V PLY ISIONS RAUTE CUSTOMER MAGAZINE ISSUE 5, APRIL 2005 Solutions for profitable production Global LVL business outlook Next generation of veneer dryers Raute is strengthening its parquet expertise Securing the value of your investment Contents 4 8 12 15 18 20 21 Will the boom in LVL production and consumption in North America and Australasia spread to other regions? The next generation in veneer drying technology Introducing Raute Jyväskylä Providing a wide variety of panel handling and value-added solutions Raute strengthens its parquet expertise Raute Services helps to secure the return on your investment Arauco's Itata greenfield plywood mill starts up Raute's Ligna+ 2005 participation: Concentrating on things that matter most Profitable wood panel production as our common goal When writing this it is almost exactly one year since I assumed the challenging job as the President and CEO of Raute. A lot has happened since then. Last year was a good year for almost all of you in the wood products industry. As a consequence, we equipment suppliers saw a healthy increase in demand. The market outlook seems to remain much the same for the near future. We at Raute believe that those in the industry, who are best equipped to respond to the customers' expectations and keep their costs down can best benefit from this market situation. Raute can provide you with the latest and most advanced technology to ensure the best possible raw material recovery, labor productivity and panel quality. When all that is done by machines having the highest capacity in the industry, the rest is in your hands, and the markets', of course. We all at Raute share a common goal of being and remaining the leading supplier of production technology and services for the wood products industry. We realize we can only achieve and maintain this with the quality of our products and services and by providing true added value to our customers' business. We apply our technology and other expertise globally, but we always adapt it to local needs. Protecting our natural environment is a common concern to all of us. We at Raute apply the ISO14001 environment and ISO 9001 quality management systems in our operations. However, I believe that we have a bigger input in the nature conservation, when we provide our customers with technologies that utilize the natural resources needed for panel production in the most efficient way. Whether it comes to fiber, glue or energy consumption per produced panel, our technology helps you conserve our natural environment at the best. Our products and services cover the entire business processes of our customers. We provide the full range of technology, from log handling to packaging of finished products, as well as services for the entire life-cycle of the production lines and machinery we supply. Our technological competence is broader than that of any our competitors'. Our product range gives us a unique opportunity to develop, together with you, the panel production process as a whole - not only in parts. The intensive and continuous development of our technology enables us to provide you regularly with new means to develop your business and operations. The co-operation with you is most valuable when developing the new technologies - some our most successful technologies are results of joint projects with our customers. The market conditions and demand for our products and services is now more aimed at smaller projects and improvements. For such deliveries, short and reliable delivery times and, even more importantly, short installation and start up times are critical. We have developed our capacity to respond to that challenge with new procedures and resources. The elements for profitable and environmentally sustainable panel production do not only come with the best equipment. Equally important is to keep them running continuously and efficiently, and even improve their performance throughout their service life. Maintenance services is the fastest developing business in Raute. The Raute service teams around the globe certainly offer interesting opportunities for you to develop your operations and efficiencies. There is a lot potential for us to jointly develop the maintenance of your equipment. Thank you for your trust in Raute during my first year in this duty. I will do my utmost to ensure Raute will be worthy of your business also in the future. Tapani Kiiski President and CEO Raute Oyj 3 PL VISIONS RAUTE CUSTOMER MAGAZINE ISSUE 5, APRIL 2005 Y 4 BIS Shrapnel Forestry has just released a comprehensive multi-client report "Structural Engineered Wood Products in the Pacific Rim and Europe: 2005-2010". The brochure and extract can be viewed on the website at www.bis.com.au, or contact bneufeld@bis.com.au Will the boom in LVL production and consumption in North America and Australasia spread to other regions? It will take time and considerable marketing effort to duplicate in other regions the strong growth in LVL consumption and production that has occurred in North America and Australasia. BY BERNARD NEUFELD, DIRECTOR FORESTRY, BIS SHRAPNEL PTY. LTD., AUSTRALIA Production / Consumption Development Expansion Maturity I-joists LVL Glulam Time Chart 1. Product Life Cycle of Engineered Wood Products, North America The markets for structural engineered wood products such as laminated veneer lumber (LVL) and I-beams are in the early stages of the product life cycle. While a more competitive global market has developed as a result of the rapid expansion of production facilities in North America and Australasia over the past five years, there are still significant opportunities for market and industry development. LVL is at the leading edge of these developments and opportunities. The North American and Australasian LVL industries are booming, and there are signs of significant development in Europe, Japan and China, but in South America and other Asian regions the life cycle for this product has not yet begun. LVL is one of a number of engineered wood products that are emerging as alternatives to lumber. LVL is an engineered wood composite produced from rotary peeled veneers, glued together with the grain oriented along the length of