Coillte Panel Products

Coillte Panel Products is an innovative and increasingly significant player in the European panel products sector. Its brands, Medite MDF (medium density fibreboard) and SmartPly OSB (oriented strand board) benefit greatly from being part of the integrated Coillte Group as fibre security is becoming an increasingly important competitive advantage for the business.

Medite and SmartPly products are manufactured in Clonmel and Waterford and are Forest Stewardship Council (FSC) certified, differentiating them from many competitor and substitute products. These sustainable timber products play a key role in building for a carbon neutral future. An integral part of the Coillte Panel Products approach is its commitment to innovation, in the form of both new product development and process improvement. The business exports almost 90% of production and has sales and marketing teams in the UK, Ireland and the Netherlands.

Coillte Panel Products’ sales volumes recovered strongly during 2010 and are now back to 2007 levels. The UK market has proved to be particularly resilient for both SmartPly and Medite, primarily due to a combination of excellent distribution channels, strong brands and plywood substitution successes.

Overall sales volumes are up 8.4% on 2009. Whilst increasing volume sales, we also secured significant price increases for both SmartPly and Medite.

During 2010, substantial progress was made in advancing key strategic and operational elements of our business plan.

A cross Divisional project focused on optimising the return from our small diameter fibre concluded that the panels business provides a strong return on this material when compared on a like-for-like basis with alternative bio-energy options.

We completed development of the proposed value added business model for SmartPly, which supports the case for renewal of the SmartPly facility.

We launched a number of new products and product range extensions into the market during the year, namely, a Medite Thick MDF (32mm - 45mm range) and Medite Ultralite (lightweight 500kg density MDF), and for specific industrial clients provided Medite Eco Flooring (zero added formaldehyde flooring substrate) and Medite Eco FR (zero added formaldehyde flame retardant product).

Products from the Coillte Panel Products  range have been used in the Aviva Stadium at Lansdowne Road in Dublin, the new Marks & Spencer ‘anchor’ store at the retail gateway to the London Olympic Park, the new entertainment development at Bluewater — the leisure and shopping destination in Kent, and the new DeLaMar Theatre in Amsterdam which was opened at the end of 2010 by Queen Beatrix of the Netherlands.

We are also focused on anticipating and meeting evolving environmental standards required for both public and private projects and all Medite is manufactured to the CARB 2 (California Air Resources Board) emission standard which is being demanded by an ever growing list of multinational end users.

Outlook

We expect 2011 to be another challenging year as the balance between supply and demand in our core markets is fragile and we will need to work hard to maintain the momentum generated in 2010.

However, we are very positive about the medium term prospects for the business. Apart from the general recovery in global GDP growth, which is slowly beginning to take hold, a number of important trends are emerging which will drive demand for panel products in the future. These include EU Directives on energy performance of buildings and on renewable energy along with the growth of sustainable or ‘green’ procurement policies being implemented by Governments and large corporates throughout Europe.

During 2011, we will continue to focus on reducing our costs, delivering on our innovation pipeline and satisfying our customers. The growth strategy for Coillte Panel Products is to build on the Division’s competitive strengths which are UK and Ireland market share, fibre security and the strength of our brands, whilst delivering the SmartPly renewal based on a value added business model.