Global MDF capacity rises

Investment in new MDF capacity continues with Australia, Algeria, Brazil, China, Egypt, India, Iran, Thailand and Vietnam each either announcing or developing new projects.

Following on from Focus on MDF Part 1, our survey of the industry in Europe and North America, we now focus on the existing MDF mills in the ‘rest of the world’ as at the end of 2019 and on those under construction in 2020, or planned for 2021 and beyond.

For the ‘rest of the world’ areas (excluding Europe, North America and Mexico), after a number of updated and corrected data inputs from across the globe, we now show an increase in installed capacity in 2019 of 74,375,000m3, while further investments identified in this region for 2020 and beyond, bring the total up to 77,387,000m3

So, for 2020/21 and beyond, when this significant figure is added to the European future capacity of 29,545,000m3 and the North American figures (including Mexico) of 6,379,000m3 for the same period, we see global MDF capacity growing to 112,461,000m3.

This year’s survey once again provides complete listings of capacity in the various regions and countries as at the end of 2019, plus the growth expected during 2020, 2021 and beyond.

China and North-East Asia

Average annual growth over the past five years has been strong in this region, except for Japan, where GDP growth declined, but subsequently has been recovering more strongly. In 2019, China reported GDP growth of 6.1% with 2% in South Korea and a lower figure of 0.7% in Japan. Projections are still forecasting strong growth into the future from these three nations.

China and North-East Asia’s MDF markets continued to under-perform in 2019 due to a slowdown in global demand and prices remained relatively weak consequently, aided further by a cooling Chinese economy and continual depreciating domestic currencies across Asian countries against the US dollar.

Japanese MDF installed capacity remains at 635,000m3 with 95% of material produced in the form of raw panels and in South Korea installed capacity remains at 2,113,000m3 with Thailand, Brazil and China being the major sources of MDF imports.

China is still forecast to produce 85% of the furniture in North Asia by 2020/21 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 30% of the annual production of furniture in China is exported to a wide range of countries, with the largest volumes destined for the United States, Japan and Europe, while the domestic market continues to grow year on year. As was reported last year, some furniture factories have had to close due to raw material shortages, labour issues, higher wages and dwindling exports and this continues. The drive by the authorities to move industries to inner cities also led to an exodus of some Taiwanese furniture factories from China, relocating to Vietnam.

In China MDF production capacity has grown rapidly in the last decade and opinions about the actual scale and volume of installed capacity varies greatly. As a reference and background, from my articles in WBPI we have shown these volumes historically for China with installed MDF capacity plants where known based on pre- 2014 data from China, plus various industry estimates and also of course adding new investments as announced by equipment companies and manufacturers.

From our numbers and current estimations, we have seen over the past five years capacity increasing dramatically to a huge and impressive estimated 46,457,000m3 at the end of 2019, but some other commentators mention MDF capacity in China as much higher. This remains an open and complex question and there may be many additional small plants with unknown capacity.

Whereas consumption has previously increased so strongly, forecasts are for consumption to increase at an average annual rate of just 1% in the region over the two years out to 2021/22, as China shifts to a focus on more domestic growth in consumption, possibly at the expense of some exports, such as furniture.

From what we have seen, real commercial activity in the Chinese MDF industry has continued to slow as the government tries to rein in the country’s dramatic economic growth of recent years. Looking ahead, the use of rice straw for MDF is an evolution that is starting to be noticed around the world and we have now added the Wanhua plant for MDF in China based on this raw material source, as a future capacity project in partnership with Dieffenbacher. The use of straw as a raw material seems to be an emerging trend with this one now along with the projects in Egypt and California.

New investments that have been currently under construction in China have included the state-of-the-art THDF plant producing ultra-thin boards primarily for use by furniture makers and has been built by Dieffenbacher for Guangxi Lelin Forestry Development Co Ltd with start-up in the second half 2019, so this has been added to the main listing. Guangxi Lelin will produce boards ranging from 1mm-5mm in thickness at the new high-speed THDF plant near Nanning in Guangxi province, with a capacity of 150,000m3. Eucalyptus wood is the main raw material.