the panel. The panel is then re-sawn into lumber. In several countries in Asia LVL is produced in conjunction with plywood. Glulam, made from small dimension finger jointed lumber is a mature engineered product that has been used for many years, and competes with lumber and LVL in structural applications, such as beams and headers. I-beams are manufactured by combining a flange made of LVL and a web made of OSB. Other materials, such as solid wood flanges and plywood webs are also used to manufacture I-beams. The use of LVL flanges in I-beams manufactured in North America has helped to drive the use of LVL for structural applications. LVL is also used for non-structural applications, especially in Japan, where it is used for applications such as window and door frames, and joinery, as well as partitioning studs. LVL Production The production, early development and commercialisation of LVL was pioneered by TrusJoist (now a Weyerhaeuser company) in North America, and by Finnforest in Europe. While the production of struc5 tural LVL has expanded enormously in North America over the past decade, and more recently in Australasia, with a wide range of companies now producing LVL, it is produced mainly by just one company, Finnforest in Europe, and one company, Keytec in Japan. A number of other companies in Japan, China, Vietnam and Southeast Asia produce lower strength LVL for non structural uses. With the restructuring of the North American industry over the past five years, Weyerhaeuser dominates production in North America, following its acquisition of TrustJoist, MacMillan Bloedel and Willamette. However, the competition is strengthening with a number of other companies, including Boise Cascade, LouisianaPacific, Roseburg, Tembec, Georgia-Pacific, Pacific Wood Technologies, West Fraser, and International Paper all producing LVL. Actual 3.5 The market in Australasia has also become more competitive, with five companies now producing LVL, including Carter Holt Harvey in Australia and New Zealand, Juken Nissho and Nelson Pine in New Zealand, and Wesbeam in Australia. Production shares are more evenly distributed in Australasia, although Carter Holt Harvey has the largest share of the market, followed closely by Juken Nissho. Drivers of consumption The rapid growth in the consumption of engineered wood products, and LVL in North America was driven in part by a concern about the long term availability of resources for the production of lumber. In the early 1990's the availability of logs from old growth forest was increasingly constrained because of the spotted owl movement and other environmental concerns. Forecast 3.0 2.5 2.0 1.5 -- Total -- United States -- Canada 1.0 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Chart 2. North American production of Laminated Veneer Lumber, 2000-2010 Actual Forecast 5 250 4 200 3 150 2 100 1 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 0 -- Softwood (LHS) -- Hardwood (LHS) -- LVL (RHS) -- I-beams (RHS) -- Glulam (RHS) Chart 3. Consumption of solid wood, LVL, glulam and I-beams, Australia, 2000-2010 6 Industry responded with the development of engineered products to utilize logs more efficiently. Engineered wood products such as LVL and I-beams ultimately were found to perform better than solid lumber for many applications, reduced building construction costs, and rapidly penetrated the market. They replaced not only lumber but also steel and other structural building products. The demand for LVL grew much more rapidly than growth in the building industry in North America throughout the 1980's, the 1990's, and the first five years of the new century. LVL was also used for flanges in the manufacture of I-joists in North America, which helped to drive the consumption of LVL. I-beams were marketed as a flooring system by the major producers. This required them to provide computer assisted design and other support services to large builders. The large builders in turn were able to build houses in considerably less time, saved on construction costs, and had the perception that they were using a superior product. Australia also experienced pressure on its native hardwood forest resources over the past decade. The native hardwood resources were rapidly taken out of production, and replaced by plantation grown radiata pine softwood resources. Over the past two decades, the building industry in Australia replaced much of the hardwood that was used for structural applications with softwood. This left a gap for heavy structural applications, which was met in part by engineered wood products such as LVL and I-beams. LVL and I-beams were initially imported to Australia from North America, and over the past five years, local production facilities have been established to service the market. Australia now has sufficient production capacity to be in a position to establish export markets for LVL. In Europe, LVL consumption has expanded but not as rapidly as in North America and in Australasia. This in part reflects the lack of pressure on forest resources, as well as a lower dependence on wood in housing construction in many European countries, and the reliance on architects and smaller building companies in the larger markets such as Germany. In the United Kingdom, and in the Scandinavian countries, the building companies tend to be larger, and are more amenable to using the building and flooring systems, which the manufacturers of I-beams and LVL provide. LVL Production (million cubic meters) Thousand cubic meters Million cubic meters In Japan, the use of LVL is expanding gradually beyond non-structural applications. As residential builders increase their use of wood to make houses more resistant to earthquakes, LVL is likely to become more prominent over time. Japan, however, has a strong preference for glulam, which is considered to be a higher quality product than LVL. China, which has in recent years become one of the world's largest exporters of plywood, is now also producing LVL, mainly for export to Japan, and pending resource constraints, it could eventually be a major producer of LVL. Other Asian countries, such as Malaysia, Indonesia and Vietnam, are currently experiencing major