The final phase of a £25m investment in Norbord’s Cowie chipboard plant will see the factory widen its customer markets and help offset the rising cost of raw material in the face of competition from the energy sector.
Norbord deputy managing director Dave McElroy told TTJ the investment would improve and extend the operation, helping the factory move beyond a sole focus on the construction market to serve the furniture and worktop markets.
The investment, which will include replacement of the forming station and renewal of other pre-press components, is designed to provide Norbord with added operating flexibility, a broader product mix, further quality improvements, capacity growth of more than 10% and a reduction in total manufacturing costs.
“We have been focused on construction to the exclusion of the furniture and other sectors,” said Mr McElroy. “The changes we are making allow us to serve these other sectors in the UK and Europe.”
The product range at Cowie will be broadened from P4, P5 and P1 products to include all grades of products, including those for the worktop market.
“This [worktops] is not a new market for Norbord but the finer tolerances we will now be able to get will mean a more homogeneous and consistent surface.”
Norbord announced the next investment phase after the mill returned to full capacity in the second quarter. It has also sent a letter to customers last week flagging up the main points of the Wood Panel Industries Federation’s Make Wood Work campaign – designed to highlight the threat posed to the panels sector by energy companies’ ability to pay more for raw material through subsidies.
The finer tolerances in board production will mean less waste, which will help offset the increased cost of raw material.
“Supplies of raw material are not under an imminent threat in the next quarter or two but this is the start of a trend [competition with energy sector] which is quite significant,” added Mr McElroy.
“The UK government I believe is listening probably better than some other governments on the continent. But we still see the current subsidies for electricity generation as totally inappropriate.
“Traditionally, we have got all of our wood from the UK and that’s our intention in the future. When we had the cold snap earlier this year we did import wood on a spot basis, but that’s not our future.”
The Cowie improvements will be carried out in two phases – in the fourth quarter of this year and first quarter of 2011.
Norbord installed a new continuous press several years ago which has allowed the company to grow its market share in flooring and other construction-related products.
