by Web Editor | Apr 12, 2013 | Update
In its annual report, the plywood and LVL machinery and technology manufacturer, Raute, said 2012 was a clear improvement over the past few years, including a EUR 50 million order for machinery and equipment for the reconstruction of the fire-destroyed Paneles Arauco plywood mill in Chile, and a EUR 14 million project for a LVL mill in Germany. Tapani Kiiski, president and CEO, emphasized that uncertainties abound in 2013 but there are positive developments in certain regions.
“My strongest expectations this year are focused on the emerging markets in Russia and Asia,” Kiiski said. “The outlook for North America has also improved from the extremely low level of the previous year, and new projects are being planned in Europe.”
The Raute reports notes that Russian plywood manufacturers are developing new innovative products and tapping boldly into new markets. The country’s plywood production has doubled over the past decade, and export and domestic demand is expected to increase. The growth is driven by increasing construction activity in the Moscow and St. Petersburg areas in particular.
China is the world’s largest producer of plywood and its production has increased almost five-fold in the past decade, and is expected to continue to grow though less intensively, according to Raute. While the current technology is “highly manual and simple,” the industry is expected to develop rapidly during the next few years as the quality demands imposed by export markets require more modern manufacturing processes.
Plantation forests will enable plywood production growth in the coming years in Malaysia and Indonesia, according to Raute. Due to the change in the raw material base, Raute expects the existing machine base to be rebuilt and modernized.
Continued growth is expected in Chile as new production capacity is built based on plantation forests. For the big forest industry companies, plywood manufacture is an important part of managing the optimal use of wood. Although plywood consumption is on the increase in Chile, most of the plywood is still exported to North America and Europe.
North America is the world’s second largest plywood producer and the largest LVL producer, according to Raute, where the top five companies produce 65% of the plywood and 85% of the LVL. However, within the past decade, plywood production has declined by half. A housing recovery is instrumental in renewed growth.
Raute reported it has continued to invest heavily in research and development, including the transfer of its Chinese plant into larger facilities, thus enhancing the company’s production capacity, quality control and delivery times in that region.
by Web Editor | Apr 10, 2013 | Taking Stock
Story by Rich Donnell,
Editor-in-Chief
One of the comments I continued to hear from many industry professionals as we waded through the muddy recession together and as new housing starts sank to 500,000 annually (and even lower, but I couldn’t bear to watch anymore), was “just wait until we reach 1 million housing starts again. It’ll seem like 2 million!”
The point being that a doubling of housing starts would create such euphoria in manufacturing that 1 million might as well be 2 million. Everybody would be so delighted at the increased business, and running so hard in their business (and so unaccustomed to being so busy) that nobody would have time to pay attention to 1 million, or 2 million.
Well, are you starting to feel that way yet?
Among other things, our report in this issue on the domestic composite panel industry beginning on page 22 reveals several of the latest housing forecasts and all of them top 900,000 for 2013, followed by an increase to more than 1 million in 2014. Indeed these forecasters have been adjusting their figures slightly upward with some regularity.
I must say that we as a publisher of magazines in the building products industry have been busier as of late. Your activities, or lack thereof, in the mills and in equipment manufacturing shops trickle down, for better or worse, to us, just as new housing or no housing trickles down to you. Right now, it’s for the better. It’s easy for us to quickly research what years were better or worse. We simply go into our library, look at the annually bound issues, and can tell by the thickness of those bound volumes. The thicker the year the better, meaning more pages per issue, more advertisements, more articles.
However, I’m going to stop short of announcing that today we should be euphoric. And I’m guessing that most of you are in agreement with me.
(Then again, those who have not been in this industry for very long, say for just a handful of years, perhaps are feeling euphoric. Perhaps 1 million might as well be 2 million, compared to when they joined the industry, when it was 500,000. They’re too young to know any better.)
But for most of us, and especially for the ones of us who’ve been around a long time, say 30 years or so, this should not be euphoria. One million housing starts is what it says it is, 1 million, not 2 million. We can remember when 1 million housing starts was not very good; that it was an indicator of recessionary times; our bound volumes of magazines were not very thick in those years of 1 million.
And so to go back to the premise of this column, our friends may have been overstating it a bit when they said 1 million would seem like 2 million. Not to take anything away from the 500,000 where we were to the 1 million we’re now entering. The latter is certainly more enjoyable than the former. New projects. More jobs. Renewed spirit. Thicker magazines. No small matters, those. But, no, it’s not 2 million. You’ll know 2 million when it comes again. There will be no mistaking it. And you’ll say 1 million couldn’t hold a candle to 2 million.
Here’s to 2 million!
by Web Editor | Feb 18, 2013 | Update
U.S. Environmental Protection Agency (EPA) finalized changes to Clean Air Act standards for boilers and certain incinerators that it says will achieve extensive public health protections by slashing toxic air pollution, including mercury and particle pollution, while at the same time addressing feedback provided by industry and labor groups, increasing the rule’s flexibility and dramatically reducing costs. As a result, 99% of the approximately 1.5 million boilers in the U.S. are not covered or can meet the new standards by conducting periodic maintenance or regular tune-ups.