constraints on their traditional resource supply, tropical hardwood. This would suggest that a natural evolution for them would be to shift to the production and possibly consumption of engineered wood. Their major problem is finding sufficient resources to produce LVL, in addition to meeting the needs of the huge plywood capacity that they currently have. Their building industries also tend to use concrete and brick rather than timber as construction materials. South American countries such as Chile, Argentina and Brazil currently do not produce LVL, but they have significant resources available for the production of LVL and other engineered wood products, and have a tradition of producing plywood and wood panels. They are potential producers and consumers of LVL. However, they are more likely to become exporters. One of the major constraints to the expansion of LVL in countries outside North America and Australasia is the need to convince builders and end users of the superior qualities of LVL. This is not easy to achieve in European and Asian countries that rely on building methods that use concrete and brick, and in Asian countries where resistance to humidity, fire and termites is as important as strength, dimensions and stability. It will take time and considerable marketing effort to duplicate in other regions the strong growth in LVL consumption and production that has occurred in North America and Australasia. 7 The veneer production process has bottlenecks, which, if not corrected, will cause low productivity, unacceptable veneer quality, underutilized capacity and poor recovery. 8 The next generation in veneer drying technology BY RICK MASSEY Relieving production bottlenecks, although desirable, may only push the problem further downstream. Consider veneer peeling. Most modern mills can produce more veneer than they can sell or further process. The downside to high veneer production is that the dryers must operate around the clock to dry all the veneer produced because it has a limited shelf life and it will deteriorate quickly if left green. Even after drying, it must be laid up into panels or stored. Either way, there is considerable cost. Drying veneer is time-consuming and expensive. Mills cannot simply turn up the heat to dry more veneer faster. Drying parameters must be strictly followed otherwise the wood quality will suffer and the risk of product failure will be too great. Drying also consumes a lot of energy, due to the high temperatures required. Energy is expensive so every effort must be made to conserve energy and utilize it wisely. Considering these demands, Raute has invested heavily in the science of veneer drying. Our R&D has created a drying solution in which all the various parameters required for successful drying have been carefully calculated and applied. Highly efficient and modern drying line at UPM-Kymmene Pellos 3 mill. PL VISIONS RAUTE CUSTOMER MAGAZINE ISSUE 5, APRIL 2005 Y 9 Dryer Feature Benefit - Eliminates lost production time during load changes. - Reduces chances of gaps between sheets in the dryer. - Helps to better utilize heat energy inside the dryer. Reduces splitting caused by manual feeding. Prevents double feeding. Reduces the risk of plug-ups in the dryer. Lessens potential for injury to mill personnel. More than one drying configuration and solution There is not a single drying solution to meet every customer's needs. A variety of different dryer configurations to suit a variety of drying needs are available: Sheet accumulator 4-deck jet dryers are typically used to dry three loads of 4x8 veneer with a single operator whose job is to monitor the automatic feeding process. Depending on the species dried and the preference of the mill, the dryer is supplied with or without zoning, humidity control and automatic speed control. 6-deck roller jet dryers have all the features and benefits of a 4-deck dryer, however, they offer 50% more capacity without demanding any additional floor space. Roller jet screen dryers are often chosen for drying thin hardwoods. They have wire mesh belts that transport veneer between high-velocity jet boxes. Variable width dryers are able to handle various combinations of sheets sizes, including 2 x 8ft. wide, 1 x 8 ft. wide plus 2 x 4 ft. wide, 3 x 4 ft. wide, 4 x 4 ft. wide. Automatic sheet feeder Servo-positioning of the feeder tipple - Faster, more accurate positioning of the tipple. - Enables more veneer to be dried. - Optimizes feeding of thick/thin veneer. - Speed matching overlaps veneer precisely. - Vacuum control lessens damage to veneer. - Eliminates manual controls and operator guesswork. - More reliable - automatically monitors and adjusts. - Automatically controls sheet feeding and unloading. - Automatically controls dryer temperature. - Ensures that the atmosphere in the dryer is at the optimum level to produce good quality veneer. - Alerts operator to potentially catastrophic failure. - Visually identification of moisture pockets allows the operator to spot problem areas in the dryer. - Moisture limit setting enables moisture limits to be set for different areas of the veneer sheet. - Moisture data is used to automatically control dryer speed and redry %. - Provides visual confirmation of dryer performance. - Eliminates clutch/brake assemblies and the high amount of maintenance required. - Provide tighter control when unloading veneer onto the outfeed conveyor. - Eliminates wait at 90º transfer.