In this the first part of our annual survey of the global MDF producing industry, independent consultant Geoff Rhodes looks at the MDF mills and their capacities in Europe and North America in 2021 and at the prospects for the industry generally.
The dynamics effect and realities of 2021 linked to the Covid-19 pandemic have also been considered at this exceptional time.
The pandemic severely influenced the wood-based panel and surfaces industry in 2021. A fall in demand caused by the first lockdown in the second quarter of 2020 gave way to an unexpectedly strong recovery in demand over the next few months.
The situation continued to improve in a variety of segments during the first half of 2021. Many companies had scaled back production and reduced their inventories after the outbreak of the pandemic. The subsequent recovery, combined with shifts in global supply flows, culminated in a structural shortage of material on markets.
Supply was limited in the wake of the destocking and no longer sufficient to meet demand that was still growing. Many consuming companies reacted to this shortage by purchasing extra amounts to ensure their supply of upstream products. Lead times increased more and more as a result. From spring onwards, the market encountered supply constraints that endured into the third quarter. Production plans had to be adjusted and production cutbacks or shutdowns could not always be avoided. The combination of these factors paved the way for an unusually large increase in prices for almost all products during 2021.
At the same time, though, sourcing upstream products became increasingly critical, and producers had a really challenging time sourcing all products used to make resin, glue/impregnating resin, PMDI glue, melamine film and, in the second half of the year, decor paper and printing decors. These escalating costs for upstream products reduced the better margins that had been seen and achieved by raising prices.
So in 2021 and looking at Europe first, it was a positive year for MDF manufacturers with most companies focused on dealing with the impact of the pandemic and although consumption fell for a while in both the furniture and construction sectors, a V-shaped recovery was experienced as the year progressed and concluded.
The news of all upcoming new European MDF mills are listed in Table 1, European capacity development for 2022 and beyond.
Included are the major investments by Yildiz Entegre of Turkey overseas in Vladimir, Russia, the LLC Luzales MDF investment in Syuktvkar Russia and in Turkey itself, the investments by Starwood at Inegol (two investments) plus Kastamonu Balikesir with 550,000m3, and Germany’s fibreboard maker Homanit, which unveiled plans to invest some €115m in constructing a new MDF production facility for the company at Pagirai near Vilnius, in Lithuania.
Additionally, we can also now include the Slovakian Kronospan MDF mill planned for start up in Zvolen with a planned capacity of 450,000m3
Kronospan filed an application with the Slovakian Ministry of Environment for an environmental impact assessment for an MDF mill in Zvolen back at the start of 2021. According to the submitted paperwork, the new mill is to make 6-38 mm thick MDF. Work to build the mill is to commence within two years of receipt of the required permits. It will then take another 18 months for commissioning to take place.
Kronospan sro currently operates a particleboard line in Zvolen, which features an 8ft x 45m Contiplus press from Shanghai Wood-Based Panel Machinery Co Ltd (SWPM) that was commissioned in October 2007 and has an annual capacity of around 600,000m³.
The new line replaced an older multi-opening line with a capacity of around 180,000m³ per year. Kronospan gained the mill in Zvolen in June 2003 when it acquired particleboard operations from the beech converter Bucina.
In Russia we previously had listed the Kronospan MDF development at Lydinovo and with the first boards produced now during in 2021, this has been moved to the main listing and in the same way in Turkey, the investments by Camsan at Ordu has been moved to the main listing as the mill also started production in 2021.
In the US, and building on last year’s report, the CalPlant 1 (Eureka MDF) project rice straw-based MDF plant in California became a production reality, albeit slowly, with an initial startup in November 2020 but sadly has since filed for bankruptcy.
It is reported that the company continues to make process and product improvements, so the facility will be more valuable when eventually sold. Apparently there have been several tours but no one has yet shown significant interest and the goal remains to sell the facility by late summer or autumn this year.
In Canada, the MDF business and markets remained strong, with West Fraser now owning the former Norbord MDF production facility in Cowie, Scotland because of the Norbord acquisition.
In Mexico, the positive capacity developments outlined previously progressed well. The South America based wood-based panel giant Arauco is now running the former Masisa’s MDF facility in Durango and announced in November 2021 a US$200m MDF project in Zitácuaro (Michoacán) to double its capacity. Proteak Uno (Pro MDF) has been renamed Technotable, in Huimanguillo.
This year’s survey once again provides listings of design capacity in the two regions as at the end of 2021. We also show the changes to capacity expected during 2022 and beyond.
Total all-European installed capacity reached 29,526,800m3 in 2021, compared with 28,931,800m3 in 2020, and 28,606,000m3 in 2019.
All MDF mills continue to work hard to optimise their installations and look for continual production refinements and as always, new product developments to maximise the opportunities that exist within their individual facilities.
This survey continues to be published in two parts; the second part will deal with the rest of the world outside Europe and North America and will be published in the August- September 2022 issue of WBPI.
The author and the editor of WBPI, remain grateful to all those organisations and manufacturers as well as other industry professionals, who made valued contributions to help us build this narrative. We are always pleased to receive new information regarding design capacity changes at any time during the year, whenever it is most convenient.
