The sun shone on ‘Dublin’s fair city’ as around 150 international delegates gathered in the Republic of Ireland’s capital for the AGM of the European Panel Federation (EPF) on July 3 to 5, 2013.
After two days of heavy business meetings for the members, and an excellent gala dinner for all at the Jameson’s whisky distillery (sponsored jointly by Tricoya, Siempelkamp and Pöyry), the president of the EPF, and some sponsors, addressed delegates and the invited members of the press.
Kris Wijnendaele, director general of the EPF, welcomed everybody to the meeting and introduced EPF president Ladislaus Döry, who then presented the annual report of the federation.
"We have members in 25 countries and represent 95% of the particleboard producers, 99% of MDF and 99% of OSB," said Mr Döry.
New to the federation are the producers of hardboard and softboard/insulation board in Europe, whose own association, FEROPA, has been integrated into the EPF.
The president then summed up the most recent economic developments affecting consumption of wood based panels.
Referring to the ‘Economic sentiment indicator’, or ESI, Mr Döry said that the hoped-for improvement at the end of 2012 was not realised.
The ‘Consumer confidence indicator’ was also low, leading to low consumption of panels because there was not enough money in the market.
The ‘Industrial confidence indicator’ did not give any more reason for cheer, having fallen sharply from 2010, which was itself a peak after the disastrous levels of 2008/9.
"Capacity utilisation rates in the EU27 stood at only 78% in Q2, 2013 and producers need around 85% to start making money," said the president. "Meanwhile, construction confidence is not only not improving but turning downwards and on the ‘Order books indicator’, only Croatia is showing a real increase."
"Last year was not as expected and for 2013, forecasts are being constantly adapted and it is still challenging. ‘Cautious optimism’ is the word, but there is no real optimism and in my opinion, there may be one more year before we start any recovery." Mr Döry then went on to summarise the EPF Annual Report 2012-13.
Particleboard production capacity was down by 1% in 2012 and the EPF estimates a further 1% decrease for 2013.
In 2012, there were plant stoppages or closures in Bulgaria, Italy, Spain, Sweden and the UK and one capacity expansion, in France, while for 2013, there were stoppages/closures in Greece, Norway and Spain and capacity expansions planned in south eastern EU.
Particleboard production fell 5% in 2012 over 2011 but is estimated by the EPF to increase by 1.5% in 2013.
Production capacity for MDF fell by 1% in 2012 and the EPF estimates no change in 2013. Major closures in 2012 included Spain and Sweden.
MDF production in Europe fell by 5% in 2012 over 2011, while consumption of this panel fell 3% in 2012 and is estimated by the EPF to show no change in 2013.
All the foregoing estimates exclude Belarus and the Ukraine.
The brighter story in the European panel industry was from the OSB sector, with production capacity in 2012 rising by 6% over 2011, with a further 6% forecast for 2013, excluding the Ukraine.
New capacity was added in Italy, with the first 100% poplar OSB plant going into commercial production in January 2013. New capacity is also planned for Bulgaria.
However, production of OSB in Europe in 2012 still fell by 2.3% over 2011, according to the EPF figures.
Meanwhile, the new member, hardboard, showed a 1% increase in production, with +7% in home sales, but minus 3% in exports. Total installed capacity in 2012 was 1.226 million m3.
Installed capacity for softboard was reported at 3.5 million m3 for rigid board and 2.2 million m3 for ‘flex’ board.
The Federation’s ‘Wood availability indicator’ at end-2012 showed "critical" levels in the UK and Italy and a "shortfall" in most of western and central Europe. Scandinavia and the Iberian peninsula showed "sufficient" availability.
Turning to the vexed issue of biomass and its use in energy generation, Mr Döry said: "Most EU member states are not going to reach the set targets [for biomass energy generation] but the price development has already fully impacted the market. Even higher subsidies will probably be necessary in order to reach the [biomass energy] targets.
"In some countries the subsidies are so high it is a good business, with Sweden having the highest subsidies. Austria, Bulgaria, Denmark, Finland, France and the UK all have higher-than-necessary remuneration".
Mr Döry went on to outline developments in the wood pellet business, with global demand forecast to reach 80 million tonnes by 2020, according to one estimate. He said a figure nearer to 50 million tonnes was actually expected.
"One of the most shocking figures is that the UK alone is expected to demand 20 million tonnes of pellets by 2017," said Mr Döry.
