If you are a regular reader of WBPI, you will know that the last few annual surveys of the MDF industry in Europe and North America have not presented an optimistic view overall.
Certainly there has been activity in Turkey and eastern Europe, and that was reflected in our survey last year, with several new projects being listed in both areas.
This time, we are able to report three new lines in Turkey for start-up in 2014 and beyond, but otherwise the news from 2012 in western Europe is mainly of bankruptcy and takeover, rather than new capacity, as we shall see later in this report.
We mentioned in last year’s report that there appeared to be "flickers of light at the end of the North American tunnel" and it seems we were right. The better news from the US is that the housing market is finally starting to move after five years or so of stagnation.
That change in mood is now being reflected clearly in the OSB market, where temporarily-closed mills are being ‘taken out of mothballs’ and new-build mill projects that were suspended during the economic crisis are being re-started too.
It seems reasonable to assume that this revival in the fortunes of the OSB manufacturers will percolate through to the MDF and particleboard makers, but it will take more time; once the houses are built, they will need decorating and furnishing.
Canada sensibly did not join in the excesses of the US banking industry and so was not as badly affected by the downturn.
We also tentatively mentioned in last year’s report possible, even dimmer, flickers of light in western Europe, but it seems these did not in the end appear.
Once again, this year’s survey provides listings of existing capacity in the two regions at the end of 2012. Furthermore, drawing upon a range of sources, including the industry itself, we show the changes expected to capacity during 2013, 2014 and beyond.
Total all-European capacity reached approximately 21,038,400m3 in 2012, compared with 20,465,000m3 in 2011.
Many mills continued short-time working and extended closure arrangements, which influenced effective capacity.
The survey continues to be published in two parts; the second part will deal with the ‘Rest of the World’ outside Europe and North America and will be published in the August/September issue of WBPI.
The author and the editor of WBPI remain grateful to all those organisations that took the time to complete our online enquiry form and to all those other industry professionals, such as panel equipment suppliers, trade associations and trade journals, who made valued contributions to the narrative. We are happy to receive all new information regarding capacity changes at any time during the year when it is most convenient.
As a reminder to those considering their input for part two of our survey, or the upcoming particleboard survey, you can make your submission at www.intermark.plus.net where you will find the necessary forms.
European capacity changes
As we reported last year, western and central Europe have no projects for new capacity under way and the existing players appear to be having trouble selling the production capacity they already have.
In Sweden, the Karlit MDF mill filed for bankruptcy in August 2012 and has therefore been removed from the list, with a capacity removed of 110,000m3.
Meanwhile, Swedspan’s mill in Orla, Poland, has been included in the main listings for mills operating in 2012 as that was its first full year of production.
Thus the net effect of the closure of Karlit and the inclusion of Swedspan is plus- 10,000m3 on total capacity for all-Europe.
Meanwhile, IKEA-owned Swedspan took over Pfleiderer Novgorod in Russia in the first quarter of 2013. That mill was planned for start-up in 2011 and was in the mill listing in last year’s survey (issue 3, 2012) but was in fact delayed to 2012. The mill has a design capacity of 500,000m3 of MDF/HDF.
In another development involving Pfleiderer, Divapan, the Turkish MDF manufacturer, has bought the forming and potential investors will decide to revise their plans".
There is however, no certainty that such delays will in fact occur – it is just a factor that should be borne in mind when looking at future capacities in that region.
As far as we are aware, the mills planned by Mostovdrev, Gomeldrev, Borisovdrev, Kronospan and Vitebskdrev, all in Belarus for start-up in 2013/14, are still on track and are shown in our future capacity listings table ‘European capacity development’.
The mills mentioned by Eugene Gerden are also still shown in that list as we have no definite information on their status at this time.
Looking at Table 1, we can see that this year (2013) promises an increase in capacity of 2,490,000m3, in Ukraine (Kronospan), Belarus (Mostovdrev, Gomeldrev and Borisovdrev) and Russia (Russia Laminat, Igorevskaya and Pfleiderer, Novgorod now owned by Swedspan as mentioned earlier).
For 2014 and beyond, we have two new plants planned in Belarus (Kronospan and Vitebskdrev); one in Bulgaria (Kastamonu); and those two in Turkey mentioned previously, plus Kastamonu’s project in Antalya.
Table 2 gives a summary of the capacities in Europe, Turkey and Russia, with the latter two countries being singled out particularly because of the way their capacity development is changing the face of the industry on the continent of Europe – as reflected in the ‘Changing importance of European sub-regions’ table.
This forecasts a figure of 25,054,000m3 as the total capacity of the European continent in 2014/15.
Meanwhile, Turkey’s share of that cake goes from 21.4% in 2012 to a forecast 28.4% in 2014. Russia’s share goes from 12.3% to 15.4% in the same period and we suspect that there could be a lot more capacity yet to come in Russia.
North America
Uniboard’s plant in Moncure, North Carolina, has been renamed Flakeboard, following its takeover by Arauco of Chile, which already owned Flakeboard, in September 2012.
Meanwhile, Uniboard in Mont Laurier, Canada, is now owned by Kaycan Ltd (since fourth quarter 2012) but the name is so far unchanged, as far as we know.
Deltin Fibre LLC/Temple Inland, of El Dorado, was taken over by Deltic Timber Corporation in February 2013.
Temple Inland’s Mount Jewett mill was bought by Georgia-Pacific in December 2012, so its name is unchanged in the listing for that year in this issue.
Some capacities of North American mills have been revised from the 2012 listings (of 2011), due to information received by WBPI and these revisions were generally downwards.
Business barometer
Table 4 shows the 2012 index as ‘100’ and the 2013 and 2014 results for North America show the trends rather than statistical precision.
However, the North American business barometer (above) does suggest that prices may well rise by an average 15% during 2013/14, compared with 10% in last year’s barometer, and that costs are expected to rise by an average of 11.25% (8% last year).
The industry expectation of price changes is almost entirely driven by costs, so it is not surprising that both selling prices and costs are anticipated to rise, though the scale of the rises is perhaps surprising.
The higher expected percentage increase in prices, compared with costs, may also be a consideration of demand versus supply as the mills expect sales to improve, stating a 5% increase in production for 2013; certainly prices have risen steeply for OSB with the increased demand.
Regrettably, insufficient data was returned by European manufacturers to compile a meaningful business barometer for that region. However, it seems reasonable to expect that lack-lustre figures would apply, at least in western and central Europe.
How the Listing Was Compiled
The WBPI listings published in 2012 were reviewed and modifications made using other published sources and data received directly from the mills. Published information was reviewed for news of capacity changes. These sources included relevant trade magazines, association reports and equipment suppliers’ reference lists.
Self-completion enquiry forms were distributed to the mills, requesting current and future capacity data. The form was also posted on a special website (www.intermark.plus.com/).
The mills’ own reported capacities are used wherever possible because this is the basis upon which they make their estimates of future capacity and production changes. Where this information is not available, published sources are used, usually on the basis of 330 operating days per year.
Conversion of ft2 to m3/ year is made with 1,000 ft2 equal to 1.77m3.
