Adding value!

Yildiz Entegre currently has three major areas of business: chemical, port facilities and forest products. It will also soon add shipbuilding to its activities on a site already acquired on the Marmara sea near Istanbul; then it can import chips for its panel lines in its own vessels.

The chemical side of the business produces nitric and phosphoric acids, fertilisers and ammonia. It also has six plants producing urea formaldehyde.

In the ports business, Yildiz Entegre owns and operates a port 30km from Kocaeli, the site of its panel business, in the direction of Istanbul.

Yildiz Entegre (not to be confused with Yildiz Sunta, or Starwood, separate and unconnected panel making businesses belonging to the same wider family) decided to enter the panel making business in 2000 and produced its first MDF panels in mid-November 2002.

In fact, prior to building that line, Yildiz Entegre partnered family panel businesses Starwood and Yildiz Sunta but then separated the businesses and itself focused on chemicals for some years.

The press chosen, as so often in Turkey, was a Siempelkamp ContiRoll continuous unit which is 55.3m long and was the longest press in the world at the time. It is fed by a Pallmann 62in refiner.

“This was a successful project for us and we reached a capacity of 1,000m³/day, in three-shift production, within three months of start-up,” said director Hakki Yildiz proudly.

In terms of value-added products, Yildiz Entegre has not just followed the normal routes of melamine facing or surface printing, but has concentrated on some less common niche products.

In 2003, the company invested in a Homag of Germany line to produce MDF profiles for furniture components as well as items such as skirting and architrave. Capacity is 40 million pieces, 2.8m long.

In 2004, the company decided to invest again and this time chose to buy a second MDF production line, identical to the first with Siempelkamp press and identical Pallmann refiner to line one, to produce panels up to 60mm thickness. This second line has the additional feature of a pre-heater, which Mr Yildiz said is the only one in production on an MDF line.

With the two lines running, Yildiz Entegre was now reaching a total capacity of 2,000m³/day, although in reality, said Mr Yildiz, the company is doing better than that, averaging around 1,200m³/day from each line.

“We made this investment because the market was growing and we also focused on value-adding again in 2004, investing in a Homag line to produce laminate flooring. The capacity of this line is six million m²/year,” said the director.

Again in 2004, the company invested in additional capacity for its MDF profiling line.

“In 2005 we had our second MDF line capable of producing thick boards very effectively, so we decided to invest in a solid MDF door line and we produced our first finished door in January 2006. Capacity is now one million doors a year.”

Some of the door production is of flat panels, but, because the second line can produce MDF in 40mm thickness, the company also purchased a Homag CNC routing line to machine profiles into the faces of the doors and a Wemhöner membrane press line to apply special PVC foils to the door surfaces. Doors are also offered with cut-out, glazed, panels.

“Also during this period, we invested in short-cycle presses and today we have four Wemhöner lines in operation producing melamine faced MDF,” said Mr Yildiz.

“All these value-adding processes take quite a lot of volume from our raw MDF production, but there is still a good market for raw board in Turkey and so we decided to invest in a third MDF line. We signed the contract in August 2006 and produced the first board in October 2007. It is identical to the other two lines in having a 55.3m ContiRoll, although only the second line has the pre-heater for producing those thick boards.

The wood preparation equipment – chippers and refiner – were from Pallmann and replicated the equipment supplied for lines one and two.

“This brought us to a total capacity of 3,500 to 3,600m³/day and we became the biggest-capacity producer of MDF, under one roof, in the world,” said Mr Yildiz proudly.

The incredible investment run at Yildiz Entegre didn’t end there, however.

“In 2007, we decided to invest in a doorskin project and signed the contract, again with Siempelkamp, for a line with a capacity of 11 million doorskins per year, equivalent to 400m3/day,” said the director.

As for all the other lines, Pallmann was chosen as the supplier of the refiner for the doorskin line and Yildiz Entegre purchased a 46in unit this time.

“This was only Siempelkamp’s second doorskin line, but the first was some years ago and so this was really their first and was to a completely new design – we trust Siempelkamp in this.