"Wood costs have risen by more than 30% since 2006, largely due to biomass demand. Is there enough wood for all? According to Hamburg University’s research, if wood mobilisation is high, there will not be enough wood by 2016/17. If it is medium, it will be approximately 2020.
Indirect land-use change (ILUC) refers to an effort of the EC to update two directives: ‘Fuel quality’ (2008) and ‘Renewable energy’ (2009).
"The European woodworking industry is not opposed per se to the use of wood as fuel, BUT is opposed to the provision of subventions [subsidies] that either directly or indirectly support the procurement of the fuel which in turn puts established wood processors and manufacturers at a competitive disadvantage and ultimately leads to a loss of investor confidence in such industries," said Mr Döry.
The EPF, together with CEI-Bois, EOS, FEP and FEFPEB have been working tirelessly to put the position of the woodworking industries in regard to biomass wood consumption to ILUC and have achieved some positive amendments. The Joint Research Centre (JRC) is The European Union’s scientific and technical research laboratory and an integral part of the European Commission.
Conclusions from its report (which took account of recommendations from EPF et al) were that: "Concluding from the studies analysed, it emerges that, in order to assess climate change mitigation potential of forest bioenergy pathways, the assumption of biogenic carbon neutrality is not valid under policy-relevant time horizons (in particular for dedicated harvest of stem wood for bioenergy only), if carbon stock changes in the forest are not accounted for.
"When wood is used in a cascade, then climate mitigation can be achieved in much shorter times than when wood is used purely for energy. Moreover, with the proper measures (long storage, substitution of carbon-intensive material and fossil fuels), the payback time can even be shortened to zero, as compared with the centuries indicated for energy use only".
Mr Döry summarised with some positive news: "The EU’s decision to include harvested wood products in new carbon accounting rules [LULUCF national action plans] acknowledges carbon storage properties and encourages governments to replace more energy-intensive materials with wood [in construction etc]".
The EU adopted the final text on April 22, 2013.
"The long-term strategy," said Mr Döry, "is to get a global coalition to improve the international carbon accounting schemes (post Kyoto) so they will fully recognise carbon storage in harvested wood products, including substitution effects."
Following the presentation of the EPF annual report were sponsor presentations.
Speaking for Tricoya Technologies Ltd, ceo Paul Clegg outlined the story of the production of the company’s acetylated wood products, which give remarkable durability to wood products, including Medite’s Tricoya MDF panels.
Then Gerry Britchfield spoke about ‘Commercialising Medite Tricoya’, which is produced on Medite’s existing conventional MDF line.
Jürgen Philipps of Siempelkamp gave a presentation on the OSB line supplied to Kalevala in Petrzsaravodsk, Karelia.
Stage one of the line was inaugurated in late June with a capacity of 250,000m3/year and phase two will double that capacity in due course.
Dr Cormac O’Carroll, Pöyry Management Consulting in the UK, gave a presentation on ‘The outlook for MDF in Europe’.
He concluded that: "MDF is a local business with regional competitive dynamics. Profitability drivers cannot be understood by looking at the business on a European level. They cannot even be explained by national level analysis. We need to understand the impact of these trends on a mill-by-mill basis".
Jens Böttcher of Sasol Wax explained the role of wax in panel production and said that supplies from oil were dwindling rapidly. The company thus produces synthetic waxes, which also have lower VOC emissions, and has developed microparticle waxes, which he said are more efficient than conventional ones.
Kari Simolin of Dieffenbacher was the next speaker and he outlined the company’s recycled wood preparation concept.
Dr Georges Francis of Advachem talked about the company’s production of MUF and UF resins to meet CARB2 and F**** grades and its production of a successful fire retardant additive.
The meeting was brought to a close by Gerry Britchfield of Coillte, who thanked all concerned, but especially Dr Guy Van Steertegem of Fedustria for his long service to the industry. Dr Van Steertegem retired at the end of June 2013.
Also retiring at the meeting, and thanked for his long service to the industry, was Dominique Coutrot, secretary general of the French panel producers’ association UIPP (Union des Industries des Panneaux de Process). M Coutrot is replaced by Olivier Hugon- Nicolas, who has a hard act to follow!
The 2013 EPF AGM was well-attended and the weather was unusually kind for an island battered by the Atlantic Ocean and prone to a bit of rain!