EUROPEAN CAPACITY
Significantly, ongoing investments in Turkey continue. For its second production plant near Inegöl, Starwood the Turkish wood-based materials manufacturer ordered its second thin-board plant to produce thin MDF/HDF boards with a capacity of 320,000m3. This is the fifth time that Starwood has chosen to use Siempelkamp’s ContiRoll press technology and a Siempelkamp plant. The new high-performance thin board plant is being built at Starwood’s second site near Inegöl, which has so far been used for wood chip production. It supplements the capacity of approximately 750-800m³/day currently being produced on the first 7ft line. The new 8ft line is designed for a capacity of an additional 1,000m³/day with board thicknesses of 2.7-3mm. Their thickness ranges from 1.5-6mm. It is therefore geared to the production of thin and ultra-thin boards, but can also be used in furniture board production for MDF and L-MDF up to 22mm.
Very thin MDF boards are increasingly being used, for example, as furniture back panels, top layers of doors or drawer bottoms. Thin MDF can only be produced economically with very fast-running plants. The new plant for Starwood is therefore designed to run at 2,000mm/s.
The core of the scope of supply is the moulding and press line around the 9th-generation ContiRoll continuous press in the 8ft x 28.8m format.
Assembly started in mid-2021 and based on the long years of co-operation and experience of both companies, the goal to produce the first board is planned in 2022. Starwood, already established in the wood-based products industry for four generations, is one of the largest industrial companies in Turkey.
“We are pleased to once again contribute with a plant to our Turkish partner’s growing production capacities and to support its importance on the market with first-class press concepts,” said Samiron Mondal, member of the management board of G Siempelkamp GmbH & Co KG.
Additionally, Starwood has commissioned Dieffenbacher to supply an MDF line in Inegöl, Turkey, that will include a 9ft-wide by 63.5m-long CPS+ press, the largest continuous wood-based panel press in Turkey. Production capacity will be between 600-700,000m3.
Just two years ago, Starwood signed the acceptance of its new Dieffenbacher particleboard line, one month ahead of the contractually agreed upon date.
“Collaboration is the key,” said Starwood CEO Hüseyin Yildiz at the contract negotiations in Inegöl in July. “That’s the motto that made our particleboard project so successful two years ago, and I trust Dieffenbacher that it will be the same for our new MDF line.”
Following the engineering phase, installation is scheduled to start in the second quarter of 2022. The first board is to be produced toward the end of the same year. “I strongly believe in the power of teamwork with Dieffenbacher. It wouldn’t surprise me if we manage to be a few weeks ahead of schedule again,” Hüseyin Yildiz added.
In addition to Turkey’s largest continuous wood-based panel press, Dieffenbacher will supply the dryer, sifter, and glue preparation technology as well as the forming station and forming line. Downstream of the press, Dieffenbacher will deliver the press emission control system, raw board handling, STS storage system and the sanding line. Dieffenbacher is also responsible for the plant electrics and automation.
“As Starwood is a family-owned company, we always prefer working with familyowned companies like Dieffenbacher, whose owners are well qualified and keen on their core business. We enjoy co-operating with companies and people who listen, who work hard to understand the needs of their customers and who have similar values. There was a lot of compatibility between our company and the Dieffenbacher family and their company’s people. That made us choose Dieffenbacher again for our new MDF project,” Hüseyin Yildiz concluded.
With the prospect of Turkey continuing as a growing market for wood-based panel plants, Dieffenbacher sought to strengthen its business activities in Turkey by appointing Isik Zorcu as project manager in a newly established Dieffenbacher Liaison Office Turkey.
Isik Zorcu is well known in the Turkish wood-based panels industry. He has a technical background in machinery and many years of experience working for wood-based panels producers. Mr Zorcu began his working life as a maintenance specialist for Kastamonu Entegre in 2001 where he also supported the project investment department. In 2012, he joined AGT and became a member of the project team constructing AGT’s first MDF line in Antalya.
After successfully completing that project, Isik Zorcu was promoted to project executive for the second MDF line at the same site in 2018. Building on past sales successes achieved together with the company's long-time partner Hanex, led by chief executive officer Dr Cihan Ayla, Mr Zorcu joins the strong team for Turkey.
The scope of the successful partnership between Hanex and Dieffenbacher remains unchanged. Mr Zorcu's initial focus will be to manage the Dieffenbacher construction sites in Turkey and to expand the modernisation and spare parts business. He will work closely with Hanex under the co-ordination of the Dieffenbacher sales team in Germany.
Finally, and in September 2021, Turkish wood-based panels and building component manufacturer Kastamonu Entegre Agac San ve Tic AS (Istanbul) announced plans to expand its Balikesir particleboard plant, located in western Turkey, by installing a brand new MDF/HDF system with capacity of 550,000m3. The company ordered the relevant machinery via GIM Export Group GmbH & Co KG (Göttingen). GIM Export Group will also secure financing of the overall project. Deliveries from Siempelkamp Maschinen-und Anlagenbau GmbH (Krefeld) will include sifters, a forming and press line with a Generation 9 ContiRoll in 8ft x 63.7m dimensions, a cooling and stacking line, interim storage as well as a sanding line. The fibre dryer is to be supplied by Siempelkamp subsidiary Büttner Energie-und Trocknungstechnik GmbH (Krefeld). Steinemann Technology AG (St Gallen, Switzerland) is to supply the 12-head grinding machine. Andritz AG (Graz, Austria) has been commissioned to deliver the disc chipper and the refiner. For further processing, Kastamonu has ordered a total of three short-cycle presses from Wemhöner Surface Technologies GmbH & Co KG (Herford), two of which are to be installed in Balikesir. The third one is intended for expansion of laminating capacities at the Russian MDF/HDF and laminate flooring plant in Alabuga (Tatarstan). In Balikesir production of laminate flooring is also planned, the profiling line is to be supplied by Homag GmbH (Schopfloch). Within the scope of the overall project, Kastamonu also plans to establish impregnation capacities in Balikesir; negotiations concerning placing of a treater order are apparently still ongoing.
