The current and future MDF capacity continues to increase worldwide, especially in South American and the Asian regions.
WBPI has recently published an annual survey regarding the global position for MDF in countries outside Europe and North America, as well as information about the existing mills in the ‘rest of the world’ as at the end of 2015 and on those under construction in 2016 or planned for 2017 and beyond.
For the ‘rest of the world’ areas, there is now an increase in installed capacity in 2015 of 66,632,000m3, while further investments identified for 2016 bring the total to 67,512,000m3. As for 2017 and beyond, this capacity reaches 72,126,000m3. Together with the numbers in Europe and North America, the value of the global MDF capacity exceeds 100 million m3.
There is a very important increase for countries such as Brazil, Iran and Vietnam for 2016. As for 2017, the rise also accounts for Brazil, Paraguay, India, South Africa and Thailand.
China and North East Asia
The MDF market in Asia was low in 2015 because of the slowdown in global demand. As a consequence, the prices remained weak, while the Chinese economy cooled down and the continuous depreciating domestic currencies went against the US dollar. The average annual growth over the past five years has been strong, with the exception of Japan.
As reported by WBPI, China is still forecast to produce 85% of the furniture in North Asia by 2017 and the strong growth in the region will influence not only the aggregate consumption of all wood panels, but also the proportion of use by each sector. Approximately 25-35% of annual furniture production in China is exported, with the largest volumes destined for the US, Japan and Europe, while the domestic market continues to grow year-on-year. As was reported last year, some furniture factories have had to close down due to raw material shortages, labour issues, higher wages and dwindling exports. The drive by the authorities to move industries to inner cities has also led to an exodus of some Taiwanese furniture factories from China to Vietnam.
Production in China is projected to stabilize over the next three years, most likely peaking in 2015/16 and then declining marginally by 2017. Consumption might increase in China, due to the fact that the country plans to focus to a more domestic growth. Also, in the last 12 months, commercial activity in the Chinese MDF industry has continued to decrease as the government tries to rein in the country’s dramatic economic growth of recent years.
There is still dynamic activity in China. 15 new multiopening lines (all supplied by SWPM), with a combined capacity of 750,000m3, were under construction and were completed by the end of 2015. Other 2 SWMP 4ft continuous lines (Shandong and Hubei) with a combined additional 363,000m3 have been added the capacity list.
South East Asia
North Asian and South Asian economies are forecast to become one of the world’s fastest-growing by 2017. India, Indonesia, Malaysia and Vietnam are expected to have an average real GDP growth rate of 5-6% per annum or even higher; Thailand is expected to grow at around 1%.
According to WBPI reports, the economic development will strengthen household income, which will support residential construction. Urbanisation, supported by improved transport links will generate demand for dwellings. In Vietnam, the MDF industry has fared relatively well due to more foreign direct investment and strong exports to the US. VRG Dongwha’s joint-venture mill in Binh Phuoc province is to be joined by a second production line from Siempelkamp with a capacity of 198,000m3.
Then there is the VRG Quang Tri 120,000m3 continuous ‘Dynasteampress’ supplied by Imal of Italy, due on-stream in 2016. Thang Nam (May) Forestry Joint Stock Company (JSC) started the first phase of its 175,000m3 mill in Ving Nghe An during 2014/15, so is added to the main listing. Its second phase is possibly expected during 2017/18, but currently we have no more news on this project.
Investment in production in Thailand continues and the Advance Fibre Co Ltd/ Metro-Ply investment is going ahead at Kanchanaburi, adding a further 310,000m3 MDF capacity with its Dieffenbacher line, due on-stream in 2017. The Wisewoods/ Green Panel MDF investment at Khao Yoi, Phetchaburi, with its 194,000m3 line from Siempelkamp, is due to start production in late-2016 or early 2017. As for Malaysia, the capacity remains at 1,445,000m3.
Evergreen Fibreboard Bhd (EFB) wants to strengthen its position as one of Asia’s largest MDF manufacturers and also to be among the top 10 producers in the world. Eucalyptus will generally be used, with production scheduled to begin in autumn 2017.
Century Plyboards Ltd intends to build an MDF plant in Punjab during the next two years. The continuous press line has been ordered from Chinese company Yalian Machine Co Ltd, Jilin. The new plant will have a capacity of 200,000m3/year.
Developments in South America
Argentina, Brazil and Chile, with a combined population of over 250 million, appear to have an underlying demand of well over one million housing units annually which in turn is good for MDF consumption. All three economies are now well-positioned for a stronger economic performance through to 2018, as shown in WBPI reports.
No MDF was produced in Brazil in 1998 and now the country has the largest production capacity in South America. It is projected that MDF capacity in South America will exceed 11 million m3 by end-2017.
In Brazil, the two newest lines were the Arauco 500,000m3 line at Jaguariaíva, Parana state and Duratex’s 520,000m3 Itapetininga line; both are now fully operational. Fibraplac of Porto Alegre continues to expand its Glorinha plant and the one in Campinas São Paulo, so for 2015 its two MDF lines are now rated at 420,000m3 and 250,000m3 respectively, shows the WBPI information.
Duratex’s US$550m is the biggest plan for a panel project. It will reach 1.45 million m3/year and the two line complex will be built at Novo Monte Carmelo (Minas Gerais state). Duratex’s plans for a 700,000m3/yr unit to run in 2016 making MDP/MDF on a 77m press, and a 750,000m3/yr unit for MDF due in 2017, have now slipped back.
Placas do Brasil, originally planning a 180,000m3/yr line at Pinheiros, (Espirito Santo state) has now revealed plans for a 300,000m3/yr plant, with start-up in 2017/18. The delay is put down to a relatively slow market and also to waiting for further build-up of the local eucalyptus plantations. Also Floraplac (in northern Pará state) with 430,000m3 at Paragominas was due to start up its second line by 2016 but it now appears more likely it will actually be in 2017.
Primary source: Wood Based Panels International
