In spite of Brazil’s sharp economic downturn this year, and lingering market jitters, big players like Berneck SA Paneís e Serrados see only growth in their sights.
The Paraná state based company, which just inaugurated the first MDF line of its new US$375m Santa Catarina wood products complex in June, has already held talks with suppliers to add an 800,000m3/year MDP (medium density particleboard) line there by late 2014.
Looking still further ahead, the family-run firm’s president, Gilson Berneck, is now studying a provisional plan to buy more forest and construct a second greenfield MDF and sawmill complex nearby on a fresh site.
He predicts that in under four years, the firm’s existing two MDF lines, with a combined capacity of 845,000m3/year will be sold out, requiring extra capacity. Mr Berneck is also keen to make use of the abundant local wood supplies grown by his company’s partner landowners for its industrial use.
"If you don’t take advantage of this resource, then someone else will. And we prefer that we get there first," Mr Berneck told WBPI when we travelled to see the initial complex still taking shape at Curitibanos in Santa Catarina in July this year (2012).
A 500,000m3/year Siempelkamp ContiRoll line finally turned out MDF panels in March, five months behind schedule, chiefly due to a lengthy delay on the part of the state energy utility.
WhenWBPI visited the plant, it was manufacturing more than 20,000m3/month of pine based board. That was due to rise to 30,000m3 by this month (December).
Despite a bleak first half of 2012, with plunging prices and a severe market slowdown due to Brazil’s static economy, producers like Berneck have benefited from a limited domestic recovery since August, due to government tax cuts and consumer market stimulus measures.
In Berneck’s case, a welcome improvement in the exchange rate between the US dollar and Brazil’s ‘real’ has enabled it to make good use of its established export channels to compensate for the domestic shortfall.
By the end of 2012, the company forecast, the Curitibanos MDF line would supply around 10,000m3, or a third, of its monthly output to foreign markets, including neighbouring countries like Colombia, as well as South Africa and the Middle East. Around 15% of the exports should be of thin board.
Construction has continued as Berneck completes the first development stage with a 300,000m2/year sawmill, mirroring the layout of its original wood products complex at Araucária in Paraná state. Due for completion early next year, it will also provide raw material for the panel plants.
The company aims to draw on wood for Curitibanos from its own 2,500ha of surrounding pine plantation and a similar area planted by partner growers, as well as from the open market on a 50/50 basis.
With the imminent launch of the sawmill, the workforce of around 265 will grow by 100. Berneck is already the major employer in this rural district, drawing labour from Curitibanos, eight kilometres away.
Mr Berneck is particularly proud of his new plant’s sustainability. Apart from providing around half its energy needs through cogeneration using the site’s biomass waste, it captures rainwater from the 48,000m2 panel production hall roof for use in the process.
Energy co-generation will be 100% once the sawmill is up and running early in 2013.
Berneck’s plan is that the original Siempelkamp continuous MDF line at its Araucária plant, with a capacity of around 650,000m3/year, will concentrate on thin board, with the new line at Curitibanos making mainly standard MDF.
The company is keen to respond to an increase in demand for thin board in Brazil and the first line was originally designed to manufacturer thinner panels. It is already impacting the MDF/HDF market, denting Brazil’s fading hardboard business.
"We’re going to produce both thin and thick board. But our immediate objective is to produce more thin board at Araucária. It will happen gradually, depending on the market, but in five years’ time we will probably just be making thin board there," Mr Berneck explained.
He noted the growth in demand for new thin fibreboard applications and its substitution for hardboard. In addition there are cases where thin board is replacing other panels such as plywood. Fresh applications include toys and small handicrafts.
Unlike other large Brazilian panel manufacturers, Berneck is not going all out to laminate or paint its products. In mid-2012 it was already running a single 216,000m3/year Wemhöner melamine low pressure laminating line at the Curitibanos complex, which was finishing MDF panels on a small scale.
Berneck expected eventually to laminate only about 10% of its MDF there, according to industrial director Daniel Berneck, son of the president.
"It is added value, but it is also more work, and we are investing heavily in marketing. It is a tough market and not easy to sell laminated board," he said.
However, Berneck does plan to increase the output when it adds a further low pressure laminate line at its southern complex, along with its big MDP line.
Gilson Berneck is conscious that, although Brazilian demand for MDP continues to climb steadily alongside that for MDF, several national competitors are planning new capacity.
In 2013, Duratex intends to expand its southern MDP line at Taquari to its full 700,000m3/year, while Fibraplac plans to launch an 1,800m3/day MDP line at Glorinha next year.
With slower domestic consumption and the gap between panel supply and demand already widening, such a glut of new capacity is bound to lead to even slimmer margins. Doubtless with that in mind, the Berneck president implied his big MDP project set for the end of 2014 could be delayed by six months to a year.
"We are selling 100% of our MDP production today. We need to have another plant and two years from now our customers will be crying out for our products," he said.
Berneck, a former plywood producer which celebrated 60 years in 2012, has clearly joined the panel industry’s big players whose main focus is on cost reduction and capacity expansion to achieve economy of scale.
Even so, like some other players, the firm has become somewhat more cautious in its longer-term planning, especially in the face of the recent market slowdown. Gilson Berneck admitted his aim to build a second industrial complex in Santa Catarina down the line is "not 100% guaranteed".
At Curitibanos, Berneck has included a number of new features to lower its operating costs and improve output and quality. One first for the Brazilian industry is the MDF line’s EVOjet dry resin system from Dieffenbacher, which is claimed to cut resin consumption by as much as 40%.
Back in July when we visited the plant, Berneck was still testing the EVOjet. As each line layout across the world is different, the firm needed to trial the system and check how best to operate it so as to avoid material build-up during continuous production, according to plant manager Edgar Martins.
Another feature of the MDF line is the improved sanding section, equipped with Steinemann’s Satos Plus sanders. Trials have proved that, compared with Berneck’s Araucária unit, the belt life has almost doubled from around 40,000m of board to almost 75,000m, said Mr Martins.
Pine panel manufacture is just one of the Berneck family’s successful Brazilian business interests. Deep in the country’s interior, in Mato Grosso do Norte state, Gilson Berneck already enjoys a long-time reputation as a successful large-scale producer of planted teak, as well as cattle ranches.
There is little doubt that this tireless and innovative businessman means to succeed in each of the many enterprises in which he gets involved, not least in the competitive hot house of composite panel and lumber manufacture in southern Brazil.