The particleboard plant, which is located around 15km south of the city of Balikesir, was commissioned over the course of 2005. Also at that time, most of the particleboard equipment had been supplied by the Siempelkamp Group.
Included within our 2022 and beyond future capacity table is Germany’s Homanit, which is to boost its manufacturing presence in the Baltic states by investing in Lithuania.
Homann Holzwerkstoffe is producing MDF successfully in Poland and is now investing €115m in constructing a brand new MDF production facility in Lithuania.
Operating plants in Losheim am See, Germany, and in the Polish cities of Karlino and Krosno Odrzanskie, the Homanit Group is a European specialist in the production of thin, high-value-added wood fibreboards.
For its new site in Pagirai near the Lithuanian capital of Vilnius, the company has ordered a complete low-emissions THDF plant from Dieffenbacher GmbH Maschinen-und Anlagenbau. Dieffenbacher will supply all components, from debarking to stacking. The plant will deploy the latest environmental technology solutions in combination with the fibre dryer and a 50MW energy plant, ensuring that emissions are minimised.
“Dieffenbacher has supported us with full commitment in our efforts to operate our new plant with the lowest possible emissions,” said Homanit managing director Ernst Keider.
The core of the plant features a state-of- the-art thin board forming and press line based on a CPS+ continuous press and a Dieffenbacher PROjet gluing system. Dieffenbacher is responsible for the automation of the new line.
The THDF plant is designed to keep emissions to a minimum while producing 1.5-22mm thick MDF of the highest quality. A production volume of 310,000m³ per year is planned, corresponding roughly to a daily capacity of 950m³. Assembly was scheduled to start in the autumn of 2021, with plant start-up to take place in the summer of 2022.
The new Lithuanian facility should expand Homanit’s foothold in the three Baltic states, but also allow the manufacturer to export a larger share of the group’s production beyond Europe.
Commenting on the holding company’s plans, Fritz Homann, the managing director of Homann Holzwerkstoffe, said the group had “strong free cash flow for further international expansions”, for which Lithuania provided “a good and realistic basis”.
Added to the main listing now is the Bulgarian Kronospan MDF facility with its 265,000m3 capacity in Veliko Tarnova, which is up and running and on the same site where the company is producing both PB and MFC, for the local furniture-related manufacturing cluster.
The Austrian wood-based panels manufacturer is now reported to be expanding its whole production facilities in this northern Bulgarian city. Apart from adding further particleboard investment it has now started the production of MDF, which had previously never been made in Bulgaria.
An investment plan worth BGN300m has already been launched by the company, which also plans to create a zone where furniture manufacturers using panels made by Kronospan will also be able to set up production sites. Kronospan runs two PB plants in Bulgaria, one in Veliko Tarnovo and another in Burgas, giving employment to some 400 people. The expansion is expected to add 100 jobs and may create hundreds more in affiliated industries.
Italy continues to be caught up in the challenges caused by the somewhat long-term decline in furniture production locally, coupled with the construction sector’s reduction in activity. Bipan (Luigi Frati) and Plaxil (Fantoni) remain the two long-term domestic MDF brands and producers.
We can report that Fantoni’s Osoppo €60m MDF investment in Italy, has continued and progressed well and is fully operational. The project there reflects the company’s long-term solid commitment to the MDF sector, both as a pioneer and as an innovator.
Looking ahead, the trend in Italy towards utilising increasing percentages of recycled wood raw materials continues, although currently there are reported difficulties in sourcing this raw material as the competing energy market is using more of this resource. Using new technologies now commonly seen in the plastic recycling sector, the MDF industry is utilising these possibilities increasingly (optical scanners for instance) and benefitting accordingly.
We pay tribute and note that Paolo Fantoni, of Fantoni Spa stood down as chairman of the European Panels Federation (EPF) in June 2021 after overseeing the progressive and continual evolution of the organisation and passed the ongoing responsibility to Martin Brettenthaler of Swiss Krono Group. As the outgoing EPF chairman Mr Fantoni should be congratulated and thanked for his leadership and many achievements, all of which will benefit the whole wood-based panels sector for many years to come. He has been a very engaged, dedicated and results-oriented leader and will be a hard act to follow.
From an industry-wide broad overview in Europe, it appears that there really are emerging opportunities to build further on the increasing demand for wood-based panels including MDF with the positive momentum and recognition of them being climate friendly materials for the future.
Longer term, given the initiatives promoted through the Green Deal, the Renovation Wave and the New European Bauhaus the prospects look dynamic and are very encouraging.
Broadly, MDF – like all wood-based panels – came through Covid remarkably well, not least because construction was designated an essential industry, and in some countries, furniture was supported too.
A change in habits has led to a clear increase in the demand for furniture, especially home office furniture, and MDF producers have been delighted to supply this. This demand remains ongoing.
Added to that, the impact of the Green Deal is such that people are starting to realise the climate benefits of using wood, and this too has led to an increase in demand.
But unfortunately, there are some clouds on the horizon being 1) consumer demand is expected to drop in the light of concern about Ukraine and a post-Covid tightening of public purses; 2) supply chains were already a challenge, and now become even more so given the importance of oil, gas and urea for wood-based panel products; and 3) too many sectors are looking at wood (with subsidies) as a way to decarbonise, leading to great concerns about wood availability for traditional materials, such as panels.
The Ukraine crisis and the dependence on gas from Russia is impacting on direct energy costs and on chemical input costs. Longer term the refocusing on energy security is likely to see an increase in the proportion of energy derived from renewables. Biofuels and general biomass demand is likely to increase and if wood supply doesn’t keep pace, then rising wood costs could be an issue in the future.
