Summary
• Norbord’s £25m investment at Cowie was completed last month.
• Output will be increased by more than 10%.
• Production efficiency will lead to reduced running costs.
• The green energy sector is competing for raw material and forcing prices up.

With the completion of the second and final phase of a £25m factory upgrade, Norbord now has one of the most efficient and productive chipboard production lines in Europe.

After a scheduled three-week shutdown to allow the old forming station to be dismantled and the new replacement installed, the first boards are now rolling off the line at the Cowie factory in Stirlingshire where Norbord’s Caberdek chipboard flooring is produced.

Now, in addition to flooring products, which have been the focus of production at Cowie, the plant is capable of producing a wider range of products for both domestic and export markets.

The earlier phase of the investment programme involved the installation of a state-of-the-art continuous press allowing the company to boost production by 10-15% and increase its share of the UK market for chipboard flooring. This latest phase replaces the forming station and pre-press components including dry goods storage and screening plant.

Forming line

The new forming line, where the wood fibre is sorted and brought together into a mat before being fed into the press, uses the latest technology to control the lay-down of the fibre particles to produce a more homogeneous product for the worktop manufacturing market.

This gives the company access to MFC lamination customers and offers the potential of exporting. We have not exported chipboard before but with current exchange rates there are opportunities and we can now meet the quality standards demanded by European customers.

As well as enhancing product quality, the completed production line is now faster, the old forming line having been the last bottleneck in the production process.

Before the new forming station could be installed, it was necessary to alter the building – including increasing the height of the roof – and refit new ancillary equipment, including two new cyclones.

Installation challenge

Following completion of the building works, the installation itself was a major project and completing it in just three weeks was a huge challenge. It started with the new plant being delivered and assembled outside the building so engineers could familiarise themselves with the equipment and debug any issues. Following this, the equipment was dismantled before being re-erected in its final position.

By the end of the third week of June the new plant was ready to be commissioned and production was successfully restarted.

While upgrading the production line will allow Norbord to respond to increases in demand for a range of chipboard products, its improved efficiency and reduced raw material wastage will also permit running costs to be minimised – an important factor in Norbord’s campaign to control rapidly rising input costs.

Norbord, in common with all manufacturers of wood-based products, is facing sustained competition for raw material supplies from the heavily subsidised “green energy” sector, which is forcing prices upwards.

Energy subsidies

Electricity generating companies are being incentivised through the Renewables Obligation (RO) to burn both virgin and reclaimed wood fibre – the raw material for wood panel products – as biomass fuel. The RO is a government subsidy funded by levies imposed on electricity consumers.

Supported by these subsidies, energy producers are now able to pay up to twice the price currently paid by the wood panel industry for its primary raw material. The result is that the cost of producing essential products for important industries including construction, packaging and furniture manufacture, is now rising fast.

Market distortion

The market distortion created by these subsidies has resulted in companies like Norbord seeing average wood prices increase by 60% over the past five years. And while efficiency improvements such as Cowie’s new chipboard production line will help offset a proportion of this cost inflation, they cannot halt or even slow down the inevitable rise in prices to the consumer.

Beyond that, government policies, which are supposedly geared towards the creation of a “low carbon economy”, have the potential to use billions of pounds of electricity bill payers’ money to deliver increased carbon emissions, reduced employment and increases in the cost of wood products.

With this investment Norbord has demonstrated its commitment to the industry, to protect jobs not only in its factories but also within the UK forestry industry, and to a reduced carbon economy. We will continue to invest wherever possible in improvements to our products and services, and will continue to campaign for the responsible use of wood and fairness in competition with other industries.