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where the energy price is very different and those regions stand to benefit, such as the US and Turkey.


“There is still a risk of a tectonic shift [in wood-based panels production to other world regions] if energy prices remain high in Europe, as well as the other issues like high wood costs. Europe could lose competitiveness as a region,” he said. “That is a real risk.”


Swiss Krono, Mr Brettenthaler admitted, would be prepared to look at additional mill investment outside Europe as part of this trend to localised production where the economics are more favourable. Against this are freight costs, which remain costly and complicated.


REGULATION THREATS


Despite the wood-based panel sector having such a good environmental profile, regulators are causing complexities for producers. Though there have been calls to halt further regulations during the pandemic, the panels sector today faces new regulatory challenges that present very real risks. “We are confronted with a multitude of new initiatives, which all have regulatory effects. “A new topic is the focus on melamine, which is a key element of the board and surfaces. It is now in the process of being put on a list of substances with a high concern, even though there is really no proof of any mobility of melamine out of wood-based panels. This is a major issue and something that came out of nowhere. This really plays into the risk that Europe may lose ground to other regions of the world because this is a European approach only.”


This situation creates insecurity because the industry is unsure whether the outcome will be continued permitted use of melamine or a ban.


Mr Brettenthaler remains optimistic that wood-based panels can still come out “on the winning side” with regulators as the product has major potential to reduce carbon emissions in the built environment. The EPF is lobbying in favour of the cascading use of wood principle in the face of the renewable energy directive, which seeks greater use of renewable energy, including wood. “Wood-based panels have a tremendous positive impact on decarbonising the building sector but also in providing long-standing jobs, which is not often taken into account.”


SWISS KRONO IN UKRAINE Before the war began in Ukraine, Swiss Krono operated one plant in the east of the country and two in the west, producing OSB on a daylight press and MFC. Just before the invasion, it moved production from the eastern plant to the western facilities. There was an initial stop in production when hostilities started, but the two plants have since run steadily. There are no current plans to restart the eastern plant as there is no demand or transport there.


Most of the production is sold domestically, with some volumes of MFC furniture board exported to Poland.


“The whole customer base is seriously resilient, as is our industry,” Mr Brettenthaler said.


“When the Kerch Bridge was attacked in Crimea, Russia attacked the energy structure of Ukraine and this is when we thought this could be the end for wood-based panels plants in Ukraine because of a shortage of electricity.


“Surprisingly, they figured it out and we have had very few days where we could not produce.”


Capacity utilisation in the plants is running at 80-90%.


As for Swiss Krono’s operations in Russia, the company still operates a large plant at Sharya with an MDF line and two particleboard lines, amounting to 1,200,000m3 in capacity. But it has ended its project for a new OSB facility there.


“This was a huge step because we had invested a significant amount of time, effort and money in the project. We have now resolved co-operatively the contracts with all suppliers. There was some equipment which we are using on other existing plants – in Hungary, Poland and France – and some we could hand back to the suppliers. In some cases, the suppliers have been able to find alternative customers for the equipment, like with the OSB press. It was a difficult exercise but we got through it.”


Swiss Krono has plans to invest in OSB capacities in western Europe but these are not advanced enough where it can publicly talk about them yet.


“From a Swiss Krono perspective, our intention to increase OSB capacity in the long term is unchanged but we can’t do it in Russia.


“Our strategy is with our existing OSB mills and we have started or already completed investments to increase capacities on existing lines. We target a capacity of 500,000-600,000m3


per line as being the


optimum. We have worked really hard over recent years to get all our mills to this level. When this is concluded the only option would be building new plants.”


THE FUTURE We asked Mr Brettenthaler, from his EPF leadership viewpoint, what his key message is to the European wood-based panels industry at this time. “As an industry, I would say the general outlook for our products is unchanged in a positive sense. Besides the current short term challenges, Europe wants to confront the topic of fighting climate change and we know that building with wood is a key solution. Wood-based products are also renewable products.


“Secondly, we have a strong industry with strong players financially who are innovative and very diverse, so the industry can play an important role of keeping up the efforts of re-industrialisation in Europe in general.


“It’s also necessary that we as an industry stick together and fight the challenges and threats we face, be it regulation with regard to chemicals or the fight to safeguard the wood raw material. We need to make clear there needs to be a level playing field against other users of wood.


Above: OSB is a major product for Swiss Krono


“If we can be successful in making our position heard then I think the future is very bright for wood-based panels.” ■


www.ttjonline.com | May/June 2023 | TTJ


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