Norbord’s UK mills have outperformed the group’s North American operations in the first quarter and contributed the majority of the company’s profits.
Norbord president and CEO Barrie Shineton said the company’s European business, which comprises three panel mills in the UK and one in Belgium, had contributed three-quarters of total profits despite them only representing one-quarter of Norbord’s total production capacity.
Mr Shineton said the European division, which includes the Inverness OSB plant, Cowie chipboard and MDF mill and South Molton chipboard and furniture production plant, as well as an OSB operation in Genk, Belgium, recorded profits of US$11m – almost triple its profit contribution to the group compared to a year ago.
“European markets and prices were stronger than expected and our panel shipments increased by almost 30% over last year,” said Mr Shineton.
“Our mills ran at full capacity with three of our four manufacturing lines setting new production records this quarter.
“Our mostly UK-based mills continue to benefit from a weaker pound. This limited competing panel imports to the UK and allows us to ramp up exports to the continent. The geographic diversification I’ve often spoken of is clearly paying off.”
Norbord said panel markets continued to be strong, despite the adverse weather early in the year. All panel prices increased significantly compared to a year ago – OSB, chipboard and MDF prices rose 18%, 7% and 11% respectively, – with only OSB seeing prices soften (5%) over the previous quarter.
UK exports of MDF to Europe rose 61% year-on-year.
Norbord said it expects European panel markets to remain robust and for its production to run at full capacity in the second quarter, subject to market conditions and with the exception of the Cowie chipboard plant where improvements are set to be completed by the middle of the year.
