Norbord’s UK panel manufacturing operations have turned out a stellar performance in the first half of 2011, contributing heavily to £14.7m profits for the group’s European operations.
The Inverness OSB plant, Cowie chipboard and MDF mill and South Molton chipboard and furniture production plant, together with an OSB operation in Belgium, recorded second quarter profits of £7.9m, comfortably outperforming Norbord’s North American operations.
Norbord CEO Barrie Shineton said the pound’s weakness continued to benefit UK mills by limiting imports and expanding exports to the Continent.
“This opportunity has been particularly timely and has effectively offset a slowdown in non-construction panel sales in the UK,” he said.
Year-to-date OSB, chipboard and MDF prices increased by an average of 15%, while the mills produced at approximately 105% of estimated capacity and 115% when excluding the downtime related to Cowie improvements.
However, the South Molton mill’s furniture business division experienced lower volumes.
“Discretionary consumer spending in the UK has dropped sharply and is now affecting our do-it-yourself kitchen sales,” added Mr Shineton.
“In response, we are moving quickly to reconfigure our South Molton manufacturing site to reduce overhead costs and balance production in light of what I believe is a structural change in demand for this product.”
The recent improvements at Cowie enable Norbord to make improved quality chipboard suitable for use in the manufacture of decorative panel products.