- Raises overall dryer production. - Stacker infeed easily handle the higher volume of sheets. - Installation requires minimal disruption to dryer operation. - Raises dry end production. - Reduces redry labor costs. - Lowers energy consumption. - Enables fully-automatic grading operation. - More accurate than human operator - 95%+ on-grade. - Repeatable grading decisions. - "What if" and "critical defect" analysis. - High-speed stacking of full sheets. - Produces squarer loads. - Less damage; less risk of injury. Feeder roll speed and vacuum control PLC control Automatic humidity, damper and temperature control Plug-up detector and alarm Moisture control with moisture mapping and moisture limit setting Raute offers a choice of dryers: Modular dryers are constructed in pre-assembled units for fast installation. Quality is also guaranteed because they are factory assembled. A suitable choice when freight is not a major consideration. Semi-modular dryers require sub-assemblies to be welded at the point of installation. On-site QC is important and for this reason a Raute On-Site Supervisor generally supervises the work. Flat pack or KD dryers are delivered in component form for assembly on site. Preferred when transportation costs are an issue or when the customer wants to use a local sub-contractor. In this case, certain components, such as the dryer skin, may be obtained locally and at lower cost. AC Vector drives for fans, unloader Dual-level outfeed Veneer sheet refeeder Automatic camera grading Automatic dry veneer stacking 10 Special operating features set Raute dryers apart Numerous features have been designed into our drying systems with the aim of reducing operating costs, lowering maintenance costs, improving veneer quality, increasing dryer utilization and improving the flow of materials flow through the drying process. The table on the left lists some of these important features and benefits they produce. Special design features improve performance The many design features available as standard in Raute dryers are often sold as optional equipment or not supplied by our competitors. Our main design principles are to offer the most efficient drying system available; to supply dryers that consistently produce optimal quality veneer; to maintain the highest possible thermal efficiency; to offer the highest level of automation available and to ensure that the dryer shows a satisfactory return on investment. With these goals in mind we are able to offer the following features: Prefabricated modular construction of a Raute 6-deck dryer Short installation time High precision Tight construction Built-in, insulated floor: The dryer is installed on rails, eliminating a concrete foundation and reducing installation time. The floor adds strength and rigidity, simplifies clean out, reduces the fire hazard and minimizes heat loss. Construction: Dryer sections are welded or bolted together. High temperature paint is applied to all surfaces. The combination of high-quality manufactured components, tight construction and surface treatment produces a long lasting, corrosion-resistant dryer. Thermal efficiency: Seam welding, tight construction and an integrated floor keep hot air inside the dryer. Doors and panels have 4" thick mineral wool insulation and special seals around every door. Hot air distribution: Highefficiency radial fans provide a stable and powerful airflow. Doors: Various types are available. A particularly efficient model has a cam hinge and a single handle, which enables the door to be closed without pinching the flexible Kevlar/wire mesh seal. Jet boxes: Specially designed to create a scrubbing effect on the veneer. The high velocity hot air, special nozzles, tapered design and radial fans provide even pressure across the dryer so that veneer is dried evenly. Drive towers: Individual drives control each deck. If a plug-up occurs, one deck only need be stopped. Hot section exhaust evacuation: Ties all the exhaust ducts into one main duct equipped with a fan for rapid evacuation of fumes. Fan screens: Prevent debris from passing through the fan and plugging up the radiator fins. Helps maintain proper airflow. Automatic lubrication: Each hot section fan is equipped with an automatic lubrication system that applies grease to the two bearings. Sealing cells: These prevent wet air and blue haze from escaping into the mill and prevent water from falling onto the equipment. Raute's long experience and excellent refences in drying lines prove our ability to make flexible and tailormade drying solutions to our customers. As a turnkey supplier, we can offer a suitable solution for your specific needs including automation, camera grading and moisture measuring. A Raute dryer is always integrated to other Raute machinery and the mill-wide Management Information System (MIS). Evaporation of free and bound water from wood cells PL VISIONS RAUTE CUSTOMER MAGAZINE ISSUE 5, APRIL 2005 Y 11 Introducing Ra BY RICK MASSEY Providing a wide variety of panel h Flexible, efficient and tailormade overlaying line. In 2001, Raute strengthened its position in panel handling and value-adding with the acquisition of Jymet Oy, an engineering and manufacturing company located in the city of Jyväskylä, 300 kilometres north of Helsinki. This city of eighty-five thousand people is a major ski center and home to one of Finland's leading universities. 12 aute Jyväskylä For both companies, the acquisition offered immediate benefits with Raute adding a new level of panel handling expertise and Jymet able to benefit from the depth of resource and global presence that came with being part of Raute. Jymet Oy was established in 1984 for the purpose of providing the Finnish pulp and paper industry with feeding and recycling equipment. Soon after it began, management set about diversifying the company's product line, offering chip and waste conveying systems to the Finnish plywood industry. Expansion into panel overlaying followed, an area of technology for which Finland is well known around the world. From local to global Further product diversification followed as the company began offering press equipment, overlay film application and handling lines, panel handling and further processing lines, and custom-designed equipment for making large-sized specialty panels. Having established a growing product line along with recognized expertise, the company was able to capitalize on a growing domestic market while, at the same time, exploring opportunities outside Finland. From the late eighties onwards the company enjoyed significant growth, culminating in a sizeable export project to Sweden in 1994. This was followed by projects in Belarus, Indonesia and Latvia. All during this time the company continued to invest in product development, particularly in veneer layup and panel handling, as well as in highly modern overlay film apply system. Wide range of products The acquisition and subsequent investment