2025, which include installing a seventh short cycle press and a second Hot Coating line.
The press and the coating line are to be installed at the Boksburg MDF mill and start operating in the third quarter of 2022.
Despite the sharp declines in the few years following the previous global economic crisis, MDF consumption increased by 5% annually over the past five years. The relatively strong growth in production and consumption of furniture in the past decade, as well as projections for strong growth to 2022/23/24, suggest that it will be a key sector continually driving growth in the consumption of MDF and particleboard.
IRAN
To complete this section and following an in-depth review, we have now been able to completely update our main listing which shows Iran’s MDF name plate production capacity up to an impressive 3,100,000m3.
In recent times the Ministry of Industries, Mining & Trade in Iran banned the exports of timber, chipboards and MDF in a letter to the Customs Administration. The measure was said to be aimed at regulating the domestic market, as furniture producers and businesses in the field had recently complained of scarcity and high prices of raw materials used in their trades.
So, again we can also report now that there was a considerable change in the MDF manufacturers evolution in Iran during the last five years. A lot of new companies came into the market with both new and secondhand lines installed. The previous details about Iranian MDF industries published in WBPI has been updated with the help of local specialists, allowing us to now feature all current MDF manufacturers in Iran along with location and capacity details.
Main list changes and additions feature the MDF facilities of the Arian Takhteh 2 facility with 250,000m3 at Rasht, Gilan producing first boards during 2021 and Caspian at Salmanshahr, Mazandaran with 105,000m3 of MDF also starting up in 2021.
The Arian Chemie 2 250,000m3 line at Amir Abad Seaport, Mazandaran, belonging to the holdings of Arian Saeed is running well we understand.
There are also three new investments in Iran for MDF lines now listed in our future capacity table which are under construction – the Arta Industrial Group 2 at Ardebil with 300,000m3, Melamin Sazeh 2 at Azarshahr, Tabriz with 500,000m3 and Pakchoub at Hudssainabad, Khuzestan with 120,000m3.
In Iran, MDF still has further good potential for more to be produced locally as nearly 800,000m3 of MDF was imported only in the last years, mainly from Turkey and China.
Beyond that, we have now removed from our future listings the previously shown MDF mill project for ‘Green Fibre’, that we understood and reported as being developed as a project in ‘West Asia’ as no further tangible details as such are available.
As previously stated in this two-part global MDF review, western Europe and North America are currently seeing fresh dynamics with the growth in Europe coming from Lithuania and the eastern region, driven mainly by Turkish and Russian investments.
In North America, the rice straw MDF plant in California is now operational but seeking new owners, the Swiss Krono MDF plant in South Carolina started up and Mexico’s new mills are taking their place in the market. For the rest of the world, we must still carefully watch the expansionist MDF developments in Algeria, Brazil, China, Egypt, India, Indonesia, Iran, Thailand and Vietnam.
In summary then, our final aggregate totals for global MDF capacity at the end of 2021 was 121,705,000m3. Known future projects in 2022/23 and beyond could see this reach 132,636,000m3 based on our current information.
HOW THE LISTING WAS COMPILED
The WBPI listings published in 2021 were reviewed and modifications made, using other published sources and data received directly from the mills and specific industry experts. Published information was reviewed for news of capacity changes. These sources include relevant trade magazines, association reports, press releases and equipment suppliers’ reference lists.
The mills own reported capacities are used wherever possible because this is the basis upon which they can make their estimates of future capacity and production changes.
Where this information is not available, published sources are used, usually on a basis of 330 operating days per year.
Conversion to ft2 to m3/year is made with 1,000ft2 to m3/year is made with 1,000ft2 equal to 1.77m3.
