As the only North American company with a presence in the UK panel industry, and the only OSB producer in that country, Norbord (at that time named Noranda Forest Products) brought its experience in the manufacture of OSB to Inverness, Scotland in 1988.

It purchased the first OSB mill in Europe, built in 1985 by Highland Forest Products, which had a multi-opening press, and a second, similar line was added by Norbord in 1994. Both lines have eight-daylight presses.

The company name changed to Norbord in 2004. "Noranda Forest Products was in paper and just about every other forest product you can think of," says Norbord Europe managing director Karl Morris, who is also a senior vice president of the same company.

"Pulp and paper and timber were spun off in 2004 and Norbord became the brand for its panel products."

In 1988 the Inverness line was one of only two OSB mills in Europe. How things have changed since then.

"When we bought the Inverness mill, the plated capacity was only 80,000m3/year," says Mr Morris.

"With the start-up of the second line, we had a capacity of 160,000m3 on our two Siempelkamp multi-opening lines.

"Today, we can produce around 350,000m3, achieving that increase mostly through de-bottlenecking, advances in resins and manufacturing technology; and the capability of the people we employ to run the site." I asked Mr Morris why the company chose the UK as its first venture into manufacturing outside North America.

"Norbord was one of the early entrants into the OSB industry in North America. The UK offered no language problems for us and the Inverness mill already had a good, reliable wood supply in Scotland.

"Of course we have many competitors in the North American OSB industry and one of them also operates in South America, but there were, and are today, no other North American companies manufacturing in Europe."

Returning to the story of the UK business, Mr Morris continued: "In 1995, Norbord and Glunz formed a joint venture in the UK, producing OSB, MDF, particleboard and furniture. But at the beginning of 1999, Sonae acquired Glunz and at the end of that year, Norbord acquired 100% of the UK business".

However, we mustn’t forget that Norbord doesn’t only operate the one OSB mill in Europe. In 2004, the company bought the former Agglo OSB mill in Genk, Belgium.

"This was a natural extension of Norbord’s strategic commitment to growth in OSB, delivering increased volume, product flexibility and improved access to growing Continental markets," says Mr Morris.

The Genk mill has a Dieffenbacher continuous press and today has an annual capacity of around 400,000m3.

"After several years of de-bottlenecking, and considerable capital investment, we increased the plated capacity significantly at Genk by 2014," says Mr Morris.

Although Norbord’s overall focus is predominantly on OSB, it also has those ex-Glunz MDF and particleboard production lines located in Cowie, Scotland and a value-adding facility in South Molton, Devon, in southwest England. Almost one year ago now, Norbord merged with Ainsworth of North America.

"Norbord has always placed OSB at the heart of its business," says Mr Morris.

"Our merger with Ainsworth last year has produced the largest capacity for OSB in the world. Ainsworth has given us a more balanced geographical spread in North America. Norbord had no production facilities in western Canada before [the merger] and now we are represented in every OSB-producing region in North America.

"The merger has also given us access to Asian markets, particularly Japan and China."

A new line for Scotland

Following rumours in the industry for a while, it is now confirmed that Norbord is to build a continuous-press line at Inverness, to replace the existing two multi-daylight lines.

"The contracts have not yet been placed with any machinery suppliers, but engineering design has been done and we are in final negotiations on each part of the project," says Mr Morris. "Where possible, we will place turnkey contracts, [but] what is important to us is that each part is discrete enough that there can be no arguments over which supplier is responsible for which part. The forming and press line will be from the same supplier, obviously."

The anticipated capacity of the new continuous line will be 640,000m3/year and it is being built as a ‘brownfield’ development on the Inverness site, meaning that the old lines can be phased out when the new one is up and running. That way, there will be no disruption to customers as the new line is built.

"When we are comfortable that we can service the customers from the new line, we will switch off the existing ones and remove them," says Mr Morris.

Of course the hot topic of the day is wood supply, but the managing director has no qualms about that.

"We are confident that we are in a good location for wood raw material as there is still significant growth in the supply going forward – there is a lot of upside yet." Another big cost factor for most mills is logistics, but this does not appear to be a problem for Norbord either.

"The rail terminal and the port are very close so we can get the product out to Europe very comfortably," says the managing director.

He also points out that with the continuous press, Norbord will be able to offer a wider range of products than it can from the existing fixed-size multi-daylight lines.

"This will give us greater access to markets that we can’t currently ship to – for example Germany, which we currently supply from the Genk mill," adds the managing director.

Markets for OSB

Turning to the markets, Mr Morris says: "As housing and other construction grows, so will OSB consumption. There has also been a significant substitution of OSB for plywood; in North America for the past 30 years and for 15 years in Europe. There has been exceptional growth in European OSB demand in the last four years or so since the recession and OSB was unaffected by the recession as volumes sold increased through substitution.

"Prices have not been great in the last 18 months, but when you get a lot of new capacity coming on and disrupting the supply/demand balance, this only accelerates the ongoing substitution trend [for plywood]. The lower price has also accelerated substitution by gaining the [waverers], who finally switch from plywood and then they don’t go back because OSB has proved itself".

I suggest that some OSB manufacturers are worried by the increasing production capacities in Russia and elsewhere in eastern Europe.

"We choose to be in western markets such as the UK, Benelux, Germany and France," says Mr Morris. "There will continue to be growth [in OSB production] in the east, because of the wood supply, but those mills will supply their local markets."

However, Mr Morris admits that currency fluctuations can affect this situation.

Ms Robin Lampard, CFO of Norbord Inc, also joins the interview session and says: "It is not so much about OSB finding new applications as new applications finding OSB.

For instance, in the last four or five years, OSB has been increasingly used in frames for soft furnishings and in industrial packaging applications [as an unsurfaced OSB panel] and this is true for both North America and Europe.

"As well as the Ainsworth merger and Inverness modernisation, we continue to invest in our existing mills. For instance, we de-bottlenecked our Joanna, South Carolina line, increasing it from 443,00m3 to 576,000m3 with a recent investment in a new green end and wood room," adds Ms Lampard. "Though Huguley is still mothballed, awaiting the market.

"North American OSB prices have been a bit choppy in February, but that is common in this season and our view of the market remains constructive. Although the pace of this cyclical recovery is a slower recovery than any we have seen before [in North America], new homes business continues to improve, driving steady growth in OSB demand."

Mr Morris then rounds off the interview by saying: "After over 30 years of commitment to OSB, Norbord remains confident in its future growth."