in the Jyväskylä facility has provided Raute with an expanded product range and some niche marketing opportunities. Currently, Raute Jyväskylä's product range includes: handling and value-added solutions Panel feeding, stacking and turning machinery Horizontal and vertical panel repair lines Panel trimming lines Panel sanding lines Edge profiling and edge painting lines Packaging lines Multi- and single-opening overlaying lines Overlay film application machinery Vision-based panel handling applications 13 The significant Pellos deliveries Raute Jyväskylä was also a major supplier to the UPM-Kymmene plywood complex in eastern Finland, which houses three plywood mills, including an 8x8 plant. At the Pellos 1 mill late Jymet installed press unloaders, an automatic layup line, a press charger, a sanding line, a panel grading and stacking line and modifications to the existing overlay line. At Pellos 2, the delivery included a green veneer storage system, a trim saw line, a sanding line, and a panel grading, repair and stacking line, a packaging line and a panel edge machining (T&G) line. Visual grading in the sanding line. By the time UPM-Kymmene built the Pellos 3 8x8 plywood mill in 2001, Raute had acquired Jymet and so the resources of the two companies were combined to engineer, manufacture and install a complete panel handling department, including a trim and splitting saw for 8x8 panels, a horizontal panel putty repair line, a 8-ft sanding and grading line, a packaging line and conveying equipment that eliminated forklift traffic in the mill. Future focus Raute Jyväskylä has also developed synergies with Mecano, Raute's vision technol Highly efficient and accurate trim saw. ogy company. Together, the two divisions have developed camera-based technology that is used in Raute sanding and panel handling lines, an example of which was recently delivered to a birch mill in Finland, as well as an automatic panel sorting and polypatch line delivered to a mill in Spain. As to future development activities, management sees numerous opportunities, particularly in the area of automation, where vision technology will play a leading role. Panel overlaying, too, will continue to develop strongly. In both these fields, Raute remains technically very strong. Plywood stacking arrangement. 14 Raute strengthens its parquet expertise Raute focuses on wood products technology with special emphasis on plywood, LVL and parquet industries. Raute's parquet team was recently reinforced with a new parquet specialist, Mr. Matti Ukkonen, who took the responsibility of Raute's parquet technology. Matti Ukkonen has a long and versatile experience in the parquet business. BY MERJA HAKALA/MATTI UKKONEN Before joining Raute, Matti Ukkonen has been employed with production management in the parquet industry for about a decade with responsibilities covering production, material management functions and technology development. Matti Ukkonen is an engineer in wood technology. Market potential for multi-layer parquet Parquet is regarded as a growing sector in several market areas. The prevailing immense construction boom guarantees an excellent market outlook for multilayer parquet in many market areas, where wood is traditionally used as flooring material. As a product, multi-layer parquet is typically made with the surface of more expensive and the core and bottom of cheaper raw materials. The bottom layer is often a softwood veneer which renders sufficient counterforce for the surface layer to keep the parquet board straight. Common layer thicknesses are: surface 3.5 mm, core 8 - 9 mm and bottom veneer 2 mm. The finished parquet board dimensions are typically 14 x 200 x 2200 mm. PL VISIONS RAUTE CUSTOMER MAGAZINE ISSUE 5, APRIL 2005 Y 15 Global floor coverings market shares by type in 2003 Laminate 4,6 % Wood 4,2 % Linoleum 0,4 % Others 1,0 % Compared to solid-wood parquet, multi-layer parquet is environmentally friendly, low in production and installation costs, and easy and rapid to install, especially with glue-free tongue and groove joints. Flexible concepts Raute's technology is applicable for the manufacture of three-layer parquet in particular. Raute engineers and delivers the entire machinery for the manufacture of parquet. Raute manufactures the main machinery, i.e. core forming, gluing and pressing; the rest, e.g. machinery for surface slat manufacturing, machining lines, sanding machines and surface finishing lines, are supplied from other sources. Raute-manufactured machines of the total parquet plant machinery account for ca. one third. Presently Raute is developing a new-generation hot pressing technology along with the traditionally strong high-frequency technology. The delivered concepts meet the variable needs and requirements of the clients. In connection with turn-key plant deliveries, feasibility studies are made by Raute's subsidiary RWS-Engineering Oy. The studies analyze the profitability of the prospective project on basis of capacity calculations, market prospects for the end products, the availability of raw materials etc. The feasibility study thus offers a basis for the investment decision. Two decades of Raute parquet machinery deliveries The first parquet machinery delivery was in 1987 to the Upofloor Nastola parquet plant. At the moment, Upofloor, part of the FinnWoodFloors company and Karelia Group, has a total of five Raute high-frequency pressing lines at its Heinola and Nastola parquet plants in Finland. In Southeast Asia, Raute has deliv Raute's new generation hot press. Elastics 11,7 % Textiles 32,7 % Ceramics 45,5 % Figure 1. Source Parkett Magazin, 2004 ered parquet production lines to Sun Paratech Co.,Ltd., Thailand, in 1989 and 2004, and to Syrikat Malaysian Wood Industries Sdn.Bhd and B.K.B. Hevea Products Sdn.Bhd in Maylaysia in 1990 and 1994. Also, Raute has delivered parquet lines e.g. to San Shiah Enterprise Co., Ltd., Taiwan, in 1996 and to The Guangda Furniture Co., Ltd., China, in 1997. The first delivery to Sun Paratech in 1989 comprised several lines. The second Sun Paratech parquet plant next door, with Raute's pressing and core forming lines, has started production with new technology in the beginning