The panels sector has enjoyed an improving market over the last 12 months, with production output from UK chipboard, OSB and MDF manufacturers increasing over the period.
"Manufacturers have been busy and this reflects the improved growth across a wide range of markets," said Alastair Kerr, director-general of the Wood Panel Industries Federation (WPIF).
He added that the pick-up in housebuilding has helped enormously, providing stronger markets for both construction grade panel products and for furniture-related products. The confidence this growth has engendered is tinged with some anxiety regarding the less favourable market conditions in Europe where support by the European Central Bank for quantitative easing has impacted currency exchange rates.
"It’s good for holidaymakers but not so good for UK exporters and, of course, it encourages imports," said Mr Kerr.
In fact, according to the Timber Trade Federation’s provisional headline statistics for 2014, chipboard and OSB imports combined increased in value by 22% in 2014 compared to 2013 and by the same percentage in volume terms in the 11 months to November 2014.
Meanwhile the value of MDF imports to the UK in 2014 was 10% up on 2013, while in volume terms they were up 16% in the 11 months to November.
Combine this with increased output by UK manufacturers and the resulting discussion is about oversupply and the expectation that prices will be under further pressure.
This, said Mr Kerr, is more likely to influence the pricing of products going into construction than those destined for furniture production.
"The furniture sector is very discerning and their purchasing decisions are often based on the finishes that are available – price isn’t always the sole determinant."
Bob Livesey, Egger UK managing director, agreed: "Imports don’t impact us too much in terms of our core [chipboard] business because about 80% of the product we manufacture now goes to the furniture manufacturing industry and much of that gets converted into melamine faced product. "A lot of furniture manufacturers need just-in-time and/or local supply and they are staying loyal."
OSB in particular is proving to be a "difficult" market from a pricing point of view, thanks to imports, but it is also a product that has witnessed significant growth.
"OSB has seen the most growth over the year," said Karl Morris, managing director of Norbord Europe. "This has been due to a number of factors, not least the growing awareness of the usage and benefits of the product when compared to more conventional construction and building materials such as plywood, as well as the cost savings to be gained."
He added that robust marketing of OSB, including by the long-running JOSB Done campaign, had been instrumental in raising the profile of the product and, ultimately, changing buyers’ behaviour.
The JOSB Done campaign has drawn to a close after nine years, having largely achieved its remit. "Walk down many a street and you can certainly see an increase in the use of OSB for a plethora of projects," said Mr Morris.
The strength of the US dollar had also persuaded some plywood users to convert to OSB, he said and the recent spotlight shone on Chinese plywood by the EU Timber Regulation’s UK Competent Authority, the National Measurements Office (NMO) "can only work in our favour over the long term". "We’re very pleased with the NMO report because illegal products entering the UK market are working against manufacturers who go through certification processes," said Mr Kerr.
While the MDF market is described as "fairly flat" and "steady", the chipboard sector has been performing well.
"We saw a very active Q2 and Q3 last year with a lot of demand and activity in the market," said Mr Livesey. "I think that drove a lot people to overstock in anticipation of a very busy final quarter, which didn’t really happen but we’ve seen reasonable activity since and are up on where we were this time last year, so we’re optimistic it’s going to be a good period."
Additional added value
Many of the panel board markets are mature, so in recent years there has been a surge in investment in value adding.
Finsa has seen strong growth in its Superpan Tech structural board in its versions P6 T&G for mezzanine flooring and P5 Encoform for formwork and in some quarters Superpan is seen as a substitute for OSB3. According to Eduardo Capel, Finsa sales director, among its advantages over OSB3 are "higher bending strength, less swelling when exposed to humidity, no sanding of edges required and higher density."
Finsa has also recently relaunched Superpan Décor through an exclusive agreement with International Decorative Surfaces: "Superpan Décor combines a unique baseboard with a mixture of classic and trendy decors," said Mr Capel. He added that Finsa has also launched Fibraplast Lucent, a high gloss melamine-faced MDF.
Coillte Panel Products’ major product development recently has, of course, been Medite Tricoya Extreme, the market for which "continues to grow in line with expectation". "Early acceptance has been gained in applications such as high end exterior doors, windows and joinery, roofline products such as fascias and soffits, cladding, both flat façade and profiled, shop fronts, signage and garden products," said Mike Harrison, interim marketing manager.
