Summary
• Domestic production and import volumes are down in 2009.
• UK campaigning to win users over to OSB continues.
• Medite hopes to produce modified MDF panels.
• New BM TRADA Certification is improving confidence in Chinese plywood.

Despite economic gloom, 2009 is proving an interesting year for the wood-based panels sector, with new applications, inspiring new décors, moves towards securing structurally-certified Chinese plywood and evidence that environmental certification is on the increase.

The statistics show what an extraordinary year 2009 has been – import levels for all plywood types were down 25.5% for the first half of the year (source: TTF/timbertrends), while chipboard imports fell 54.7% and MDF by 24%. Fewer imports would ordinarily mean more business for domestic producers, but the scale of reduced demand has meant downtime at UK factories, while increased manufacturing costs have brought their own pressures. However, prices have been rising and there is a growing consensus that we have probably reached the bottom of the economic dip.

Sonae UK sales and marketing director David Chapman takes encouragement from the latest NHBC stats which show a 4% increase in housing starts, but he said this was not yet feeding back to the T&G flooring market.

“We could sit and wait for things to turn around, but we have not taken that strategy and have moved into areas that are showing reasonable levels of activity,” he said. “We have seen our melamine levels grow very quickly over the last 12 months and are currently 90-95% loaded on our plants.”

But he expressed concern over low supply chain stock levels, which could lead to problems if activity increased sharply. “Lead times will go up. Next year people will have to remember that manufacturers cannot be an external warehouse for distributors’ industrial customers,” he said. “Distributors have an equal responsibility to hold stocks to service the end user at the required levels. The emphasis should not all be on the manufacturer.”

Sonae is discussing price increases with customers now, with rises of about 3-4% possible before Christmas, due to increased chemical, timber and transport costs.

Kronospan marketing manager Paul Duddle said that although green shoots of recovery are still tender, the market was on “the cusp of a very exciting time”.

The company has spent the past year reassessing its offering, conducting market research and forecasting, as well as completing investment in resin production facilities and improving environmental criteria.

On the MDF side, Geoff Rhodes, marketing and business development director of Coillte Panel Products, said the industry has been forced to adapt by taking downtime. “Maybe we are bumping along the bottom now and moving into 2010 we could see a steady improvement.”

Mr Rhodes said MDF price recovery in 2009 had come after prices had fallen to unsustainable levels and he is hopeful of further price recovery, with a slow and steady improvement in confidence and demand.

A major development for Coillte Panel Products is the joint development agreement with Accoya modified wood creator Titan Wood to commercialise modified MDF panels. Coillte Panel Products believes this could open new applications for panels – in shopfitting, exterior façades, garden furniture and even decking, with a product that could potentially be more stable and durable than anything MDF can offer currently.

Medite has an exclusive licence to develop, manufacture, market, distribute and sell Tricoya modified panels, though it could be two or three years before the product is on sale.

It has promised to bring new products to market in 2010 but is already producing thicker boards.

The JOSB Done campaign to promote markets for OSB, supported by the Wood Panel Industries Federation (WPIF), manufacturers Norbord and SmartPly and resin supplier Huntsman, is now in its fourth year.

According to WPIF director-general Alastair Kerr, interest in OSB is at an all-time high “especially as builders are realising its viability in the current climate”.

JOSB research of merchants and builders found that around 78% of both parties would opt for OSB over plywood, “which is encouraging news for our cause”, said Mr Kerr. “For those who said they wouldn’t choose OSB over plywood, it was a question of not knowing enough about OSB to make an informed choice.”

Mr Kerr described this as a long overdue shift, saying established purchasing habits meant merchants and builders were sometimes slow to pick up on the possibilities that OSB presented.

International Decorative Surfaces (IDS) said the concentration of business activity on government infrastructure spending had made FSC and PEFC certification a “given” without which products are not even considered.

IDS supply chain director Steve Rickers also said more wood products are being considered for wall panelling solutions, providing quick on-site fixing with low labour skills. “This then places more performance demands on decorative panel producers to make panels that conform to building standards for fire resistance and sound and thermal transmission values.

“Wood panel producers are also having to provide a consistently-performing panel in terms of its function as a platform for a decorative paper or foil against a background of less new wood being available and more recycled fibre having to be incorporated in the mix.”

IDS believes there are great opportunities for Decorative Panels in the hotel sector. It has just published Surfacing Solutions for the hotel and leisure industry – a 28-page guide to provide specifiers and designers with a working tool for selecting appropriate surface finishes, covering solid surfacing, anti-bacterial laminate, exterior cladding, flooring and wall panelling.

“Hotel refurbishment and new build are valued in the billions of pounds, representing one of the UK’s largest industries with over 13,000 hotels in the UK,” said Dave Huggins, IDS key account manger. “There are over 200 hotels being built and more being planned in preparation for the Olympics. Most hotels are renovating on a regular basis and will need easy access to surface solutions.”

Chinese plywood is also making the news. RKL Plywood and Premier Forest Products have received BM TRADA Q-Mark certification for plywood produced in China, showing the product is fully compliant with the Construction Products Directive.

Richmond Plywood is confident of expanding its market share in the UK, especially with its distinctive blue-coloured Ultraform formwork panel.

Richmond’s UK agent AS Muskat Panel Products said the medium density overlay panel market had experienced a 30-40% downturn, but the reusable nature of panels, coupled with future business opportunities, including a possible increase in nuclear power station construction, gave it confidence in the future.

Ultraform, made from Douglas fir veneers, is produced at Richmond’s plant in British Columbia and now uses a high resin content paper.

The use of non-traditional core material such as palm in some Chinese and Malaysian hardwood-faced plywood is also a developing trend. The TTF recently prepared a paper on the subject in response to questions.

Plantation material in plywood could be a growing factor, given timber supply shortages and awareness of environmental issues.