Strong demand and improving prices are continuing to lift producers of OSB, but in the chipboard and MDF sectors optimism is muted and manufacturers have their eyes on the recovery in housebuilding. While, the recent boom in US construction is seen as a glimmer of hope – what happens on one side of the pond tends to ripple across – one industry expert admitted: "In the broadest terms, the economy is still flatlining."

"When you look at individual market segments there are some bright spots there," said Alistair Kerr, director-general of the Wood Panel Industries Federation. "Local authority spending is down and commercial work has slowed, but the private sector is hopeful. There has been improvement, but it is a slow and steady slog, and there is a lot of competition. We certainly look to see increased activity – we are sure it will come and slowly it is starting to happen."

One indicator of confidence in the industry is investment, especially in the wake of the closure of Sonae’s Knowsley plant last year. In a deal thought to be worth around €19m, Kronospan bought the chipboard production machinery from the Knowsley plant in order to ship it to its operations in eastern Europe.

That’s not Kronospan’s only investment. For example, last year it spent £5.5m on a "natural authentic embossing" press at its Chirk factory.

This cutting-edge machinery enables the company to make an embossed-in-register melamine-faced wood-based panel product, which is used by the furniture, interior design, architectural and specification industries. It also launched a new range of "mirror gloss" melamine surfaces towards the tail end of last year, a move that required the construction of a new multi-daylight press, a tailored resin formula, and the development of a new process of timings, pressure heat and cooling.

Other investment has included the latest evolution in its Fresh range of surface colour and grain effects.

Prior to their launch this spring, the new surface design ranges were showcased at Kronospan UK’s annual Forum event at which manufacturer and distributor customers’ feedback was sought. In a new development, these visitors were able to use "augmented reality" software on Apple iPads to create room settings featuring different combinations of the latest Fresh concepts. The software took around three months to develop, from concept to reality, said a spokesperson.

In July 2013 Kronospan will launch Kronodesign, making available the most comprehensive range of panel products ever offered by the company, ranging from classic decors to new gloss ranges.

"Kronodesign offers 115 years of innovation and expertise from more than 30 cutting-edge manufacturing sites," said a spokesperson.

Egger investments
Meanwhile, Egger UK has started work on a £20m resin plant and is planning other projects worth around £25m. According to the company, the consumption of panel products in the UK still outstrips domestic supply. "A lack of investment in parts of our industry has led to almost 5 million m3 worth of chipboard and panel capacity being lost since 2008 in Europe, including the UK and Ireland," said Nick McClughin, head of marketing for Egger UK.

"From a UK point of view Egger has made a number of investments in the past few years, such as in new lamination capacity and securing recycled timber supply through a specialist subsidiary to name just two, to future-proof our business to ensure that we have the latest, most efficient production and that our customer base has a viable, long-term supply source."

"We see that some markets are doing well, whereas others aren’t," said Eduardo Fernández Capel, marketing and business development manager for Finsa UK. "For instance, MDF demand is steady and we are doing quite well in non-standard products. On the other hand, commodity products are under pressure due to the rising costs of their main raw materials."

Producers agree that little more can be done to combat rising energy, raw material and resin costs. Their own biomass energy projects are now in place and competition with energy generators for wood as a raw material is set to continue.

EUTR impact
Both Coillte Panel Products and Norbord reported strong activity in OSB as both a product in its own right and winning market share from tropical plywood. Mr Kerr acknowledged the possibility of increased OSB sales driven by the risk of falling foul of the new EU Timber Regulation (EUTR) for dealing in proscribed timber. However, he believes the purpose of the law is more important.

"There’s been concern about some of the markings and claims from some parts of the world and it’s difficult to stop something that is illegal. We hope this will raise awareness so that panels from legitimate sources will carry on and the illegal harvest and marketing will be addressed," he said.

