JR Dickens - FPS 1999

Preparing for the New Millennium:A Panel Products Perspective

by

Robert Dickens, Ph.D.Manager, Process Engineering

Temple-Inland Forest Products Corp.Panel Products Division

Preparing for the New Millennium:A Panel Products Perspective

Presented to

Forest Products SocietyMid-South Section Meeting

Alexandria, LAMarch 18-19, 1999

March 19, 1999 Forest Products Society Mid South Section Meeting

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Introduction -- How We’re Preparing for the Future

• Expanding and upgrading older mills– building new, high-tech mills to increase capacity and expand

product offerings

• Expanding technical support capabilities– investing in people and equipment

• Taking a proactive approach to environmental compliance– spending megabucks on pollution control equipment


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Introduction -- How We’re Preparing for the Future

• Implementing a competency-based human resource management system– focus on skills and skill development

• Maintaining awareness of competitive factors and new process technologies– new & improved products & processes are breaking onto the scene


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How We’ve Addressed Strategic Expansion of Operations:

• During last several years– emphasis on upgrade and expansion of core product offerings – expansion into product lines of the future

• Our growth profile– from 1987 to 1995, maintained 3 PB mills, 2 gypsum mills, 1

fiberboard mill, & 1 laminating mill– from 1996 to 1999, added 1 PB mill, 2 gypsum mills, 3 MDF

mills, & 1 cement fiberboard mill


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How We’ve Addressed Strategic Expansion of Operations:

• During the next few years– emphasis on improved manufacturing efficiencies of new and

existing mills– development of more specialty product offerings


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Particleboard

• In 1997, completed $35MM modernization & expansion of three existing particleboard mills – Texas, Alabama, & Georgia

• each more than 20 years old• emphasis on achieving greater consistency and uniformity of product• new forming line makes it possible to run board as thin as 1/4”

• In 1996, started up state-of-the-art, $65MM particleboard mill in Hope, Arkansas – emphasis on high-volume flexible manufacturing (cut-to-size)– widths to 5’ and lengths to 12’


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Particleboard

• Have developed successful strategic partnership with Borden Chemical– two mills -- Texas & Arkansas– emphasis on process optimization and reduced cost

• Currently developing specialty products: – thin particleboard flooring– water-resistant particleboard– fire-resistant particleboard


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Hope (AR) Particleboard Operation


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Diboll (TX) Particleboard Operation


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Monroeville (AL) Particleboard Operation


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Thomson (GA) Particleboard Operation


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Medium-Density Fiberboard

• In early 1998, started up state-of-the-art, $95MM mill in El Dorado, Arkansas – 50% joint venture with Deltic Timber Corp.– emphasis on high volume flexible manufacturing (cut-to-size)– widths to 5’ and lengths to 12’


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Medium-Density Fiberboard

• In late 1998, completed acquisition of Eastern high-tech MDF market– purchase of Clarion (Pennsylvania) & Pembroke (Ontario) plants

for $106MM U.S. ($160MM Canadian)

• Currently developing specialty products which include– thin MDF flooring– water-resistant MDF– exterior-grade MDF


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El Dorado (AR) MDF Operation

Photo adapted from Panel World, March 1999, p. 10


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Gypsum Wallboard

• In 1996, spent $18MM to enter strategic partnership with Caraustar Industries – purchased a small wallboard plant in central Texas– have spent about $5MM to upgrade and expand mill

• In 1996, completed modifications of Arkansas wallboard plant to run 54”-wide board

• In 1998, completed conversion of Arkansas wallboard plant to run 100% FGD (synthetic gypsum)


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Gypsum Wallboard

• In 1999, partnering with Caraustar to start up high-speed wallboard line in Cumberland, TN – 500 fpm– will run 100% FGD supplied by TVA

• Strategic partnerships with Caraustar help ensure availability, quality, and consistency of wallboard paper supply

• Caraustar has been working in partnership with Temple to develop a low-basis-weight wallboard paper


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Cumberland (TN) Wallboard Operation


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Fletcher (OK) Wallboard Operation


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West Memphis (AR) Wallboard Operation


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McQueeney (TX) Wallboard Operation


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Wet-Process Fiberboard

• Existing mill is now 40+ years old• Produces softboard sheathing, hardboard siding, and

hardboard trim• Currently exploring options for keeping plant profitable

well into future– new products, e.g., fire-resistant sheathing– process modifications


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Diboll (TX) Fiber Products Operation


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Cement Fiberboard

• In 1998, started up state-of-the-art, $65MM cement fiberboard mill – strategic partnership with Kafus Environmental– expected to be first of many CFB plants for Temple