of 2005. Raute press lines at Sun Paratech now amount to five. Raute has made several line deliveries to European parquet manufacturers and over thirty high-frequency presses to different parts of the world. Flooring market worldwide The dominating floor coverings globally are ceramics and textiles (Figure 1). Ceramics and stones are the most popular in Asia and tropical countries, whereas textiles have been number one in Europe and USA. However, the market share of textiles is gradually decreasing. The fastest growing floor coverings have been wood and laminate flooring, which had a global market shares of 4.2 % and 4.6 % respectively in 2003. Global demand for wood flooring The estimated global consumption of wood flooring was about 400 million m2 in 2003 with 180 million m² in Asia & Oceania, 101 million m2 in North America, 93 million m² in western Europe, 20 million m² in eastern Europe and the remaining 6 million m² in South America and Africa (Figure 4). The main part of wood floorings were solid wood coverings and parquets; the volume of multi-layer parquet was Parquet production by type in Western Europe 2003 Total production 65.8 million m³ Lamparquet 6% Solid 14 % Mosaic 2 % Multi-layer 78 % Figure 2. Source FEP, 2004 Parquet production by type in China 2003 Total production 96 million m³ Bamboo 4 % Multi-layer 23 % Solid 73 % Figure 3. Source USDA, 2004 16 about 110 million m² in 2003 or about 27 % of the total wood flooring. The consuming area of multi-layer parquet was Europe (West + East Europe) with its volume of about 60 million m² representing about 55 % of the total use of wood flooring in Europe. The share of multi-layer parquet was about 24 % in North America and about 11 % in Asia in 2003. The sales value of the total wood flooring market was estimated to 7.8 billion US$ in 2003. The estimated development of consumption of wood flooring The European Federation of Parquet industry (FEP) estimates that consumption of multi-layer parquet will increase all over the world in future As can be seen from Figure 4, the consumption in western Europe will only grow by a few percents per year while the growth will be more significant in other regions. It is obvious that the percentual growth of multi-layer parquet is even higher than the total growth of parquet flooring consumption. Major differences by region If for instance, production by product type in western Europe is compared to those in China, the differences are significant (Figures 2 and 3). The production of parquet also shows a different dividion in China compared to western Europe. However, growth in multi-layer parquet is apparent in China. Growth potential for wood flooring Worldwide, the share of wood flooring is only ca. 4.2 % of all flooring materials, which shows a good potential for growth. Made of renewable natural material, wood is an ecological alternative. Worldwide wood flooring consumption in 2003 NORTH AMERICA 101 million m² total 25 million m² multi-layer 7-10 % growth per year WESTERN EUROPE 93 million m² total 53 million m² multi-layer 1-3 % growth per year EASTERN EUROPE 20 million m² total 5 million m² multi-layer 5-10 % growth per year OTHERS South America/ Africa 6 million m² total 1 million m² multi-layer Figure 4. PL VISIONS RAUTE CUSTOMER MAGAZINE ISSUE 5, APRIL 2005 Y ASIA / OCEANIA 180 million m² total 20 million m² multi-layer 10-15 % growth per year 17 Securing the RETURN on your investment Raute Services has a demanding mission: It wants to maintain and develop further the productivity and capacity of the customer's production line during its entire life-cycle and simultaneously improve the recovery and optimize the product quality. Increased productivity requirements are nowadays familiar to all manufacturers in the wood products industry. How to get more out of the existing equipment? The answer is not an easy one, but Raute Services is committed to help its customers to reach their goals. Keeping the lines running costs money. Raute Services assist its customers to maximize the return on both the machinery investment and the money invested in maintenance. The result is the optimized life-cycle of the production line. Lots of potential for savings From the customer's point of view maintenance services are often regarded as a cost. We think they should rather be seen as an investment. Well managed and performed maintenance services improve production and reduce costs. The initial purchase price of a production line makes up only roughly one quarter of the total costs generated during its entire life-cycle. The remaining three quarters of the costs are made up by maintenance, spare parts and modernizations. Focusing on these costs offers a great potential for savings. Indirect equipment costs, such as downtime, low production and non-optimal quality, have a measurable effect on the production costs. Production time or raw material cannot be bought back once lost. A year of development During the past year Raute's maintenance service operations, i.e. spare parts, maintenance and modernization services were developed into a three-level concept. The foundation of the operations is laid by the customer needs. In Raute's customer industries, the pressure to improve efficiency and optimize quality has created a special demand for systematic, proactive maintenance and modernization services which utilize the latest technology. Our maintenance and modernization services have been formed into well-defined products that meet the customer demands. Maintenance service concept Based on the customers' needs, Raute's maintenance services offer always a suitable solution. Efficient production and optimal product quality are the key elements in creating a competitive advantage. To create a competitive advantage and generate the maximum return on your investment, you need to run your process at the optimum level without unexpected downtime. This is where Raute Services steps in. Estimation on direct life-cycle cost of equipment Modernizations 30 % Initial purchase 25 % BY MOLLI NYMAN 18 Spare parts 10 % Maintenance 35 % Basic Services - spare parts, repair services, basic overhauls, preventative maintenance services, inspection services