Last year we learnt of two more new MDF investment projects for China by Dieffenbacher – one by Hubei Hongyi in Xiaogan and the other by Liuzhou Sanyi in Liuzhou, volumes of both mills and more details are to be announced.

Now as well, we can note two others – new MDF investments by Xianyong Jiafumei Wood Co and Huashi Chaoyang Tech.

News of three more also came from Siempelkamp group, which has supplied complete production lines with ContiRoll presses to Linyi Huan Ge (315,000m3 start-up 2019) Jiangsu High-Hope Arser, (300,000m3 start-up 2019) and Xinyi Dake (144,000m3 start-up 2019 ) in China.

To provide readers with a little more detail, in September 2018 Linyi Huan Ge Co Ltd ordered a complete forming and press line with ContiRoll to produce MDF panels.

The scope of supply included the complete press line – from the mat-forming equipment and the forming line to the 28.8m x 9ft ContiRoll press and including the finishing line with the connected, fully automated, storage system. With this line Siempelkamp delivered the second line to produce thin MDF with a thickness of 1mm to China. The plant can produce a board thickness up to 9mm.

Jiangsu High-Hope Arser Co Ltd ordered a fibre sifter in July 2018 as well as a forming and press line (8ft / 28.8m) with a planned capacity of 300,000m3. Start-up was at the end of 2019.

Jiangsu High-Hope Arser exports products to more than 20 countries in Europe, North and South America, Asia, and the Middle East. With the order for Siempelkamp, Jiangsu High-Hope Arser invested in its first MDF production line. The new equipment will ensure high-quality supply of MDF to produce melamine faced MDF.

With the 28.8m x 8ft ContiRoll press, Jiangsu High-Hope Arser will produce MDF with a thickness ranging from 1.5 – 40mm with a material feed of up to 2,000mm/sec.

Xinyi Dake New Materials Co Ltd ordered a complete forming and press line with a planned increase in its MDF capacity at the Xinyi factory of 144,000m3. Xinyi Dake New Materials Co Ltd is a 100% subsidiary of Huqian Forest Industry & Technology Co Ltd, based in Zhejiang. The Chinese pioneer in fibreboard production has been manufacturing MDF/HDF panels since 1980 and operates two production locations in China, marketing the MDF panels under the brand names SONGCHENG and HUQIAN.

The scope of supply for Xinyi Dake also includes the complete machinery for mat forming, the forming line as well as the 42.1m x 4ft ContiRoll press.

The special feature of this order is the first time Siempelkamp has supplied a 4ft ContiRoll press that can manufacture MDF with a thickness ranging from 12 – 40mm with a quality suitable for milling.

South East Asia

The South Asian economies are still set to be among the world’s fastest growing out to 2020/21. The five countries – India, Indonesia, Malaysia, Thailand, and Vietnam – are still expected to have an average real GDP growth rate of 4% – 5% per year or even higher (pre Covid-19).

In this part of Asia, the MDF market has been generally doing well, driven by increasing demand, rising adhesive prices and some shortages of wood and raw material availability.

In Vietnam, with 1,920,000m3 of MDF capacity installed, Thien Lam Dat JSC and Dieffenbacher co-operated in the completion of the MDF plant in Bac Giang, about 50km east of Hanoi. We understand the press, 8ft wide and 20m long, with planned capacity for the line of 200,000m3 annually, is running well since start up in 2019. The raw material for its MDF production is coming from Thien Lam Dat’s plantations and is mostly acacia wood.

Also, in Vietnam in April 2019, Thanh Thanh Dat inaugurated its new MDF facility built on an area of 18ha in Vu Quang industrial cluster, Son Tho commune, Vu Quang district, Ha Tinh.