With all this in mind, the most dramatic event is the cost development of all resources with extreme price increases, which take place monthly or even bi-monthly. Right now, user groups cannot refuse them, many older contracts get renegotiated, and many suppliers are not able to quote longer than one or two months ahead.
The critical question is whether this price shock, which on its energy side hits Europe most severely, will end up reducing the competitiveness of the European industry globally, as well as the purchasing power of families, thus creating a recessive scenario into the future?
However, for all this, the sector remains optimistic and continues to invest.
In France, the MDF market and supply has been difficult in the trade-related sector and with shortages of MDF and HDF reported. It has been noted previously that the market for thin MDF was particularly strong as vinyl flooring appears less accepted and HDF-based laminate flooring is apparently coming back in force.
The previously privately owned Panneaux de Corrèze was acquired by Unilin Group in November 2021. The acquisition apparently was part of Unilin Group’s strategic growth ambitions and will allows its Unilin Panels division to better serve the French market.
Panneaux de Corrèze produces approximately 150,000m3 of raw MDF panels. Its production plant is in Corrèze, in the centre of France, and has 110 employees. The company claims to be the MDF market leader in France and is known for its excellent quality MDF panels, strong brands, and sustainability innovations.
The panel division of Unilin Group, Unilin Panels, is a European market leader and the company also operates two MDF/HDF lines in Bazeilles, northern France with a combined annual capacity of about 700,000m³.
So, this acquisition will increase the company’s MDF panels production capacity and substantially strengthen its position in France. This will apparently allow Unilin Panels to offer the most innovative and complete range of MDF products of the best quality to the French market and to serve this market better.
The company states that the acquisition also fits perfectly within Unilin Group’s sustainability strategy. Thanks to its ‘Next’ range, Panneaux de Corrèze has a great deal of expertise on reducing the use of fossil raw materials to manufacture its panels.
The company launched its ‘Next naturalpanel’ line in July 2021. This product uses the Green Ultimate bio-based, formaldehyde and PMDI-free adhesive system developed by the biochemical startup Evertree SAS, headquartered in Paris. Its portfolio of Next naturalpanel products currently comprises five thicknesses between 8-22 mm in a 2,800 x 2,070mm size. FSC-certified and PEFC-certified products are available on request.
All Panneaux de Corrèze employees will be joining the Unilin Group and the existing structures are being maintained. The current Panneaux de Corrèze management will stay in place to help steer the integration in the right direction.
Veronique Hoflack, president of Unilin Panels, said the following about the acquisition: “Unilin Panels aims to achieve 25% growth by 2025. We want to become the market leader in Belgium, the Netherlands and France. With the acquisition of Panneaux de Corrèze, we will offer our customers in France an even wider range of new product innovations and will improve our service even further. It allows us to do our bit to ensure a stronger and more sustainable future for our own employees and for all our customers in the French interior design and construction industry.”
Philippe Mocaer, president of Panneaux de Corrèze, responded enthusiastically: “Our company was looking for a strong industrial and commercial partner to continue our growth. Unilin Group is a dynamic company, with a lot of know-how, that is willing to invest in innovation. The integration of Panneaux de Corrèze into Unilin Group will allow us to develop our offer both qualitatively and quantitatively. We are therefore delighted to join forces with Unilin Group to better serve the market.”
Bernard Thiers, CEO of Unilin Group, explained: “Panneaux de Corrèze has a particularly strong team. I am delighted that we can welcome just over 100 new colleagues to our group. We are determined to strengthen our position in France. This agreement and our joint commitment to share our knowledge and expertise with each other are important steps forward in this regard.”
In contrast, the Finsa owned Mediland MDF facility in Morcenx, south-west France closed, ceasing production at the beginning of 2021. The mill, formally owned by Willamette Industries and then Weyerhaeuser Co, was a part of Finsa France SAS.
Whilst MDF production ended at the site, the Morcenx facility has become a strategic distribution point in France for Finsa’s wood-based panel products coming from Spain.
The consequence of these recent developments means that Unilin Group is now the sole producer of MDF in France.
In Spain and Portugal investment in new technology continues and Finsa is installing Dieffenbacher glue-saving technology in two production lines in Nelas, Portugal. As a pioneer in the manufacture of particleboard and MDF on the Iberian Peninsula, Finsa is purchasing four glue-saving systems from the German machine and plant manufacturer Dieffenbacher for two production lines.
Two PROjet systems will help reduce glue consumption in MDF production. Another PROjet and an EVOjet P will be used in a line that produces boards with a particleboard core layer covered top and bottom by MDF surface layers. The PROjet will be used in surface-layer gluing, whereas the EVOjet P will be deployed for the core layer.
“We’ll achieve high glue savings in both our lines with the Dieffenbacher gluesaving technology, so that our investment will pay off very quickly,” said Sérgio Filipe, technical manager at Finsa. “Our previous projects together and our experience in the pre-project phase convinced us that Dieffenbacher is the right partner to help our retrofit project in Nelas move forward,” he added.
PROjet is an MDF blow-line gluing system designed to deliver resin savings of up to 15% compared to conventional blow line technology. It is applicable for both UF and MUF resin. With PROjet, MDF manufacturers can produce board surfaces with fewer resin spots. Installation and start-up of the four Dieffenbacher glue-saving systems are scheduled for late summer.