“As a result of information gathered through this review, including significant dialogue and meetings with public health groups, industry and the public, the final rule dramatically cuts the cost of implementation by individual boilers that EPA proposed in 2010,” according to EPA. EPA estimates that for every dollar spent to reduce these pollutants, the public will see $13 to $29 in health benefits, including fewer instances of asthma, heart attacks, as well as premature deaths.
The new rules set numerical emission limits for less than 1% of boilers—those that emit the majority of pollution from this sector. For these high emitting boilers and incinerators, typically operating at refineries, chemical plants and other industrial facilities, EPA is establishing more targeted emissions limits that protect public health and provide industry with practical, cost-effective options to meet the standards.
EPA has also finalized revisions to the Non-Hazardous Secondary Materials Rule to provide clarity on what types of secondary materials are considered non-waste fuels and provide greater flexibility in rule implementation. This final rule classifies a number of secondary materials as categorical non-wastes when used as a fuel and allows for operators to request that EPA identify specific materials through rulemaking as a categorical non-waste fuel.
Of most interest to composite manufacturers is the continued designation of resinated wood as a non-waste when used as a fuel, and its revised definition. EPA’s revised definition now includes additional materials in order to be more representative of the universe of resinated wood residuals that are currently used as fuels throughout the wood product manufacturing process, a change lobbied for by CPA. The definition, which now includes physical off spec materials, reads: “Resinated wood means wood products (containing binders and adhesives) produced by primary and secondary wood products manufacturing. Resinated wood includes residues from the manufacture and use of resinated wood, including materials such as board trim, sander dust, panel trim, and off-specification resinated wood products that do not meet a manufacturing quality or standard.”
by Web Editor | Feb 18, 2013 | Update
Empresas Copec reports that the rebuild of its Arauco plywood mill at Nueva Aldea, Chile, which was destroyed by fire in January 2012, is proceeding as expected. The $165 million (U.S.) plant will have a production capacity of 350,000 m3, which will be exported to markets in the U.S., Latin America, Europe, Asia and Oceania.
The mill is expected to start operations in late 2013 and reach full capacity in the first half of 2014.
Commencing on December 31, 2011, wildfires, exacerbated by high temperatures and strong winds, broke out in the Eighth Region of Chile. The fires destroyed the Nueva Aldea plywood mill and approximately 7,000 hectares of Arauco forest plantations, which represented approximately 0.7% of the company’s total plantations. The Nueva Aldea plywood mill represented approximately 14% of Arauco’s panel production capacity.
by Web Editor | Feb 18, 2013 | Taking Stock
Story by Dan Shell,
Managing Editor
This issue confirms two trends in the forest products industry: The U.S. housing market is finally showing significant improvement after the most drastic drop in history; and the reliance of Europe and the UK on energy wood fiber from the Southeastern U.S. is continuing to increase as reflected in new wood pellet plants announcements.
Several years after falling off a cliff starts-wise, the housing market is showing true signs of life, with activity picking up throughout 2012 and momentum carrying into this year. Prices for OSB almost doubled in 2012 and remain strong in first quarter 2013.
As noted in the cover story on page 12, the OSB segment of industry played it cautious last year as positive economic signals increased. But by the end of 2012 several OSB producers announced plant reopenings and startups in 2013, and others were taking a close look at adding shifts or otherwise increasing production.
Meanwhile, the feature article on page 16 details an exciting time in the wood-based energy industry: Increased usage of U.S.-sourced wood fuel pellets by UK and European power producers has gained increasing momentum in the past three to four years, doubling from 2009 to 2012 and is expected to double again by 2020 (if that long). In 2012, the U.S. surpassed Canada to become the world’s largest wood fuel pellet exporter.
According to a report from the University of Georgia School of Forest Resources presented to Southern landowners a year ago, there were 29 operating wood fuel pellet mills in the region, most of them targeting the European export market. From there, Southern industrial pellet capacity is set to double through 2014, as the last round of new plants announced the latter half of 2012 average more than 400,000 tons annual production capacity.
The rise of such a forest fuel industry makes for unprecedented dynamics in timber supply, as companies more allied with the energy market than traditional forest products markets compete for their share of raw materials.
Pulp and paper producers, wood fuel pellet mills and OSB plants all compete for the same log, and while the housing picture and overall economy has a good ways to go to truly heat up any procurement competition among the three, the potential is there for issues to arise in wood baskets where all three are strong players.
At last year’s Bioenergy Fuels & Products Conference & Expo held in conjunction with the Panel & Engineered Lumber International Conference & Expo in Atlanta, forester Dean McCraw of McCraw Energy noted two misconceptions that many have: the Southern U.S. pulp and paper industry is going away; and that there’s a “wall of wood” in the U.S. South that will supply all users.
He added that the timber base can be tough to navigate: A big issue is the changing dynamics of timberland ownership and the rise of timber management investment groups that tend to manage for sawtimber instead of pulpwood.
To ensure adequate raw material supply, OSB producers should establish strong and long-term relationships with pulpwood suppliers—and be well aware that one characteristic of wood fuel pellet plants and biomass power producers are long-term raw material supply arrangements that are attractive to loggers and other timber suppliers.
Depending on your location and wood basket, unprecedented timber dynamics and new players in the market will require more focused, long-term raw material planning.