etc. Added Value Services - technical line audits, personnel training programs, modernizations, line condition monitoring, shutdown planning and methods for implementation etc. Partnership Services - mill audits, maintenance budgeting and strategy planning, customized development plans, local maintenance services, investment planning and implementation, maintenance partnership contracts etc. mills ­ and their life-cycle ­ enable us to help our customers in planning their resources. It is a very quick and flexible tool in problem solving, as we can easily find similar situations from similar processes in the system. It helps our customers to anticipate repairs in time. All customer and process information is naturally handled confidentially and data security aspects are taken into account. Our customers have access to the database system. Disturbance alarms and job and spare part orders can be made over the internet, which saves time and costs and always gives the customer a printout of the alarm or order made. The database system also allows tailor-made reporting according to the various needs of our customers. Maintenance and consulting expertise Raute's expert services cover all production lines related to plywood, LVL, engineered wood flooring and panel overlaying technologies. With more than 60 years of experience in the business, Raute has in-depth knowledge and understanding of the production processes. We provide everything necessary to boost the performance of your operation in form of raw material analyses, market studies, startup services, training, field maintenance, efficiency improvements and upgrades. Our goal is to be our customers' partners in performance. The Basic Services secure the value of the investment made in the machinery. The Added Value Services help the customer to improve the process. The goal of our Partnership Services is shared responsibility in the continuous development of the customer's process. Modernizations add latest technology A major modernization is needed, when small improvements have only marginal effect on recovery, uptime, quality and capacity. Adding proven and tested solutions based on the latest technology to your existing line extends the life-cycle and lifts the overall efficiency to a level comparable to new equipment. Our experts work together with the customer to determine the scope and schedule best suited to the production needs. The modernization process can be carried out either all at once or step by step. Each project will be tailored to the customer's needs and requirements. By combining advanced automation, process optimization and information technology solutions into the existing production process, we raise your operation to a more profitable level. Predicting helps to optimize Raute's new maintenance database system was implemented to improve customer care and resource and work management. The new system is aimed to create a database of benchmark information on production lines, as all service actions are saved in the system. The data on single machines, production lines and complete Before making the investment, check with Raute's consulting services What is the optimum concept for utilization of available wood material resources? Who can help with project engineering and management? Where can I find new end-use applications? Raute provides you with the right answers to these questions and many more, whether you are planning a greenfield investment project or developing your existing operations. The wide range of consulting services includes: Planning services: Pre-feasibility and feasibility studies Development and technical plans Wood raw material testing Market studies Implementation services: Project engineering Project management Personnel training Installation supervision and start-up assistance Business and support services: Production assistance Maintenance assistance Product development 19 Marketing consultancy PL VISIONS RAUTE CUSTOMER MAGAZINE ISSUE 5, APRIL 2005 Y Arauco's Itata greenfield plywood mill starts up BY TIMO REINIKAINEN PHOTOS BY ARAUCO When Paneles Arauco's new Itata plywood was brought on line as scheduled at the end of 2004, the plywood production capacity of this major Chilean producer grew to 560,000 cubic meters per year (620 million sqft3/8" basis). The growth of Arauco's plywood business has been both rapid and impressive, especially considering that the company only started manufacturing plywood eight years ago and has since grown to be the largest plywood producer in South America. Raw material for Arauco's plywood operations is supplied from the company's own well-managed plantation forests in the form of both pruned and unpruned logs. Clear-face, sanded Radiata pine plywood, which makes up most of the production, is now well established and exported to international markets. The new Itata mill, located close by Concepcion in Nueva Aldea, produces the same type kind of high-quality softwood plywood as the company's two other plywood mills located 100 kilometres to the south. The new mill is built in the heart of Arauco's forest plantations on the northern side of Concepcion. with the newly-constructed Itata highway offering convenient access to the harbor for export shipping purposes. Itata is an integrated greenfield operation, with the first stages of the project, the Radiata pine plywood mill and a sawmill, already operational. A pulp mill is also under construction on the same site. Heat energy and electrical power for the three mills will be provided by a common power plant. Arauco has implemented the latest in plywood manufacturing technology at the new Itata mill to ensure that they achieve the maximum value from their radiata pine resource. Recovery of high-quality face veneers is maximized and Arauco is also paying close attention to the production of solid core plywood panels. Not only a pretty face Cross-grain veneers are produced as whole sheets on a 4 ft. peeling line and dried in a 6.2 meter (20 ft.) wide dryer. All veneer sheets used in the layup are either whole sheets or composed from randoms to avoid core gaps and overlaps. The company's clever marketing slogan - "more than just a pretty face" - well describes