Kronospan has emerged in recent years as a powerful player in the Iberian Peninsula and it now competes seriously, with the long established and locally based groups. One of the company’s goals remains to increase its market share in Spain and Portugal by 20%-30% whilst still consolidating its export markets.
In the Benelux countries and Germany, the MDF markets remained strong, Wood-based panel and surface material manufacturers have benefited to varying degrees from the upswing in European markets, which has now lasted for more than a year in many areas, although the degree to which this is true depends on the product range and portfolio, the markets they served and their sales and pricing policies. Companies with the right focus enjoyed much stronger growth in revenues and earnings than the industry average in the last year.
This cash flow naturally can be used for major investments in the years ahead. It is already apparent that a few wood-based panel manufacturers will use a large part of the earnings generated this year to make major investments. Their varying paces of expansion will make the differences from one company to another more pronounced, at least in the medium term. Kronospan may well continue to set itself apart from the rest of the industry by building new sites in eastern and southern Europe, expanding several central European locations, and carrying out more acquisitions.
Kronospan Holdings plc, based in Nicosia, Cyprus, became the sole owner of the Austrian firm M Kaindl OG, headquartered in Wals, Salzburg, during the first half of the year. A short time later, Kronospan reportedly got the approval to acquire Polish mills from Pfleiderer Group BV & Co KG, based in Neumarkt, Germany, in a sales process that had been going on for some time.
As well, Homanit GmbH & Co KG, a subsidiary of Homann Holzwerkstoffe GmbH and a leading supplier of thin, high-quality finished medium-density (MDF) and high-density (HDF) fibreboards, announced in December 2021 extensive investments in its site in Losheim am See (Saarland, Germany) at a works council event. The event was attended by the company’s local staff as well as by representatives of the IG Metall trade union and the economics minister of the Saarland, Anke Rehlinger.
The planned investments include a new fibreboard press as well as further accompanying measures for the finishing of fibreboards in the total amount of €65m.
“Long-serving employees with excellent know-how work at our site in Losheim am See,” said Fritz Homann, managing director of Homann Holzwerkstoffe.
“The investment decision clearly reflects our commitment to the location and will help secure the existing jobs in the long term. The investment, which comprises not only a new production line but also exhaust air purification technology, demonstrates our ambitions in the area of sustainable and climate-friendly production.”
The geostrategic location of the plant was one of the key factors for the comprehensive investments. The Losheim am See plant, which primarily serves the doors industry, benefits from a good supply of raw materials, as it co-operates with regional and sustainable forestry operations and maintains long-term relationships with its suppliers. To further benefit from the advantages of the location and to ensure a sustainable value chain, the company is currently also pushing ahead with the reactivation of the existing track system.
Initial preparations for the modernisation are already under way. The aim is to start production in two years’ time. The extensive replacement investments promise stateof- the-art technology at the Saarland site and hold the potential for an expansion of production capacity, while at the same time reducing emissions thanks to an energy-efficient production process.
In the UK and Ireland, there were no new capacity investments or changes from the three main MDF players West Fraser (formally Norbord), Kronospan and Medite (Coillte) and all had strong order books in 2021.
But the change in corporate ownership as previously reported has evolved with Norbord being acquired by West Fraser of Canada in an all-stock deal worth US$4bn. The closing of this transaction was in February 2021.
“The opportunity to acquire a world-class leader in production of low-cost, high-margin products is a perfect complement to our product portfolio,” West Fraser president and chief executive officer Raymond Ferris said in an interview with BNN Bloomberg.
“It really lays the groundwork for us to be just a complete supplier to our customers.”
Ferris added the acquisition provides the company with an opportunity to enter the European market.
“Norbord’s had a very successful strategy and a good growing footprint in the UK and Europe, and we’re excited to be a part of that,” he said. “We do think that that’s an area for further potential.
“The scale, the market cap of the company and liquidity of the company gives all of our shareholders more options on where they want to put their money,” said Mr Ferris.
Two of Norbord’s current independent directors joined the West Fraser board once the deal completed.
Mr Ferris continues as West Fraser’s chief executive, while Norbord’s Peter Wijnbergen has been appointed president of engineered wood, and responsible for the company’s OSB, plywood, particleboard, MDF and veneer operations. Sean McLaren, West Fraser’s vice-president of US lumber, was appointed president of solid wood, responsible for all the company’s lumber operations.
West Fraser received the approval of the New York Stock Exchange (NYSE) to list the West Fraser shares. The West Fraser shares commenced trading on February 1, 2021, on the NYSE under the stock symbol “WFG”. Concurrent with the commencement of trading on the NYSE, West Fraser’s stock symbol on the Toronto Stock Exchange (TSX) was changed to “WFG”. The Norbord shares were delisted from the NYSE prior to commencement of trading, with delisting from the TSX following at the close of markets on February 2, 2021.
Medite (Coillte) in the Republic of Ireland continues to pioneer, develop, and bring to market a variety of new and added value MDF products. Strong demand with a corresponding shortfall in supply has led to significant price escalation. Also, with the intriguing fibre modified Medite Tricoya Extreme Durable MDF for external use, the company continues to make further interesting market penetration, competing in many cases with non-wood elements, particularly in the construction sector.
Updating the news from last year, we can report that Accsys, the fast-growing company that combines chemistry and technology to create high performance, sustainable, wood building products, is set to complete the construction of the world’s first Tricoya woodchip acetylation plant in Hull in the UK.
Panels made from Tricoya wood chips (www.tricoya.com) by Accsys’ customers have unique properties and advantages: they can be used in applications and environments that are typically unsuitable for traditional MDF panels, opening new design and construction possibilities.