The MDF-HDF plant has a capacity of 120,000m3 with an investment of more than 1,440bn dong, led by Thanh Thanh Dat Joint Stock Company as the head investment lead.

This plant is now added to the main listing. After more than two years from the project commencement date (December 2016), the company has made tremendous efforts to overcome difficulties to build and complete the plant and put it into operation.

It has been reported locally that the operation of the MDF-HDF plant is contributing positively to the economic development of Ha Tinh province in general, Vu Quang district and West Ha Tinh mountainous districts in particular, and is helping the process of industrialisation and modernisation in these rural and mountainous areas.

We can also report that FSC Vietnam JSC of Kim Tin Group, which recently began 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 is running well and is also in the main listing.

The facility covers an area of 25ha and has an annual capacity to produce 400,000m3 of MDF, apparently meeting 20% of Vietnam’s market demand.

The construction of this second facility was started in August 2016. The production line and plant is claimed to meet the strictest standards in terms of quality and environment in both local and foreign markets such as the US, Japan and European countries.

Vice-chairman of the provincial people’s committee Nguyen Tien Dung said the province has advantages and potential for developing MDF plants.

In October 2019, the Korean company Dongwha, Asia’s largest producer of engineered wood, ordered a 47.1m x 8ft press. The new, third Siempelkamp plant is designed for processing the demanding and fast-growing raw material acacia mangium.

Already in 2010 and 2015, the company VRG Dongwha, a joint venture of Dongwha International and the Vietnam Rubber Group (VRG), ordered two MDF plants from Siempelkamp. Both plants produce in the south of Vietnam in the greater Saigon area and serve the country’s continuously growing wood-based products market.

The new investment is designed to exploit the specific resource deposits in northern Vietnam in the Hanoi area. Here, acacia is considered one of the most common tree species but it presents board producers with challenges due to its demanding fibre geometry. The ContiRoll Generation 9 NEO press specified has an extended highly flexible press infeed to help with special fibre geometries.

In addition to the forming and press line, board handling and a glue kitchen adapted to the raw material acacia, the scope of supply also includes a dryer and an energy system from Siempelkamp subsidiary Büttner.

After ground-breaking at the beginning of December 2019, delivery/assembly will start in the third quarter of 2020. Commissioning is scheduled for the late summer of 2021.

In Thailand, with 4,673,000m3 of MDF capacity installed, the new MDF plants by S Kijchai Enterprise PCL in Rayong, Thai Vanachai Group and SPB Panel Industries Co Ltd, are all running well, we understand.

In terms of new investments in Thailand, we noted last year the decision by Siam Riso (an existing producer of particleboard in that country) to go ahead with a new MDF project.

The company has selected Dieffenbacher for the press installation for this plant and it is due to start production in 2021/22.

At the end of October 2019, Metro MDF, one of Thailand’s leading wood-based panel producers, confirmed its commitment to Siempelkamp with an order for a new forming and press line for an MDF plant at the Kanchanburi site, replacing a Küsters forming and press line with a new forming and press line for MDF with an 8ft wide ContiRoll Generation 9. The press is equipped with a thin- and lightboard package.

In Malaysia, no new investment plans have been seen and latest MDF mill listing shows with the country capacity now at 1,505,000m3. Apart from domestic sales and Singapore, the Middle East market has been a consistently growing market in recent years, so the importance of this region for export of MDF from Malaysia cannot be under-estimated.

In a recent statement from Johor Baru, Evergreen Fibreboard Bhd (EFB) it 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 production volumes. MDF is still the core business of the company, followed by lamination and furniture-making activities.

As reported last year, Accsys, the fastgrowing and sustainable chemical technology group, continues exploring opportunities for new manufacturing plants outside Europe.

Accsys announced that its subsidiary, Tricoya Technologies Ltd (TTL), had now entered into an agreement with PETRONAS Chemicals Group Berhad (PCG) to evaluate the feasibility of jointly funding, designing, building and operating an integrated acetic anhydride and Tricoya wood elements production plant in Malaysia.