Karl Morris, managing director of Norbord Europe, believes the EUTR is also most important to protect legitimate plywood producers and distributors, but also that it will provide opportunities for OSB. "OSB is our strategic product of choice because it is a good product. We have seen growth from 1 million m3 in 2000 to 5 million m3 today and there’s lots more headroom there. If you look at the panel market broadly, it has reached relative stability from 2009 with OSB strong and the particleboard and MDF balance not uncomfortable but not as good as we would like."

Andrew Macdonald, sales and marketing director of Coillte Panel Products, makers of Medite MDF and SmartPly OSB, said the EUTR effect would be a slow burn. "The OSB markets are buoyant and look to remain strong. The EUTR hasn’t had an immediate impact, but we can see as people wake up to what it means – the packaging side and distribution chains – it is becoming part of their buying thoughts."

Coillte Panel Products launched ToughPly as a fully-certified, legal and sustainable OSB3 alternative to tropical plywood. It is coated on two sides for enhanced moisture resistance and is designed for both structural and nonstructural applications. It also has zero added formaldehyde.

Its zero formaldehyde, fire retardant and low carbon products have sold well, and the company will launch an offsite construction product towards the end of the year. Meanwhile, Coillte Panel Products’ premium product, Medite Tricoya, which is made from Accoya modified wood feedstock, has seen a strong response in the market.

"It’s going into areas where it is replacing plastics and metals, and people are seeing it as an addition to their materials portfolio," said Mr Macdonald. "There have been classic swaps, such as Medite Tricoya for marine ply. But there have been some surprises; it has been used in art installations and a climbing wall on the side of an office building."

OSB versus plywood
In its SterlingOSB range Norbord has launched Sitecoat, to compete with plywood hoarding; Roofcoat with protective polyethylene film and waterproof joint tape; and Armourcoat to meet the UK Timber Frame Association fire spread prevention guidelines.

Added value has been driving the pace of change in the domestic market. "The core business is the unfinished boards where there isn’t a lot of margin," said Mr Kerr. "But there have been some very good new products."

Egger launched a new development for furniture whereby panels click together, rather than using glue and dowels. It said ‘clic’ was well received at Interzum and has received significant interest. It follows the success of Egger Decorative Protect, the T&G panels used exclusively in the Olympic Village, saving the contractor having to fit a further floor covering.

Egger has also introduced Decorative Protect Loft Panels, a P5 grade chipboard T&G panel for cloakrooms, utility rooms and garden buildings, as well as lofts. It is moisture resistant and can be walked on, and has a decorative oak-effect surface that doesn’t require additional floor coverings such as carpet or laminate flooring.

Mr McClughin said the use of acoustic panels was also growing within large offices, stadia, courtrooms and auditoriums. Its ProAcoustic chipboard-based panel has microperforations in the surface, which allow the sound to be absorbed by an acoustic fleece behind the decorative surface.

Lightweight panels
The move toward lightweight panels continues. Finsa is promoting Superpan Star, developed in collaboration with chemical giant BASF, in which the chipboard core of the Superpan board is infused with a polymer, Kaurit Light, to make the board 25% lighter than standard P2 chipboard. It can be painted or coated, and used in worktops, interior doors, furniture and components, wardrobe doors, partitions, trade show booths and caravans.

The company has also developed the patent protected SuperPan TECH P5 and P6 high performance boards for structural applications. They combine two outer layers of MDF with a chipboard core. "Its improved bending strength coupled with its high modulus of elasticity make it the right product for the most demanding load situations," said Mr Capel. "It allows the use of lower thicknesses than those used in traditional chipboard solutions."

Pfleiderer, now free from financial uncertainty, relaunched itself before the world’s furniture and interiors finishing suppliers at Interzum last month. Along with a new management and product structure, the Austrian company unveiled new products, including a new surface for its existing HPL grades.

"Fingerprints are almost invisible on HPL Xtreme," said Reinhold Hinterhölzl, HPL and elements product manager at Pfleiderer. "The new surface is warm and soft to the touch and has an excellent visual appearance – no matter which décor it is combined with."