• Temple is positioning itself to take advantage of the anticipated growth in the cementitious siding market


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Waxahachie (TX) Cement Fiberboard Operation


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Oriented Strand Board

• In 1999, completed divestiture of 5% share of Eagle Forest Products OSB mill in New Brunswick, Canada

• Some latent interest in strategically expanding our product line to include structural or specialty OSB, but no plans on the drawing board


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Applied Research Center

• In 1996, significantly expanded product development and support capabilities– new office space– computer lab– wet lab– dry lab

• Expansion included purchase of new equipment– process modeling and simulation software– fire testing, weathering, ion chromatography, and differential

scanning calorimetry


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Applied Research Center

• From 1996-1998, have expanded technical capabilities– wood science– wood chemistry– engineering– information technology

• Leading intranet development efforts– improved communications between operations– timely operational data available to division managers


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How We’ve Addressed Environmental Issues:

• Taking a proactive approach to environmental issues• During last four years, spent more than $40 million on

pollution control equipment– $9 million at Clarion MDF– $6.5 million at Diboll Fiberboard– $6 million at Hope Particleboard*– $6 million at El Dorado MDF*– $4 million at Diboll Particleboard– $3.5 million at Thomson Particleboard– $2.5 million at Monroeville Particleboard– $2 million at Pembroke MDF

*included in the cost of plant construction


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Primary Environmental Concerns

• Particleboard & MDF– VOCs and particulates are the chief environmental concerns– use various control technology, e.g., RTO, ESP, WESP, wet

scrubber, and baghouse– El Dorado MDF uses a Callidus Gasification System


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• Wet-process fiberboard and cement fiberboard – rely heavily on water purification & recycling systems

• reduce usage• reduce outfall by reuse of water• maintain purity of process water

– wet-process fiberboard must also address • VOC & methanol emissions• particulate emissions


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• Wallboard operations – primarily concerned with containing fugitive dust – also focus on reducing landfill by recycling waste board & waste

paper– use of waste water and storm water in process

• Issues common to all plants– site appearance, dust, drainage control, erosion control– storage for chemicals, fuel, oil, etc.


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Regenerative Thermal Oxidizers

• RTOs operate at high temperatures (1500-1600F) to destroy VOCs and HAPs

• Temple has seven (7) RTO installations– Clarion (multi-source)*– Hope Particleboard (predryer & press)– Diboll Particleboard (press)– Diboll Fiberboard (multi-source)– Alabama Particleboard (press)– Georgia Particleboard (dryer)

*still under construction


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Clarion (PA) MDF -- RTO Installation


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How We’ve Addressed Human Resource Issues:

• In 1996, began implementation of competency-based pay program– ties skills to compensation– utilizes external salary benchmarks– provides incentive pay through an annual bonus

• Company is placing a greater emphasis on employee development to ensure that an adequate pool of trained employees are prepared to step into management positions– positions vacated due to retirement– positions vacated due to promotions– positions created by construction of new plants


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Potential Competitive Concerns In Our Industry:

• Supply & demand– continued downward pressure on prices– next few years will be “survival of the fittest”

• Perceived value of products– value is about more than “cost”– does the product meet a specific need the customer has?

• Scope of end uses can be expected to diversify• Specialty products will account for greater market share• Alternative fiber products (wheat straw, kenaf, etc.) have

potential to challenge many established wood products


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Potential Competitive Concerns In Our Industry:

• Marketplace becoming more global– more competing products, both domestic and foreign– have to rededicate ourselves to meeting customers’ changing needs

• Emphasis shifting from volume to quality– partly due to overcapacity– partly due to meeting stricter customer requirements

• Result is that companies are going to have to figure out how to remain profitable at scaled-back production levels– may be several years before plants can produce at maximum

volume


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Enhancing Process Technologies:

• During the last 10 years, Temple has invested millions of dollars to standardize on state-of-the-art PLC and computerized data acquisition & control systems

• Emerging technologies that we intend to pursue– process modeling for improved process feedback and control– simulation modeling for improved process efficiency and

throughput


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Concluding Remarks

• Temple is taking steps to meet the challenges of the new millennium– improving existing products & processes– expanding into products of the future– developing key strategic partnerships– implementing advanced computer data acquisition and process

control technologies– expanding our product & process development capabilities– developing internet communication capabilities– aggressively addressing environmental issues– ensuring that our HR processes support continued growth

JR Dickens - FPS 1999

Business

arkansas wallboard

potential

process fiberboard

wallboard

particleboard

el dorado

2 gypsum mills

proactive