It is envisaged that Tricoya wood elements produced at the plant would use acetic acid from PCG’s existing joint venture in Malaysia.

The plant would then supply the MDF and wood panel industry within South-east Asia, under licence, as the key raw material for the formation of Tricoya panels for use in the construction industry in the region.

The evaluation continues and is expected to include preliminary engineering studies, regional customer and market feasibility assessments and financing arrangements. Under the terms of the agreement, the parties agreed to carry out the evaluation exclusively for a period of at least 18 months.

For Indonesia, alongside traditional highvolume plywood production, we now see MDF to be a substantial product produced in this country, with nearly 1,277,500 million m3 capacity installed over 10 lines. No new investment plans have been seen in the last 12 months and, for reference, two of the largest producers are PT Sumatera Prima Fibreboard and PT Indonesia Fibreboard.

In India we have seen Indian capacity grow by a further 800,000m3 – 900,000m3 in 2018/19 and Greenply Industries’ new line in Chittoor District, Andhra Pradesh at 56m long with its Dieffenbacher CPS at the core of the plant, is the longest continuous press in Asia.

India now has installed capacity of 1,557,000m3, which is significant for a country that not so long ago was heavily dependent on MDF imports. Additionally, the Indian wood-based materials manufacturer Rushil Décor commissioned Siempelkamp as the single-source supplier of a new 250,000m3 MDF plant for it in India.

With the new plant in Vishakapatnam within the Indian state of Andhra Pradesh, the manufacturer will produce MDF from eucalyptus grown in plantations and from over mature mango trees. To meet local market needs, Rushil Décor with this investment will significantly expand its production capacities above its current and original 80,000m3 MDF capacity at Chikmagalur, which is based within the Indian state of Karnataka.

The scope of work for Siempelkamp for this order includes the wood as well as fibre preparation system, the resin blending and application system, the fibre dryer and sifter, the forming line, mat preheater, a 28.8m x 8ft ContiRoll press, the cooling and stacking line, the intermediate storage, the sanding line, and the cut-to-size line.

The start-up of the plant was scheduled for Q1, 2020 so this line will be added to the main listing next year. Rushil Décor is one of the largest Indian manufacturers for wood-based panels and decorative materials.

Developments in South America

With a combined population of over 250 million people, Argentina, Brazil and Chile in South America, continue to have an underlying demand of well over one million housing units annually, which in turn is good for MDF consumption.

New mills, new entrants, new associations – the panels industry in South America is constantly moving ahead. South American economies have recently not been so buoyant and there have been currency crises; political crises; economic crises and as a result and as seen last year, short term the demand for MDF panels declined temporarily.

However, the Brazilian company Berneck SA Painéis e Serrados ordered its fifth wood-based panels production plant, with a Siempelkamp ContiRoll Generation 9 with a length of 48.8m and a width of 9ft. The line at Lages will have an MDF design capacity of 550,000m3 per year.

Also, international technology group Andritz, headquartered in Graz, Austria, has received an order from Berneck SA to supply a pressurised refining and evaporation system for the MDF production line in Lages, Brazil as well.

The new MDF production line will include the first MDF effluent treatment evaporation plant from Andritz to be installed in Brazil. The centrepiece of the new line will be the pressurised refining system including an S2064M refiner with a capacity of 1,150 t/d, which will process 100% softwood (Pinus elliottii and Pinus taeda) as raw material.

Following the plant’s start up, scheduled for spring 2021, the new Berneck production location in Lages will manufacture 1,665m³ of MDF daily.

This really remains a continent of change, of development, of expansion – one that is hardly in the doldrums.

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. Key producers in the region have included Masisa, Arauco, Duratex, Fibraplac, Floraplac, Eucatex and Berneck over these years.

