LVL capacity is set to rise over the next 12 months, particularly in Europe where new lines and the expansion of existing production is likely to increase output by around 220,000m3. Current capacity from the existing four lines in Europe is around 530,00m3 per year.
Steico and Stora Enso are embarking on LVL production for the first time, with the former about to produce its first run in August and the latter’s start-up scheduled for the second quarter of 2016. Meanwhile, Russia’s Modern Lumber Technologies (MLT) is expanding and upgrading its production line this year.
Steico’s €60m investment in its new LVL line at Czarna Woda, in Poland involves the construction of a processing unit and related infrastructure. Initial production from the Raute line is set for 90,000m3 per year but this is only "stage one" of the investment programme and there is potential for more.
The rationale behind Steico’s decision to produce its own LVL is to create a steady and reliable supply of flange material for its increasingly busy I-joist production in Czarnkow, also in Poland – up to this point it has sourced LVL flange material from Metsä Wood and, more recently, MLT.
Fifty per cent of Steico’s LVL output will be destined for its I-joist production and, as the company also manufactures its own hardboard web at Czarna Woda, it will have complete control over supply of all the raw material components, thereby securing it from the vagaries of the market.
Stora Enso is investing €43m in a new LVL production line – also supplied by Raute – at Varkaus, in Finland. The line will occupy the company’s mothballed newsprint manufacturing facility.
The company has no I-joist production to feed but some of its LVL output will be destined for its own Hartola-based production of apartment modules.
The majority will be exported, however, mainly to the European market, with the UK seen as "an important area".
The development is being flagged up as an addition to the company’s product portfolio, complementing its cross-laminated timber (CLT) production and offering its customers "a wider range of wood product solutions to combine and serve new geographic areas and markets".
After production start-up in Q2 next year, the LVL line will reach its full capacity of 100,000m3 per year during a three-year ramp-up phase. The investment is expected to generate annual sales of €50m when run at full capacity.
Stora Enso’s LVL production will be "large-sized elements" but it has not yet released details of specifications and dimensions.
MLT’s current production capacity of its Ultralam LVL is 120,000m3 per year but this is expected to rise to 150,000m3 per year once it has finished its current upgrade. This, combined with the construction of a new pre-fabricated housebuilding factory and an OSB plant for OSB 3 and OSB 4 production (annual capacity 600,000m3), adds up to an investment to the tune of €300m over the last couple of years. And with LVL and OSB in its product portfolio, the company said it is thinking about the possibility of adding I-joist production to its mix.
Some of MLT’s LVL (and ‘Ultraboard’ OSB) output will fuel its timber house building factory, which should be operational this summer and will have an annual capacity of 250 units. The houses are mainly destined for the Russian market, although the company says some components will be produced for export.
The company is currently exporting around 80% of its production and cites Europe (including the UK), Australia, the US and the Middle East as key markets. It says the UK is an expanding market and is targeting further growth here. Clearly its own domestic market is crucial, however, as it claims a Russian market share of 90%.
Ultralam production is currently based on pine and spruce species but MLT is also looking to develop birch LVL. MLT has its own birch-rich forestry operations so this move would make good use of an abundant species. And the company says birch LVL would be a stronger product.
Metsä Wood pioneered the manufacture of LVL in Finland and has more than two decades’ experience in developing the market for its Kerto brand. While it doesn’t currently have plans to increase output, its existing LVL capacity of 235,000m3 from its two manufacturing facilities at Lohja and Punkaharju, in Finland puts it some way ahead of its European competitors in volume terms.
North American companies such as Boise Cascade and Louisiana Pacific (LP) are also targeting Europe for LVL sales, although it is thought unlikely that further capacity will come on stream any time soon as producers say they already have plentiful supply for both domestic and export markets.
The production in North America was established to service a market of 2.2 million housing starts at the peak and today it’s bouncing around 1.1 million, so there is ample capacity.
LP has two LVL manufacturing facilities, one in Canada and one in the US, with a combined capacity of 578,000m3. It also has a sales agreement with a US-based manufacturer so can "lean on" this third resource should the need arise.
The majority of the company’s I-joists are manufactured with a solid timber machine stress graded flange – high grade, small dimension timber is in good supply from the company’s US and Canadian mills – so LP’s LVL isn’t generally destined for this product. In fact, LP is now focusing on a laminated strand lumber (LSL) alternative to solid or LVL flanges. And it’s targeting the European market.
LP says it’s a lower cost alternative to LVL and is its largest and fastest growing product in Europe, particularly the UK, where it’s being well accepted by systems suppliers as a rimboard product. Belgian roof truss and timber frame customers are also using LP’s LSL for wall studs, in place of solid timber and the ‘Simply Better’ stud solution for interior partitions and traditional beam and block constructions is being promoted in the UK.
MBM Forest Products, which distributes LP’s engineered timber products in the UK, said that it was witnessing bigger leaps and gains for LVL than for I-joists but added that LSL was gaining traction. The company said it now supplies a large proportion of the UK’s rimboard using LSL rather than LVL and that trials for LSL studs were ongoing with a national housebuilder.
Merchants are also beginning to stock LSL studs alongside their traditional CLS studs and MBM said a major DIY chain was also considering stocking them.
Notwithstanding LP’s focus on LSL, the LVL market is undoubtedly becoming more crowded, but producers are maintaining the stance that more competition will be good for business – although new markets will have to be found.
"New players will help to develop the market and new applications for LVL, convincing European customers to switch from glulam and traditional timber," said Roman Chechulin, MLT’s head of international sales and marketing.
"There is major potential for LVL growth in Europe, in the US they have a market of 2 million m3 and Australia has the same size LVL market as the EU, despite having a population that is 20 times smaller.
Competition might be stiff in the future but we are sure we will maintain our advantage.
"Some traders will try to push prices down but it’ll have a very temporary effect," Mr Chechulin added.
Stora Enso’s motivation for entering an increasingly congested market is that it sees engineered timber’s potential to replace large dimension sawn products, particularly as urbanisation and the demand for renewable and sustainable materials rises, so its LVL production is likely to compete more with glulam than with other LVL applications such as rimboards and I-joist flanges.
With its long history of LVL production, Metsä Wood believes it’s in a strong position to face new competition and says it’s confident that "any new LVL capacity in Europe will only serve to grow the market and in doing so bring forward more opportunities for ourselves".
"We believe that the values we’ve invested in the Kerto brand and the investment that we have made in our systems and solutions across a wide range of sectors positions us well to face new competition," said Kevin Riley, Metsä Wood’s vice-president, construction industry.
He points to the company’s "Plan B" campaign (www.metsawood.com/planb) as an indication of how Metsä Wood is breaking the bounds of convention when it comes to LVL applications.
"It’s up to us to create new markets for LVL so that we can all survive," agreed Steico UK director Andy Moore. "And it’s good that other companies are out there [manufacturing LVL] because the more people talking about LVL the better. It’s a very good decorative product and it’s a very good structural product and our new line will enable us to produce large boards, so maybe there is more we can do in finding some big commercial applications for it.
"The LVL market in the UK is not that mature and the vast majority goes into rimboards, so for us that will be the quickest sell but at the lowest price – we have to keep trying to trade it up."