“The line will be installed here at this site and we are also ordering a painting line so that we can coat the doorskins. At first we will just produce the skins, but ultimately we will produce the complete door here,” said Mr Yildiz.

The doorskin line was ordered in July last year and delivery was expected in March, with production in June this year – the foundations and building are already in place.

That is still not the end of the investment story at Kocaeli.

“Also in 2007, we decided to go into the manufacture of printed panels and ordered a continuous printing line from Hymmen of Germany, to produce furniture panels and flooring, with a 30 million m²/year capacity.

Again in 2007, Yildiz Entegre invested in decor paper impregnation and now has two Vits lines under installation. “Entegre means integrated and so this completed our integration in MDF,” said Mr Yildiz proudly.

But a third line is to be ordered soon. The company will then offer its own exclusive decors, having previously bought them in from Starwood.

A second flooring line will also be added, at double the existing line’s capacity of six million m2, and giving a total of 18,000m2.

That just left particleboard – a panel which Yildiz Entegre did not produce – and so the company ordered another ContiRoll line in June 2007.

“This was intended to go into production in August this year, but in the meantime we decided to find a new location closer to the wood supply and to reduce the strain on logistics at the Kocaeli site with such a large total capacity. We have selected a site for the 2,000m³/day particleboard line more to the south of Turkey and we will go into production in 2009,” said Mr Yildiz.

Currently, wood supply is 40-50% from the local market, depending on the season; 20-25% logs from Ukraine and Russia; and around 30% as chips from Brazil and the US.

“We will increase our imported chip volume and other [panel] producers should do the same,” said the director. “Ukraine and Russia will find it impossible to go on increasing their volumes and they may in fact decrease. Domestic supplies will also not increase.

“Of course, although our particleboard mill will be closer to the raw material, it will be further from the markets – 65-70% of the population is in the far west of Turkey. So, we had to decide whether to import the wood and be closer to the market, or use domestic wood supplies and be further from the market. In Turkey, the supply of wood really is a big issue,” said Mr Yildiz.

“Our third MDF line is still ramping up to full production and Starwood, Kastamonu (City), and Turanlar will all be coming to the market with new capacity in 2008, so we do not know what will happen to the market then.

We will have added 1,200m³/day, Starwood 600m³, Kastamonu 1,200m³ and Turanlar 600m³. That’s 3,600m³ in total and until recently the capacity in the whole of Turkey was less than this! So, for the next years we have some doubts about the market.”

That begs the question as to why Yildiz Entegre went for particleboard.

“Some furniture producers want both particleboard and MDF – and surfaced panels in each that match. We were the only supplier that could not offer this service without buying in the particleboard.”

Yildiz Entegre exports mainly to the east – Georgia, Azerbaijan, Armenia, Iran, Iraq, although Romania and Bulgaria are also joining the customer list, as are parts of north Africa such as Algeria, Libya, Algiers and Morocco.

“In order to use our increasing capacity efficiently, our sales people will attend all the fairs,” said Mr Yildiz. “The domestic market is becoming over-supplied now and we have to rely more on exports. We are lucky because we have so many different products to offer to the market.”

For the future, Yildiz Entegre has decided to stop investing in Turkey and look further afield. “We have chosen some land in the south of Russia and will buy in the next few weeks. We also have permissions in Iran and have chosen some land there.

“We will order the machinery for those plants in the coming months and will start building a bagasse MDF line in southern Iran this year and we have already reserved production space with Siempelkamp for Russia and Iran. The Iranian machinery will be shipped in November/December this year and that for Russia is reserved for May 2009.”

The Russian line’s ContiRoll will probably be another 55.3m unit, while the Iranian line will be shorter – around 42m – for a capacity of around 550-600m³/day.

Pallmann will receive the contracts to supply chippers and refiners.

“We have only been in the panel industry for six years, but I am proud to say that we have become the first in sales, capacity and product variety,” said Mr Yildiz. “I do not know of another company that has invested so much – e550m – in such a short period.

“We like this business and last year we achieved a turnover of e465m in our wood based business.”