The enhanced performance and durability of Tricoya panels also reduces the lifetime environmental footprint, storing carbon for longer and substitutes other carbon intensive materials without the renewable properties of timber. The Tricoya panels are virtually immune to swelling, shrinking, warping or deterioration from water, and have a 50-year warranty for use above ground.
Accsys currently manufactures Accoya acetylated solid wood at its facility in Arnhem, the Netherlands, and produces Tricoya elements by processing Accoya into Tricoya wood elements. The Hull plant will mark the company’s progress into a multi-site production organisation when it is complete. This plant forms a part of Accsys’ ambitious growth strategy that is targeting 200,000m3 per year production capacity by 2025 (FY2022 ~60,000m3 per year), including the construction of an Accoya plant in Tennessee, US with joint venture partner Eastman.
The Accoya plant in Arnhem is also undergoing expansion, with an addition of an acetylation reactor, bringing the number of reactors to four. The Arnhem and the new Hull plant will together see Accsys double its present operating production capacity of 60,000m3 to 120,000m3 in 2022, a significant milestone in the company strategy.
Accsys also has a Tricoya user licence agreement with Finsa to produce Tricoya modified wood-based panels. The agreement is a breakthrough for Accsys, with Finsa, now the second producer of Tricoya panels. Ireland-based Medite is of course the other existing producer. Under the agreement, Finsa is granted exclusive rights for manufacturing Tricoya panels in Spain and Portugal, with non-exclusive distribution rights in other territories.
In the Nordic region (Sweden, Norway, Denmark, Finland) there are no production facilities for MDF, but the influence of the well-known Swedish furniture group IKEA, in terms of global design trends in the competitively priced self-assembly sector, remains influential and interesting. As is understood, international supply of MDF remains somewhat unpredictable given the disturbances in the aftermaths of Covid-19 and we understand from them that MDF will generally be used where milling or shaping naturally demands MDF. Since this is also often connected to more expensive surfacing such as spray coating and membrane pressing, MDF is only used where it is appropriate and really needed.
A very high-quality core and smooth faces allow detailed machining and high-quality finishing, but weight issues continue to dominate selection of materials. For certain components, MDF with a density of less than 500kg/m3, whilst maintaining high quality, is finding favour alongside higher density items of 700kg/m3-plus, for special use. Also, products produced as sandwich elements (core honeycomb with surface 2.5mm or less HDF) are helpful when weight issues need to be addressed in the final furniture product and recycling of products becomes ever more important within the circular economy.
Also, IKEA states that it intends to use more recycled fibre in MDF manufacturing as well as promoting the introduction of fossil-free binders. This development is focused on PB with a smaller number of initiatives in the fibreboard arena currently.
The issue of recycling MDF at the end of its use remains an important topic of research in Scandinavia and elsewhere and the wood sector will benefit commercially and technically from new recycling methodology, currently being developed and seen in other industries.
This is all evolving in different places around the world and with varying pace with interesting pioneering developments particularly being seen in Italy and at MDF Recovery Ltd in the UK.
Furniture production in the Baltic states, Poland, the Czech Republic, and Romania were all reported to be strong – all continually fuelling demand and positive news for the MDF sector.
For Russia, respected industry experts, newsletter Euwid and WBPI’s Russia correspondent, Eugene Gerden, have both reported widely on the region. Added to the 2021 main listing now is Kronospan’s MDF investment in the city of Lydinovo in the Kaluga region with a capacity of 350,000m3. The MDF/HDF investment at Vladimir – capacity 424,000m3, by the Turkish wood-based panel and laminate flooring manufacturer Yildiz Entegre Agac Sanayi Ve Ticaret AS, headquartered in Kocaeli continues, is under construction and may be operational later in 2022.
Also, LLC Luzales has been constructing an MDF facility near the city of Syktyvkar in Russia and the new plant is expected to be commissioned during 2022 with a planned capacity of 270,000m3.
So, looking ahead for expanded and new capacity in 2022 and beyond in Europe as a whole, we have the lines mentioned previously with Germany’s fibreboard maker Homanit, which unveiled plans to invest some €115m in constructing a new 310,000m3 MDF production facility for the company at Pagirai near Vilnius, in Lithuania, Russia at Vladimir (424,000m3) by the Turkish wood-based panel company Yildiz Entegre, and LLC Luzales at Syktyvkar (270,000m3).
Add to these the MDF investment in Turkey, Starwood at Inegol (two investments) plus Kastamono Balikesir with 550,000m3, the Slovakian Kronospan MDF mill in Zvolen, with a planned capacity of 450,000m3 and you have the up-to-date picture.
Taking our main table listing from 2020, which shows a total installed capacity of 28,931,800m3, and then fine-tuning information with adjustments and corrections and with new capacity already installed in 2021, we reach the total of 29,526,800m3. Then, with the future new mills listed in Table 1 European capacity development, we now have a forecast figure of 32,305,000m3 as the total European capacity for 2022 and beyond.
NORTH AMERICA CAPACITY
In the US and Canada overall the year in terms of production and sales of MDF showed continued momentum in 2021 with product in short supply and prices rising fast. Prices for commodity building products like lumber, softwood plywood and OSB are still volatile but industrial products like MDF and PB, TFL and hardwood plywood (now in short supply) have steadily increased to record levels for nearly two years now.
The industry reported virtually every MDF mill running at capacity, driven particularly in the US by the strong dynamic of the domestic housing market and the recovery after a slow down earlier in the year.
