Focus on MDF: Part 2 | 15


investment in China is with Huashi Chaoyang Tech with 97,000m3


planned.


Our total listing for Chinese installed capacity at the end of 2023 is now 58,258,000m3


production output.


MDF installed capacity in Japan remains at 635,000m3


with 95% of material produced


mainly in the form of raw panels. There are no plans known to substantially increase domestic MDF capacity and the supply of imported MDF from New Zealand continues, with all three MDF mills in that country under Japanese ownership.


 South-east Asia economies are still set to


be among the world’s fastest growing when looking out to 2024/25 and beyond. India, Indonesia, South Korea, Malaysia, Thailand, and Vietnam are expected to continue to have positive GDP growth rates. In this part of Asia, the MDF market has been doing well, driven by continuing increasing demand. The pandemic-induced disruptions, exacerbated by the Russia- Ukraine war since February 2022 and the war in Gaza have caused disruptions to markets, higher production costs and some shortage of raw materials.


Thailand has particularly had to grapple with the high production cost due to a shortage of raw materials. It has also to contend with a low price that 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 further afield. Likewise in Malaysia with an installed capacity of 1,505,000m3


. Note, this is not the same as


the announcement of a further US$350m investment by the Kim Tin Group back in 2021, for two new MDF production lines (460,000m3


and 400,000m3


said Visarut Palarit, deputy director at Wisewoods. “The Z-Sifter also efficiently eliminates


) in Binh Phuoc


and Dong Nai provinces, we see the first line up and running in Chon Thang. This mill has been added to the main listing. 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. Kim Tin Group planned to produce the first board on its new MDF line in Chon Thanh in 2023 (achieved), 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. It 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. 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. In Thailand, with 4,933,000m3


of MDF there are challenges


where there are some shortages in raw materials due to a decline in rubber wood cultivation in favour of palm oil and no new investments have been seen recently. In Indonesia, manufacturers have been exporting far less due to increasing consumption, as well as the complication of severe shortages of shipping containers. The new MDF investment by PT Indonesia for an additional 208,000m3


capacity installed, two significant new MDF investment projects have been announced and added to the future capacity table. Kijchai Enterprise PCL(SKN), Huay-Yang, approved the expansion project concerning constructing the company’s third MDF/HDF line with an annual capacity of 500,000m3 MDF with an investment of THB2.4bn, equivalent to US$66.8m. The construction is anticipated to take two years. Additionally, Thai MDF producer


capacity is now


complete with equipment from Yalian, China and this mill is now in the main listing. For Indonesia, alongside the traditional high- volume plywood production, we now see MDF to be a substantial product produced in this country, with 1,485,000m3 installed.


capacity


Outputs from both Malaysia and Indonesia are mostly sold locally, with some exports going to the Middle East, where shipment can be sent via break-bulk. The outlook remains complex with many of the supply chain problems not about to go away anytime soon. In Vietnam, now with 2,680,000m3


of MDF capacity confirmed as installed and following


Wisewoods Co Ltd has commissioned Dieffenbacher to supply a CEBRO MDF plant to expand its production capacity at the company’s headquarters in Khao Yoi in the province of Phetchaburi. Plant assembly has been under way since January 2024, with the first board production scheduled for the third quarter. Capacity will increase by 247,500m3 In keeping with Dieffenbacher’s CEBRO smart plant concept, the new plant will use Z-Sifter technology and the PROjet glue- saving system. Wisewoods exclusively uses rubberwood fibres as the raw material for its MDF boards. “The many Z-shaped sifting stages of the Dieffenbacher Z-Sifter provide a sharp separation line, making the separation of lighter rubberwood particles possible,”


other contaminants such as wood residues, glue lumps, fibre deposits, minerals and metals from the fibre flow,” added Holger Ries, area sales director at Dieffenbacher. Dieffenbacher will also supply Wisewoods with the glue preparation and dosing system, the forming station and forming line, a CPS+ continuous press and the raw board handling system. The contract with Wisewoods also includes plant electrics and automation. 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 plants of their sources of wood materials. This creates a complex set of circumstances.


INDIA AND PAKISTAN In India we saw MDF capacity grow substantially to 2,355,000m3


in 2023. The


plywood manufacturer Greenply Industries Ltd’s new MDF line (Greenpanel) in Chittoor District, Andhra Pradesh, features a 56m-long Dieffenbacher CPS at the core of the plant. Greenply (Tinsukia, Assam) announced


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


company estimated INR250m for this expansion, which was expected to be completed in early 2024. Greenply Industries Ltd acquired all shares


continued on page 19 www.wbpionline.com | August/September 2024 | WBPI


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