With MDF/HDF continuous production lines already in production in Danyang in Jiangsu province and Fuzhou in Fujian province, Dare Global started up its third Siempelkamp-supplied line on the outskirts of Maoming city in Guangdong province in December last year.
The company’s fourth project, a 500,000m3 a year particleboard line in Sanming in Fujian province, is due to begin production at the end of this year.
The first MDF/HDF line, in Danyang, started production in July 2003 so the company has made a rapid and strong entry into the panel business in the last few years. That is true too of the rapid start-to-finish times for construction of all three lines – for example, civil construction work for the Maoming line began on December 23, 2003; first board was produced on December 8, 2004.
So why did Dare select this location for its third mill? “We go where the raw material is available and Guangdong also offered a good market for MDF and HDF,said Li Zhengliang, general manager and director responsible for the Maoming factory. “We also wanted a location where there were no other large MDF mills too close to us.”
That raw material is 70% pine at present, but in the long-term the mill will need eucalyptus as well. “There are pine plantations in this area, but it is a slow-growth timber,explained Mr Li. “We plan to start our own plantations when we can find some land but it is a question of whether the farmers will sell that land to us. At the moment, they prefer to grow the trees themselves – they regard the land as their ‘green bank’ and if they plant eucalyptus they can get their investment back in four years with little work.
However, we prefer to have control over at least part of our raw material supply.”
The company employs 20 travelling buyers to seek out and buy wood for the mill.
And nothing is wasted as some sawmill waste is used to make pallets.
The other major raw material, resin, is made in Dare Global’s own resin plant on the Maoming site.
At present, design capacity of the mill stands at 200,000m3, but on an 8mm thick basis, Mr Li believes the line will achieve 280,000m3 – and he is speaking from experience as both his company’s other lines are running comfortably above design capacity.
“This line was intended to make thin board but we have demand from different markets for all thicknesses of board and that is a problem for me,said Mr Li. “Our main market is Guangdong province, but we also export to the Middle East and the US; both MDF and HDF for flooring. In fact, the group just received an order for 10,000m3 a month for export, and although it is not finally decided, the whole order will probably be supplied from this mill.”
That final decision rests on factors such as raw material supply, transportation costs and sea freight, he explained. “Such a big order must have guaranteed quality, quantity and on-time delivery as well as getting the costs right for both board and logistics.”
While the equipment at Maoming is essentially the same as that installed at Dare l in Danyang, this mill is set up to supply a different market in terms of panel sizes.
Hence a more sophisticated book saw line by Siempelkamp Handling Services is employed here. “We currently have 12 different cut sizes according to customer requirements and, while we can make multiple cuts across the width of the board, we only have two saw blades to cut the length at the moment,said Mr Li. “Thus we are discussing fitting a third blade, then we can cut anything because the market is now asking for all kinds of cut sizes: our orders are calling for special sizes, such as for blades for ceiling fans for hotels and restaurants.
“More and more products are using MDF and, as the price of steel increases, some products are being switched to MDF.”
Only raw board is produced at Maoming as the strategy of the Dare Wood Group is to set up dedicated lamination plants near the cities where the market is to be found, he explained. The main production is in E1 grade board with some E2 for laminate flooring where the board is encapsulated, but Mr Li hopes to produce E0 in the future.
I asked him if any further lines are planned on this large 600mu (40ha) site.
“It depends on the wood raw material supply and the market of course, but we do have space available for another line here,said Mr Li. “But at the moment, I think further MDF production in China is unlikely because by 2005/6, all the new big-capacity lines will be in full operation and that will mean a lot of capacity on the market, so we will have to wait and see what the result of that is. Also, you never know – the market can change a lot.
“In the last two or three years, a lot of big-capacity lines have started up but most of them are not yet running at full capacity and it will make a big difference when they are. It means the wood raw material price has increased a lot and margins are getting less and less – especially here in the south. The north is not quite so bad because there are not so many big lines there – Beijing Sinhua [Krono group] is the largest.
“Maybe in three to five years things will be more stable and more farmers will have planted trees, it is very difficult to say.”
There is much talk of anticipated growth in particleboard production in China but Mr Li is not so sure: “The market price is always much lower than for MDF and the most important thing for particleboard is that the surface quality should be good. It is also less demanding on raw material [wood] in terms of quantity for a lower density product, and wood quality, and there is a big demand for furniture in China so particleboard should have a good market. The main problem is surface quality and screw holding characteristics.
“Particleboard in China today is generally of such poor quality that people don’t like it. It would need a lot of sales effort even if you did make a high-quality particleboard and there is also the issue of edge-moulding [compared with MDF].”