The company also launched new OSB and MDF products last year – SmartPly DryBacker and MediteVent, both of which have been well received, said Mr Harrison.
"SmartPly DryBacker has been used on hospital, university and housing projects while Medite Vent is now a trusted component within wall and roof construction requiring vapour permeability to eliminate issues of trapped condensation," he said. New for this year is SmartPly VapAirTight OSB3 which acts as a vapour and airtight barrier within passive design and low energy timber frame constructions. "It’s a natural partner to Medite Vent," said Mr Harrison. Other developments in 2015 will focus on extensions to the company’s flame retardant product portfolio, he added.
Norbord has also focused on boards designed to reduce fire spread in timber frame buildings during construction – SterlingOSB FS-300, SterlingOSB FS-MgO and SterlingOSB FS-MgO 150 were all launched last year.
The new laminate flooring collection launched by Egger last year was "very well received", said Mr Livesey, as was the ST27 range. The range comprises 10 decors in neutral solid colours as well as a painting grade option – a primed board that can be painted by the customer.
"It has a deep textured wood grain effect and we’ve been successful in getting people to switch from more traditional – and expensive – veneers."
This appearance of solid wood is in demand, he added. "About 18 months ago we launched synchronised pore Feelwood,where the grain on the print is mirrored by the texture, resulting in a very realistic copy of wood veneer, but at a much cheaper price. It’s new technology and we’ve seen very good sales development on the collection."
Textures on trend
Finsa also highlighted the popularity of "embossed-in-register" finishes in melamine-faced boards, where the texture is synchronised with the printed pattern. The Jazz range in its Superpan Décor collection offers this feature.
"Our design team is constantly scouting new trends around the world, visiting fairs in our sector and other related industries," said Mr Capel. "We also collaborate with leading design and trend forecasting consultants." Investment in manufacturing technology has continued apace, both to boost capacity and to add more value.
Finsa’s second Superpan factory in Portugal is going ahead as planned, with the line due to start up next summer. It has also reached an agreement with Proteak in Mexico jointly to operate an MDF/HDF plant that is being built in the country.
Closer to home, Coillte Panel Products is embarking on a €59m upgrade of its SmartPly mill in Waterford in Ireland. This will include a state-of-the-art Conti-Roll press and associated building, as well as new forming and finishing equipment.
Initial site works commenced in November last year and groundworks are now at an advanced stage. The new press has a designed capacity of 500,000m3 per year and production is now expected to begin early in 2016.
A new innovation centre will act as a hub for the company’s innovation, R&D and production teams in the development of market-focused specialist products for the company’s OSB and MDF product ranges.
Coillte Panel Products is also committed to working with Tricoya Technologies Ltd on the development of a dedicated Medite Tricoya Extreme production facility in Clonmel. "As with all new technologies, these things can take time but developments are continuing," said Mr Harrison.
Last year Norbord submitted council planning applications to the Highland Council for major capacity expansion at its Inverness OSB factory, though a final decision on investment has yet to be taken by the Norbord board. The plant currently operates two daylight presses.
Egger’s Hexham facility has undergone a complete replacement of processes since 2006, starting with the new chipboard line in 2007. "Since then we’ve invested on average £20m a year," said Mr Livesey.
This has seen the company install new melamine lamination lines and update old ones during the last few years. A new Dynasteam system was also added to the chipboard lines last summer and this has resulted in a 10% increase in production throughput.
A second paper impregnation lamination line is being finalised and is about to "go live" and the company is also in the final throes of updating its on-site Campact resin production facility. This supports both chipboard production and the impregnation process and the three-year project has cost £30m, said Mr Livesey.
This year Egger will build a new warehouse and despatch facility, to the tune of £4m, which will be operational by the end of autumn.
Further developments are planned but are "being kept under my hat", said Mr Livesey. Suffice to say that, as with other panel producers, the focus is on moving forwards. "It’s an ongoing process – and if it stops you go backwards," he said. "The focus is always on being in a good place in the future.