Previously, by far the biggest future planned MDF project we had listed was Duratex’s proposed US$550m, 1.45 million m3/year two-line complex at Novo Monte Carmelo (Minas Gerais state) at the heart of its big forest base there.

However, after serious deliberations the development direction has now been changed and the investment switched instead to become a huge soluble (dissolving wood pulp) cellulose plant in partnership with Lenzing Group, Austria, world market leader in specialty cellulosic fibres. Accordingly, we have amended our future capacity table to reflect this news and taken out the formerly proposed Duratex MDF project.

Duratex’s other future MDF project of 350,000m3 at Alagoas is on stand-by for now due to current market conditions and remains in our future project listing.

Duratex previously has confirmed and consolidated its investment commitment in the construction of a new industrial MDF facility in Alagoas, Brazil.

The industrial investment project, which began with Caetex (formed as a joint venture between Caeté Agroindustrial and Duratex), was approved during a meeting of the State Council for Economic and Social Development (Conedes) on April 27, 2017.

With the approval, the company will have the concession of fiscal incentives foreseen in the Integrated Development Program (Prodesin) to install another industry in Alagoas.

According to the project, “the coming of giant Duratex was guaranteed, with an investment of R$1.1bn and the generation of 460 direct jobs.”

Duratex has 20 industrial units in Brazil and decided, some years ago, to implement a unit in the north-east. Alagoas was chosen as the ideal location for its strategic location, tax incentives and the possibility of partnership with local companies.

In order to maintain a laminate manufacturing unit, which is the industry to also be implanted in Alagoas, Duratex needed areas of up to 20,000ha of eucalyptus forests. In Alagoas, the partnership with the Caeté Plant was announced at the end of 2014, with the creation of Caetex.

Since then, the company has already planted another 6,000ha of eucalyptus in the state. The MDF and MDP panel manufacturing plant is scheduled to start operating possibly in 2021/22 and when fully operational, the unit will have a production capacity of 350,000m³ per year.

As a separate and recent update, we understand that the Duratex MDF facility at Botucatu, a city in the south-eastern region of Brazil, has been closed and as a result, this plant for now has been taken out of the main listing.

Asperbras (producing now under the MDF brand name GreenPlac) is an industrial and agro business group, located in Mato Grosso do Sul state – a complete newcomer to panel production, but serious.

The company is using its eucalyptus plantations to feed its 250,000m3 line and this line was up and running back in 2017 and is in the main listing. Additionally, the group announced plans to add a second line – with a capacity of about 230,000m3 when its forest base grows more, making a potential combined capacity of 460,000m3. We have reviewed this topic again and the project remains in our future capacity listing.

The Group’s concern about environmental issues can be identified in all its projects. For example, in the GreenPlac plant of MDF, Asperbras was able to implement an old idea and produce all the energy consumed in the company by means of a thermoelectric plant that works from biomass.

With all these great projects in mind, it is important to note that Brazil is the world’s fifth largest country by area. Its vast and varied forest sector now come under the common umbrella of IBA, the Association for the Brazilian Tree Industry. This is a young association, formed just five years ago, but an important one. IBA, can provide information on the association’s plans and industry actions, with figures on Brazilian forestry production and its potential and thanks to them for assisting in this industry update (see: http://iba.org/en/). We acknowledge and would like to thank IBA 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 partially satisfied by MDF imports from Brazil and from China.

In Chile, 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, they really have made their mark internationally and are clearly and quite rightly recognised now, as a leading global player.

Consumption of MDF in South America overall (pre-Covid-19) is projected to increase continually out to 2021/22 and most of this will be in Brazil, which will be consuming 74% 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. Also, let us not forget that the continent contains many countries, each with different sometimes wildly differing, economic conditions.

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, 2019 and through to 2020 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 Bernie Neufeld of Neufeld Group Pte in Sydney, and industry veteran Murray Sturgeon at Nelson Pine NZ, we can report Australia has been one of the strongest performing advanced economies in the world over the past decade. Economic production has shifted from a dominant mining and resource sector to a greater emphasis on the production of goods and services. 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 in 2019 until mid-2020.