the quality of the plywood they are producing. According to Mr. Franco Bozzalla, Managing Director of Paneles Arauco S.A., start-up of the Itata mill is going smoothly and according to plan, a situation he attributes, among others, to the experience brought to the project by both the Raute and Arauco staff, many of whom had participated in the previous Arauco plywood mill projects. This experience included both the technical aspects of the installation and the special requirements of the Radiata pine resource. Experienced people and proven technologies Raute was chosen by Paneles Arauco to be the principal supplier to the new Itata project. According to Arauco management, the decision to choose Raute was based on prior successful projects and the technology being offered. The new mill is highly automated, including automatic spray layup lines, veneer camera grading, advanced veneer moisture management and a mill-wide management information system. In order to shorten the learning curve at the new Itata mill, Arauco had installed a similar type of automatic layup line and camera grading system at one of their existing plywood mills in 2004. This offered an excellent opportunity for Arauco management and operators to learn the operation of the system. The new spray layup project was carried out in close operation with Raute and Arauco's local glue suppliers. The benefits offered by the new layup line were immediate as the mill realized savings in glue consumption, which was especially important since the cost of glue had risen. The installation of Raute-Mecano moisture meters and a re-feeder for feeding moisture-stabilized veneers back into the grading line has enabled veneers with higher final moisture content to be used and has also reduced the need for redrying, both of which have helped to improve dry veneer quality. Raute's delivery included 8 ft and 4 ft peeling lines, a log cutting line, three drying and grading lines, two composers for producing core from random, two automatic layup lines, panel repair and packaging lines and by-product processing lines. Capacity of the mill is presently 210,000 m³/year with further expansion planned. 20 Hall 027 Stand J38 Raute's Ligna+ 2005 participation: Concentrating on things that matter most Welcome to Raute's stand and to Ligna+ 2005. It is once again our privilege to offer you our solutions on how to improve your production process based on our latest technologies. Our solutions are not theory, they are practical applications currently operating in all corners of the world. They are not limited to technologies only available to the most sophisticated producer, but rather cover a very broad spectrum. In every case, the solution we offer is aimed at satisfying your need to gain value from your investment and to continue to gain benefit throughout the entire life-cycle of that investment. For these reasons, our stand at Ligna+ is manned by experienced Raute professionals, each of whom has expertise in a variety of disciplines. For those visitors whose business is veneer and plywood, we have staff ready to talk about peeling, drying, pressing and panel handling. If your business is value-added manufacturing, then you'll find Raute representatives familiar with all aspects of panel overlaying and engineered wood flooring production. For those whose focus is the production of engineered lumber, we offer expertise in producing Laminated Veneer Lumber. Or, if you simply want to explore options in the wood products business generally, why not discuss the opportunities over a cup of coffee with one of our consulting engineers. As stated previously, Raute's focus at Ligna+ 2005 is on maximizing performance. To this end we are holding a half-day seminar on Tuesday, 3 May to which you are invited. The seminar will offer presentations with particular emphasis on recovery, productivity, quality and capacity, the most essential aspects in a profitable production process and how our service initiatives support our claim that Raute Is Your Partner In Performance. While visiting our stand, try out our lathe operator's booth that puts you behind the controls of our latest contribution to peeling technology - Smart Peel. Kiosks are available throughout the stand to inform you of the wide range of products available from Raute. Feel free to browse at your leisure and ask questions. We look forward to seeing you at Ligna+, you are most welcome! 21 PL VISIONS RAUTE CUSTOMER MAGAZINE ISSUE 5, APRIL 2005 Y Appointments at Raute Corporation Mr. Juha Rautiainen has been appointed Technology Manager, Dry Veneer Processes at Nastola. Mr. Rautiainen is responsible for the scarf-jointing and composing processes. With a strong background and experience in the plywood industry, he strengthens Raute's plywood competence and helps us to serve our customers even better. We are pleased to welcome Mr. Jacky Lee, our new Chief Representative of Raute Wood Beijing office. Raute is focused on developing its Chinese operations and strengthening its position on the China market. Mr. Lee has extensive knowledge in woodworking technology and over 10 years of experience especially from the Chinese EWF industry. He joins Raute from Casco Group, a worldwide well-known adhesive producer. Ms. Molli Nyman has started as the new Marketing Manager at Nastola. Her area of responsibility includes both marketing and financial communication. Prior to joining Raute, Ms. Nyman held the position of Communications Specialist at Metsä Tissue Corporation and has diverse experience in marketing and communications. V PLY ISIONS Published by RAUTE CORPORATION, P.O. Box 69, 15551 Nastola Finland. Tel: +358 3 82 911, Telefax +358 3 829 3511 Editor-In-Chief: Molli Nyman. Editorial Group: Matti Aho, Veli-Matti Lepistö, Rick Massey, Tapani Kiiski, Ulla Hillu. Layout and art work: Non-Stop Studiot Oy, Paul Hitchman. E-mail: firstname.lastname@raute.com /www.raute.com Cover: Veli-Matti Lepistö Photos by Raute if not mentioned otherwise. Copyright RAUTE CORPORATION, All Rights Reserved. Reproduction permitted with permission from Raute Corporation. ISSN 1459-3165 PL VISIONS RAUTE CUSTOMER MAGAZINE ISSUE 5, APRIL 2005 Y 23 w w w. r a u t e . c o m