Focus on MDF: Part 2 | 15


pandemic-induced disruptions, exacerbated by the Russia-Ukraine war since February 2022 have caused high production costs and a shortage of raw materials.


The high demand eased, with some easing of prices.


Thailand is also facing a double whammy. Not only had it to grapple with the high production cost due to a shortage of raw materials, it has also to contend with a low price its main importing countries such as Vietnam can afford, given that the higher shipping cost has itself precluded it until recently from being able to export to markets further afield. Many now run their production at subnormal capacity just to hold prices stable. Likewise in Malaysia and Indonesia, manufacturers have been exporting far less due to the severe shortage of shipping containers. Their outputs are mostly sold locally, with some export going to Middle East, where shipment can be sent via breakbulk. The outlook remains complex with many of the supply chain problems not about to go away anytime soon. In Vietnam, with 2,220,000m3


of MDF


capacity confirmed as installed, we can see FSC Vietnam JSC of Kim Tin Group running 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. The operation of the plant will contribute to modernisation in the province. Then in December 2021 came the announcement of a further US£350m investment by the Kim Tin Group which signed contracts for two new MDF production lines (460,000m3


and 400,000m3


in Binh Phuoc and Dong Nai provinces. Headquartered in Ho Chi Minh City, the Vietnamese Kim Tin Group commissioned Dieffenbacher to supply the two MDF plants, for its sites in Chon Thanh, Binh Phuoc province and Dau Giay, Dong Nai province.


Chairman of the Board Nguyen Tien Hai said the company liked to “think big” and therefore decided to build two production lines at the same time. Kim Tin Group planned to produce the first board on its new MDF line in Chon Thanh in May 2023, with start-up of the plant in Dau Giay expected to follow in early 2024. By 2025, Kim Tin Group intends to build additional plants in central and northern Vietnam.


Also in Vietnam, Mekong Wood MDF JSC of Cam Khe in Phu Tho province, currently active in trading wood-based panels, plans to start producing MDF. For this purpose, the company has ordered


a complete plant from Siempelkamp. The 8ft x 47.1m ContiRoll with a NEO press infeed will be geared to processing acacia wood.


)


Use of other woods, such as eucalyptus, is planned as well.


Once up and running the plant is to have an annual output of more than 400,000m³. The main customers are likely to be buyers in the furniture industry. Siempelkamp says the range of thickness is 3.5-32mm, but a large proportion of the output will comprise panels with a thickness of 15-17mm. To note in Vietnam, Siempelkamp had first received an order for a forming and pressing line for processing acacia wood from Dongwha Holdings Group of South Korea in October 2019. The line – the same dimensions as the one for Mekong Wood above – was put into operation in 2021 with an estimated 300,000m3


capacity. In Thailand, with 4,933,000m3 of MDF


capacity installed, significant new MDF investments have continued, with new plants in the past two years including Siam Riso’s 200,000m3


capacity facility which started


production in November 2021. Another was Metro MDF, which installed a new forming and press line to replace the original Küsters forming and press line for its MDF plant at the Kanchanburi site. This uprated MDF facility now fully operational with a capacity of 290,000m3


and is equipped with a thin-


and lightboard package. No new investment plans have been seen


in Malaysia for some time and our latest MDF mill listing shows the country’s substantial capacity at 1,505,000m3


. Apart from


domestic sales and Singapore, the Middle East market has been a consistently growing market in recent years, A recent statement from Johor Baru,


Evergreen Fibreboard Bhd (EFB) 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. As previously reported, modified wood products innovator Accsys Technologies continues exploring opportunities for new manufacturing plants outside Europe. It 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 (the “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 modified wood fibre panels for the use in the construction industry in the region. The evaluation is continuing. For Indonesia, alongside the traditional


high-volume plywood production, we now see MDF to be a substantial product produced in this country, with 1,277,500m3 capacity installed over 10 lines. A new MDF investment by PT Indonesia for an additional 208,000m3


capacity is now


progressing and is under construction with supervisors from equipment suppliers Yalian, China on the site. In South Korea, with 2,113,000m3


of MDF


production capacity installed, raw material availability remains a key issue. With the introduction of the Recycled Energy Policy, the amount of wood ‘waste’ used for energy has increased. So, consequently Korean panel manufacturers seek a new policy now to prioritise the cascade and efficient use of wood for materials first. Thailand, Vietnam, Brazil and China are the major sources of imported MDF in this country.


Summarising, this region has experienced supply shocks following the pandemic causing output to be at times at a sub- optimal level. El Nina which brought extremely wet weather since the middle of 2020/21 has resulted in logging activities being drastically scaled down, thus causing shortages of wood raw materials. Added to this, advanced technology has enabled the life span of old rubber trees to be prolonged, so that more latex can be extracted. And, more logs are licensed for export, causing shutdown to downstream wood processing plants, which in turn deprive MDF plant of their sources of wood materials.


INDIA AND PAKISTAN In India we have seen MDF capacity grow substantially to 1,935,000m3


in 2022. The


plywood manufacturer Greenply Industries Ltd’s new MDF line (Greenpanel) in Chittoor District, Andhra Pradesh, at 56m-long with its Dieffenbacher CPS at the core of the plant, is currently the longest continuous press in operation in Asia. Greenply (Tinsukia, Assam) announced


plans to eliminate existing bottlenecks at its two MDF locations in Routhu Suramala (Andhra Pradesh) and Pantnagar (Uttarakhand). This is meant to increase total capacity of the two plants by 20%, from previously 540,000m³/year to 650,000m³/ year.


In its current investment planning,


the company estimated INR250m for this expansion, which is expected to be completed in the third quarter of the financial year. Production volume rose by 40% compared


to the preceding year to 138,080m³ (98,612m³), MDF sales increased by 54.4% to 139,490m³ (90,355m³). In addition to price


continued on page 19 www.wbpionline.com | August/September 2023 | WBPI


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