Despite the lengthy shortage of industrial panels, there have been no formal announcements of new mills. This is almost unprecedented as normally when a product is in short supply for an extended time, there are numerous announcements for new, recommissioned, and/or expanded mills. Many are announced to scare off others with similar intentions, but at least some of the announcements come to fruition.
The issue appears to be the inability to secure a long-term raw material supply. Once abundant, primary mill residuals are now in high demand since wood (pellets) as an energy source became more favourable than fossil fuels or coal, at least from a carbon footprint and global warming standpoint. It seems like every week a new pellet mill is announced in south-eastern US, with most of the product destined for Europe and Asia to a lesser extent. These pellets mills are now not only using forest residuals but mill residuals as well.
Because mill residuals were so available and relatively cheap, North America has failed to embrace the idea of using roundwood like South America, Oceania, or Europe (Ireland). The use of recycled wood, which is common in Europe, has so far been avoided in North America.
If more mills are to be in North America, using roundwood, recycled wood, or biomass may be necessary.
It has been reported that the small town of Libby, Montana has announced plans to possibly convert an old factory building to an MDF plant using forest residuals. The plans include the purchase, relocation, and recommission of an old, very small, facility in Dubuque, Iowa.
County commissioner Mark Peck announced potential plans to establish an MDF factory near Libby, that could employ upwards of 150 people. While touring the Lincoln County Port Authority with governor Greg Gianforte on May 21,2021 Mr Peck said efforts have been under way for a year to restore ownership of a large building on the property, commonly known as the Stinger building, to house the plant.
Mr Peck said a company also had expressed interest in establishing a small diameter mill, but he could not offer specifics.
To outfit the MDF factory, county officials are planning to bring in equipment from a plant in Dubuque, Iowa. Mr Peck said the county has contracted an engineering firm to inspect the machinery and will be relying on a private-public partnership to bring the equipment to Lincoln County.
He anticipated the plant would employ roughly 40 workers per shift. Factoring in transportation and supporting work, MDF operations could create between 150 and 200 jobs. Mr Peck said the plant could be running as soon as next year.
Officials are working with MoFi, a non-profit, non-bank lender, on market tax credits. Mr Peck said the facility would be worth more than US$40m. However, industry insiders in the US for now, feel it is doubtful it will ever come to fruition.
Imports into the US of Asian furniture continues and while furniture manufacturing in North America has been growing again, it appears it will be some years before it returns to turn-of-the-century levels. Housing starts were improving steadily and the remodelling market remained strong with consumer purchases growing.
To update the main listing, the GP Mount Jewett mill continued to run well as did all formerly listed Flakeboard MDF mills in the US and Canada, now re-named Arauco North America in our listings.
The Medite MDF mill in Medford Oregon has operated well in 2021 under the ownership of Roseburg. The Medford, Oregon plant is a well-run facility, and the acquisition represented a key strategic move for Roseburg in their evolving composite panel business, ahead of the Pembroke, Canada purchase and then the Potlach Deltic Corp, 265,000m3 MDF mill, at El Dorado, Arkansas.
The investment project by Swiss Krono for the new HDF/MDF plant at its facility in South Carolina has progressed successfully and is running well. The Swiss Krono plant at the Barnwell site has been expanded extensively to strengthen the HDF and laminate divisions throughout the Group. The new plant has a production capacity of around 280,000m3 of HDF, which is intended primarily for laminate flooring production in the company’s own plant. The new plant added an additional 26 million m2 capacity. With these actions, Swiss Krono Group is responding to the growing demand on the American market for high-quality laminate flooring.
US RICE STRAW MDF PLANT IN FINANCIAL DIFFICULTY
The new CalPlant 1 (formerly CalAg – Eureka MDF) project rice straw-based medium density fiberboard plant in California was the most dynamic news feature for us to report on last year from the US as plant based raw materials start to emerge as viable and alternative raw material sources other than wood. The project was in development for more than 20 years, since the principals first shipped California-grown rice straw to England for testing.
In November 2020 CalPlant 1 started up production and officially launched the Eureka MDF brand – the world’s first commercially produced, no-added-formaldehyde, rice straw-based MDF. But before reaching full production capacity (248,000m3), the company has filed for Chapter 11 bankruptcy in the federal court in Delaware.
The US$400m project on 276 acres in Willows, California, required decades of engineering work and financing guarantees to move its four-year construction toward commissioning in March 2020, when the Covid-19 pandemic began. But CalPlant entered into a voluntary Plan Support Agreement with its senior bondholders while pursuing a sale of the company, according to an October 5, 2021 filing announcement.
The plan calls for a comprehensive financial restructuring of the company’s debt and investment resources.
The company will continue to operate without disruption to vendors, customers or employees and has sufficient liquidity to meet financial obligations throughout the restructuring, it said.
CalPlant has secured commitments for up to US$30.1m in debtor-in-possession financing from senior bondholders to support the business during the process.
Subject to court approval, CalPlant estimates that “substantially all trade vendors” who will have an ongoing business relationship with the company will be paid for goods and services in the normal course of business without interruption. The initial court filing did not list assets or liabilities.
“The road to fully commissioning our plant has not been smooth,” said Jeffrey Wagner, CalPlant’s executive chairman, in a statement, citing the pandemic adding to the usual challenges of a first-of-its-kind start-up.
“We are confident that leveraging the benefits of the Chapter 11 process will allow us to emerge with a stronger financial structure that enables us to continue leading the manufacturing industry with innovative sustainable MDF.”
The plant had scaled to produce 600 truckloads of MDF by September 2021. While operational since producing its first board in November 2020, it still has not reached full capacity.
