Today’s Agglo Group was originally established in 1958 in the West Flemish part of Belgium to produce flax based particleboard.
It was one of several mills set up in the area at around that time to use flax residue produced by the agricultural sector. Few survive today and those that do owe their existence to an ability and willingness to adapt, converting from flax to wood as a raw material as flax supplies diminished because of changing agricultural practices.
Agglo’s Interlin factory in Waregem in west Flanders began its conversion from flax to wood in 1968, producing around 20% of its output in wood based board at that time.
In the same year, the company invested in an additional new mill to produce wood based particleboard. This was in Genk in the west of the country, close to the German border. The new mill was named Agglo.
In 1982, the second generation took over the management of the group from their respective fathers who had founded it and today the company has four joint managing directors: Didier Goesaert, responsible for the Genk operation; Philippe Goesaert, responsible for purchasing and financial control; Piet Lagae, responsible for investment and maintenance; and René Declercq, commercial manager for the group.
The capacities of the group’s two factories had been small but, in 1985, investment was made in a complete new line in Waregem, replacing three old lines with one Dieffenbacher and Schenck discontinuous line. Its capacity is now 800m³ per day.
In 1991, the company decided on a new line at the Genk factory. This was again supplied by Dieffenbacher and Schenck and initially had a six-daylight press, which was increased to eight-daylight in 2000, raising its capacity to 1,400m³ per day.
Further expansion for the group came with the purchase of Hizodecor – a melamine facing factory which had been a major customer of Agglo – in late 1995. Following its purchase, the factory was modernised and now has a turnover of £12m in melamine faced particleboard, mainly for the non-slip flooring market, principally in industrial mezzanine floors.
The Agglo group specialises in the construction sector, rather than in supplying the furniture industry, where competition is much more intense in the particleboard market.
‘We have been producing fewer 15mm and 18mm boards and more thick speciality boards,’ said Mr Declercq. The company was therefore not a serious contender in the mass production market of particleboard for furniture manufacture.
Thus, when it came to deciding on the next major investment in new capacity for Agglo’s factory in Genk, the directors had three choices: invest in more particleboard production, requiring a continuous press line in order to be competitive; move into MDF production; or take the major step of building the group’s – and Belgium’s – first OSB line.
The first two options would have meant finding an almost completely new customer base; and taking on the major European particleboard producers in head-on competition, to get into the furniture and laminate flooring sectors with serious volumes.
Mr Declercq explained that the attraction of the third option – OSB – was that it would enable Agglo to extend its product range in structural panels for a market it already knew and served.
Thus the decision was made in 1998 to invest in an OSB line with an initial annual capacity of 250,000m³ and an ultimate capacity of 400,000m³. Dieffenbacher was again chosen to supply everything from the wet flake bin to the outfeed of the continuous press which is 33.5m long, extendable by 9m. Start-up was in May and current capacity is 270,000m³ with full capacity expected to be achieved by the end of the year. The extension to the press is planned for 2003 if the market goes according to plan.
European capacity
Those who have studied the figures for OSB production in Europe may question the wisdom of opting for an OSB mill.
‘Of course we are aware of the capacity in OSB,’ said Mr Declercq. ‘But I believe the market is going to grow for four main reasons. Firstly, continuous pressing technology will, in my opinion, make the board cheaper, or the margin bigger, because of faster pressing. Secondly, the thickness tolerance achievable by continuous pressing means there is no need to sand the boards, which leads to an increase in structural strength compared with sanded board. Thirdly, I believe that by using the technology from continuous particleboard and MDF production in Europe [unlike in most of North America], we can shorten the pressing time by using UF or MUPF resins. Finally, the industry still has a lot of marketing to do on OSB in Europe.’
He cited figures for forecast consumption growth for OSB in Europe in 2001 of 20% and claimed that the US is also talking in terms of 15-20% growth.
Mr Declercq also pointed out the environmental advantages of OSB over plywood and its potential to substitute for particleboard tongued and grooved flooring in France and Germany.
‘Having said that, there is a lot of OSB capacity and we are looking strongly at overlaying and surfacing it with, for example, polyester, to enable it to compete with plywood shuttering,’ he said. In fact Agglo has already installed a polyester coating line.
Large size panels are also seen as a potentially good seller, for roofing and sandwich and insulation panels which could be 6-8m long with no joints. Of course OSB has the structural integrity to be handled in those lengths. It would also be possible for Agglo to polyester-coat up to 9m lengths.
The company is also investing in a large cut-to-size facility, which it sees as a particular advantage in supplying the packaging industry with raw OSB.
Synergies
There are some synergies to be gained by having an OSB and a particleboard line on the same site. For instance, the chipper output for the OSB line is expected to contain around 15-20% of sawdust and this can be used in the particleboard line.
A new company, Agglo Wood, has been established to buy Silvester pine from a 250-mile radius of the Genk factory to supply the line. The lack of wood supply in the immediate vicinity is one problem Mr Declercq admits for the factory. However, he claims a big advantage in that the market for the product is in a 700km radius of the factory, taking in Copenhagen, Frankfurt, Paris, Stuttgart, London, Liverpool and many other European conurbations.
‘We are also looking closely at the Far Eastern market,’ said Mr Declercq. ‘Today, 15% of our turnover goes to South Korea, Japan, China, Taiwan and transport from Antwerp, 65km from the factory, to the Far East is a lot cheaper than to the UK.’
‘I know we have strong competition,’ he added. ‘We are all looking to enlarge the market and to increase consumption – together we [OSB manufacturers] have a task and a mission to increase the market.
‘I believe by 2003 or 2004 there will be a shortage of OSB. We should not look six months ahead, but five years ahead. I am sure it was the right decision.’