MDF exports from Australia and imports to Australia averaged less than 100,000m3 annually over the last six years to 2019.

MDF is imported mainly from China, Germany, Malaysia, New Zealand, and South Korea. 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 as a result of a strong domestic market, and export activity to some markets in Asia. So, it is now interesting to report that 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 18.8m x 8ft format with lightboard package.

The production spectrum will include boards in a thickness range from 1mm- 25mm, the use of the lightboard package also enables the production of particularly lightweight fibreboards. Borg can thus rely on a diversified product range with a wide range of thicknesses and densities. Annual capacity of the new line is planned at 132,000m3.

The MDF producers in New Zealand have an installed name plate capacity for MDF of 700,000m3 but based on the current product mix and efficiencies, are apparently now producing in the region of 770,000m3 annually.

The economy in New Zealand, which is highly trade-exposed and export dependent, especially in the forest products sector, continues to respond to the global financial and economic challenges with vigour.

The building and construction cycle is still forecast to shift to a strong growth path in New Zealand (albeit from a small base) over the next two years. Housing approvals were still strong in 2019. Just over 75-80% of the MDF produced in New Zealand is exported, coming from a total production of 770,000m3 in 2019 with destinations being Japan, China, South-east Asia and a small volume going to the US.

The three producers in New Zealand are the well-known Nelson Pine in Richmond, Nelson, owned by Sumitomo, Japan which also invested in a state of the art LVL line that started up in 2014; Daiken Southland Ltd, at Mataura (formerly CHH) acquired by the Japanese company Daiken, itself a part of the large Itochu group; and then the other Daiken MDF operation in Rangiora (formerly owned by Rayonier), Canterbury region.

So, all the MDF facilities in New Zealand are owned by Japanese-based corporations. 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 bid and successfully purchased 30,000ha of radiata pine forest estate in the Nelson region. The estate was previously owned by Hancock investors of the US and this purchase will strengthen the raw material base for Nelson Pine and will provide potential fresh opportunities looking forward.

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.

With North-east Asia, China, South-east Asia and South America already mentioned or discussed in detail, that just leaves our rest of world ‘other countries’ category, which this year refers only to Algeria, Egypt, South Africa, Iran and Pakistan. So, building on last year’s interesting investment news for our global survey we see in North Africa, both Algeria and Egypt set to be joining the nations of MDF producers soon. In 2017’s third quarter, the Algerian company, Bigstar Sarl, via its subsidiary Panneaux d’Algérie, entrusted Dieffenbacher with an order for the delivery of a complete system for producing MDF panels at its site in El Tarf in the far northeast 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.

Proving to be an example of the versatile applications of the CPS+, the plant concept is designed specifically for smaller capacities and can be an ideal entry-level system for the wood-based panel market. Although Bigstar has been active in the wood-based panel trade for many years, it had never produced its own materials before this project.

“There is a rising demand for MDF boards in Algeria, and imports from other countries are becoming increasingly costly,” explained Bigstar CEO, Guelai Mohamed Chiheb.

“We have been considering producing our own materials for a long time for this reason, and Dieffenbacher SWPM has given us the perfect concept to do so.”

The 6ft wide, 14.5m long CPS+ for Bigstar will be supplied from Eppingen, Germany whilst Dieffenbacher’s Shanghai Wood- Based Panel Machinery Co (SWPM) will be responsible for the remainder of the scope of supply and for project management.

Plant assembly began in 2018 with an expected start up late in 2020 and with a production capacity of 250m3 per day, approximately 80,000m3 per year.

In Egypt, we also recorded last year the investment decision by Nile Wood SAE to add an MDF facility. Egyptian Kuwaiti Holding (EKHO) 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 investment cost of the first phase is amounting to LE1.1bn, with LE900m for the second phase. The company says the facility will be built on land with an area of 300,000m2 in Beni Suef.