To assist in plant construction, German engineering firm Siempelkamp guaranteed lenders as to the volume and quality of MDF boards while Columbia Forest Products, an equity partner, guaranteed the sale of boards at a minimum price for 20 years.
With a competitive market for MDF products, boards had been selling as fast as they could be produced, CalPlant founder Jerry Uhland told the press in September 2021.
The mill was designed to produce MDF in thicknesses of 2-30mm and many believe the project to be the first serious attempt of its kind, noting the investment, research and development, and roster of industry veterans who had thrown their weight behind the project.
Rice straw is an annually renewable raw material, with all the material for the plant being procured each year within a 15–20 mile radius of the plant site from Sacramento Valley rice growers. The Sacramento Valley is an area that produces 20% of the country’s rice in the US.
CalPlant is being advised in the bankruptcy, restructuring and sale by Morrison & Foerster LLP and Paladin. Once more news on future ownership and financing is available this will be reported on by WBPI
CANADA GREAT PLAINS WHEAT STRAW BASED MDF PROJECT MOVES FORWARD IN ALBERTA
In further developments utilising alternative non-wood raw materials, Great Plains MDF announced it has selected a site for its greenfield wheat straw-based MDF plant and has added two industry veterans in Lanny Hammock as vice-president, sales and marketing and Wade Gregory as vice-president operations to its team and has now also formed an alliance with a major construction firm.
The company says the plant with a design capacity of 849,000m3, will be built in Kneehill County in Alberta, Canada. The site, which is in Equity, between Three Hills and Trochu, will house the proposed production facility and storage of wheat straw. The site is approximately 90km (56 miles) from Red Deer, Alberta, and 140km (87 miles) from Calgary, Alberta.
The Great Plains development plan will see Great Plains pursuing permits with all the appropriate regulators (government of Alberta, local municipality) in the coming months.
Great Plains Innovations is the parent company of Great Plains MDF – Three Hills, which will build, own, and operate the mill. Great Plains Innovations intends to build a series of similar facilities across the Canadian prairies and elsewhere over the next 10 years.
Great Plains MDF reports it has spent years researching and developing a process to make high quality medium density fibreboards out of agrifibres, using no-added formaldehyde.
Earlier, Great Plains MDF announced it has signed a partnership agreement with PCL Construction toward the building of the wheat straw MDF plant. Great Plains and PCL expect to complete their pre-construction work over the next few months.
PCL is a group of independent construction companies that carries out work across Canada, the US, the Caribbean, and in Australia. Together, these companies report an annual construction volume of US$9bn, making PCL the largest contracting organisation in Canada.
So, to conclude, Great Plains MDF is in the final contract stages and hopefully will be able to break ground initially this autumn before the snow starts falling, with significant construction starting in spring of next year.
There have apparently been some statements made about another potential straw-based MDF plant in Alberta, but there is no viable support for it, and there is seriously doubt it will ever happen.
MEXICO
In Mexico and to complete our North American overview, we see the three projects there that we highlighted previously progressing well, with all of them being fully operational.
And with the South America based wood-based panel giant Arauco, buying Masisa’s Mexican mills in a US$245m deal, which included the 220,000m3 MDF operation in Durango, it completes the ownership picture.
Total nominal production capacity of the MDF plants in Mexico has been adjusted up to 823,000m3/year, such a significant change from the small capacity of less than 80,000m3, which had been stable, for such a long time previously and only a few years ago.
The latest news is that Celulosa Arauco y Constitución plans to double the MDF/HDF capacities of Arauco Industria de México by installing a production line at the Mexican site in Zitácuaro (Michoacán).
The company plans to invest around US$200m in the project, which was announced at the end of October 2021. Production is expected to commence during 2024, depending on the progress of the approval procedures still required.
To date, Arauco México has produced raw and coated particleboard at the Zitácuaro site. The plant has belonged to Arauco since the company took over most of the activities of Maderas y Sintéticos de México; this was concluded at the end of January 2019. The transaction, which had already been agreed in principle in mid-December 2017 and was subsequently adjusted several times, had additionally included the particleboard and MDF/HDF facilities in Durango.
Following the takeover, the production capacity of the two sites was indicated at 339,000m³ particleboard and 220,000m³ MDF/HDF. The MDF/HDF facility in Durango, supplied by Dieffenbacher, has been operational since the first quarter of 2016.
The main incentive for the companies, that together have invested more than US$400m so far in state-of-the-art manufacturing facilities, is the very promising outlook in the Mexican market.
Until quite recently, no continuous process plants existed in Mexico and per capita consumption remained very low compared to most countries. Also, the Mexican furniture industry is characterised by a comparatively high use of solid wood and plywood in relation to particleboard and MDF. Therefore, the perceived opportunities towards the continual future increase of MDF in the Mexican furniture manufacturing industry remain extremely positive.
Mexican wood panel producers are still driving several market development initiatives, which are gaining momentum and are at the forefront of a campaign to promote wider use, particularly of MDF, by the national furniture industry.
The panel makers are continually educating Mexico’s furniture designers (both current ones and young students) and manufacturers in the potential and versatility of working with MDF which, with its workability, is a natural substitute for traditional solid wood.
Total North American installed capacity for 2021 and 2020, is still recorded at 5,818,000m3 down from the 6,129,000m3 shown and recorded for 2019 when considering and taking account of the various mill closures detailed since then.
Now, with the Mexican capacity installed and operational, along with the futuristic and large Canadian wheat straw-based MDF project, our table showing future capacity gives a forecast figure of 6,887,000m3 as a total capacity for the North American area for 2022 and beyond.
