7. PLANNED PANEL CAPACITY EXPANSIONS

7.1. Plywood & Veneer
7.2. Particleboard
7.3. Medium Density Fibreboard (MDF)
7.4. OSB and LVL
7.5. Other Fibreboard

7.1. Plywood & Veneer

The plywood industries of the Asia Pacific are not generally in expansion mode at present, as the supply of large peeler logs is steadily diminishing and many existing plywood applications are coming under intense competitive pressure from thin MDF and increasingly from OSB.

Nevertheless, there are a few new mills being implemented and new lines added to existing mills, as is seen in the list below:

Country	Company	Location	Start	Capacity Incr.
China	Hainan Plywood	Hainan	1995	108,000 m³
	Nantong Plywood	Jiangsu	1997	120,000 m³
	Junxin Forest	Jilin	1998	30,000 m³
Japan	Seihoku Plywood	Ishinomaki	1997	2,400 m³
Indonesia	PT Inne Dongwha	Indonesia	1995	108,000 m³
	PT Sumalindo	Irian Jaya	1998	120,000 m³
Malaysia	Rimex Industries	Sumatra	1995	120,000 m³
	Rindaya	Sibu	1995	110,000 m³
	CNTC	Tanjung Manis	1997	78,000 m³
P. New Guinea	Lombda Pty	P.N.G.	1997	60,000 m³
TOTAL CAPACITY INCREASE				856,400 m³

7.2. Particleboard

The growth in planned particleboard capacity in the Asia Pacific region is shown clearly by country and by plant from 1994 to 1998, in Tables 62, 63, 64 and 65 attached to this report.

In summary, the total regional capacity is expanding as follows:

Year	Total Capacity	Growth	%/Year
1994	10,468,000 m³
1995	11,034,000 m³	566,000 m³	5.4%
1996	11,499,000 m³	465,000 m³	4.2%
1997	12,934,000 m³	1,435,000 m³	12.5%
1998	13,754,000 m³	820,000 m³	6.3%
1994-1998		3,286,000 m³	7.5%

It is interesting to compare the above capacity figures with the regional growth in consumption, from an actual consumption of 9,879,000 m³ in 1995 to a forecast of demand of 15 million m³ for the year 2000. The 1995 figures showed a net deficit of 755,000 m³, or 7.7% of demand. The demand forecast for 2000 shows the need for an additional capacity of over 1.3 million m³ between 1998 and 2000, which requires continued growth at the same levels as 1994 to 1998.

The major capacity increases by country between 1994 and 1998 are as follows:

Country	Capacity Increase
Thailand	1,030,000 m³
Malaysia	850,000 m³
China	360,000 m³
Japan	240,000 m³
Indonesia	240,000 m³
Philippines	207,000 m³
India	140,000 m³
Republic of Korea	135,000 m³
Pakistan	124,000 m³

With regional particleboard demand forecast to increase to 21.2 million m³ by the year 2005 and 29.6 million m³ by the year 2010, the particleboard industry should be planning for an average increase of 1.3 million m³ production capacity per year till the year 2010, which represents 13 plants per year at an average plant capacity of 100,000 m³ per year.

7.3. Medium Density Fibreboard (MDF)

The detailed analysis of increasing MDF capacity in the Asia Pacific region is given in tables 59, 60 and 61, also on a country by country and plant by plant basis.

The total production capacity volume growth pattern is best illustrated in the table below:

Year	Total Capacity	Growth	%/Year
1994	2,974,000 m³
1995	4,091,000 m³	1,117,000 m³	37.5%
1996	5,316,000 m³	1,225,000 m³	30.0%
1997	6,826,000 m³	1,510,000 m³	28.4%
1998	7,561,000 m³	735,000 m³	10.8%
1994-1998		4,587,000 m³	26.0%

Comparing the above MDF production capacity figures with the consumption and demand volumes given in Table 54, it is apparent that with a 1995 demand level of 3,692,000 m³, the impending over-capacity situation was already apparent, and with 1998 capacity levels some 12.5% over the demand forecast for the year 2000, there were going to be problems ahead in the MDF sector.

The major capacity increase by country between 1994 and 1998 were as follows:

Country	Capacity Increase
China	1,021,000 m³
Indonesia	750,000 m³
Malaysia	653,000 m³
Australia	625,000 m³
Republic of Korea	419,000 m³
Thailand	381,000 m³
New Zealand	295,000 m³
Japan	283,000 m³
India	112,000 m³

With regional demand for MDF forecast to increase to 9.7 million m³ by the year 2005, and to 14 million m³ by 2010, an additional production capacity equivalent to 6 million m³ per year will be required by 2010, at an average annual increase of 500,000 m³ per year.

7.4. OSB and LVL

The future growth prospects for OSB and LVL are still very debatable. There are reports of two OSB projects in China, one at Ganzhou with a capacity of 17,000 m³, and one at Yong'an with a capacity of 70,000 m³, but neither of these has been confirmed by the Chinese Academy of Forestry. There is also a report of a planned OSB project in Thailand with a capacity of 105,000 m³, but again there is no official confirmation from Government sources.

7.5. Other Fibreboard

Two small fibreboard projects were announced in 1996 but they have not been officially confirmed. One was a 32,000 m³ plant in China and the other was a 24,000 m³ plant in Thailand.