All of the factory construction works are anticipated to be completed in 2020, as well as the trial run of the first phase, with production capacity of 150,000m3.

Additionally we can report that in December 2019, the Egyptian company Wood Technology Co (WOTECH) placed a milestone project regarding “Green Technology” at Siempelkamp.

Representatives of both companies signed the contract for an MDF plant with an annual production capacity of 205,000m³ which will process rice straw as the raw material.

With this plant, WOTECH is positioning itself in the areas of environmental protection and resource efficiency, because the value-added use of rice straw opens new perspectives for a raw material that would otherwise be burned as a waste product. The concept is also attractive for countries such as Egypt, which do not have sufficient wood resources for industrial use.

WOTECH is the second customer after CalAg, LLC, California, to ask Siempelkamp for an MDF plant based on rice straw.

The contract value for the new project marks the third-largest single order ever placed with Siempelkamp.

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. We will report further on this project next year.

It still appears in South Africa that only one MDF mill has been under expansive construction in the last years – the PG Bison at Boksburg in Gauteng Province with a capacity shown now of 214,000m3.

On average, private sector housing in South Africa is still projected to grow annually and certainly the demand for furniture in South Africa has strengthened considerably over the past decade.

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 2020/21, suggest that it will be a key sector continually driving growth in the consumption of MDF and particleboard.

There are currently only two MDF producers in South Africa: PG Bison and Novabord (now Sonae Arauco SA), and the installed production capacity of 289,000m3 has been driven upwards by PG Bison’s recent investments.

Looking elsewhere, in Pakistan, the ZRK Industries (Pvt) Ltd investment in its MDF mill with a Dieffenbacher continuous line in Mardan, is running well we understand. The ZRK group is the largest wood-based panel industry in Pakistan, producing both MDF and particleboard.

Having state-of-the-art plants from Europe and China, it has a distributor’s network throughout Pakistan, Afghanistan and Central Asia and claims to be covering the building industry needs of more than 300 million people.

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 brand new MDF plant, which is fully operational.

Pakistan currently imports MDF from a variety of countries and is a major export market for MDF produced in Sri Lanka, by its only producer, Merbok.

Looking at Iran now and the previously reported and underestimated installed capacity information, 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 2,505,000m3. 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 business in the field, had recently complained of scarcity and high prices of raw materials used in their trades.

A lot of new companies have come into MDF manufacturing in Iran during the past five years, with both new and second-hand lines installed. There are three new MDF lines now listed in our future capacity table that are under construction.

The Arian Takhteh 2 facility with 250,000m3 at Rasht in Gilan province is due to produce its first boards during 2020, with Arian Saeed at Sari, Mazadaran with 250,000m3 and Caspian at Salmanshahr, Mazandaran with 105,000m3 of MDF, both planned for start-up in 2021. We will report further and update information on these developments in our issue next year.

MDF still has further growth potential for more to be produced locally as nearly 800,000m3 of MDF was imported only in the last year (March 21, 2019 – March 20, 2020) mainly from Turkey and China.

However, the previously reported possible joint venture project of AGT and Qazvin Industrial Parks Company in Iran, appears not to be going ahead now and has been removed from our future capacity listing.

Beyond that, and finally in this section and in this geographical region, we can still only advise that the new MDF mill project for Green Fibre, that we understood and reported as being developed as a project in ‘West Asia’, with the line being supplied in the future by Dieffenbacher, is actually for a destination as yet unspecified publicly as well. We will keep this project under review – with a projected capacity of 165,000m3. In summary then, our final aggregate totals for global MDF capacity at the end of 2017 was 102,734,000m3 and it reached 105,598,000m3 by the end of 2018.

For 2019 the installed capacity has expanded to 109,110,000m3 and out into 2020/21 and beyond, we could reach 112,461,000m3.

How The Listing Was Compiled?

The WBPI listings published in 2019 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.