Written by Akhlaqur Rahman Sachee, Team MBR

The prevailing concept of appealing aesthetics is quite different from what it was just a decade or two ago. These days, simplicity of appearance, whether that is a gadget, home appliance, or piece of furniture, makes it aesthetically appealing to the user. This massive shift in taste and preference clearly indicates why the consumption of particle boards in the country is only growing at a phenomenal rate. In addition to the change in taste and preference, the growing concern about the environment and price sensitivity of modern customers are playing crucial roles here. These factors have led to the market size growing at a rate of around 15% to 18% per annum since 2017, according to the Bangladesh Brand Forum, which makes it one of the fastestgrowing industries in Bangladesh.

Global Outlook of the Particle Board Industry

The history of particle boards can be traced back to 1935, when Farley and Loetscher Manufacturing Co. first started production of particle boards in Iowa, United States. Now many of the developed and developing countries are engaged in the production and export of particle boards, resulting in a highly fragmented global market. According to Emergen Research, the estimated value of the global particle board market was USD 22 billion in 2022, and the global market is expected to grow at a compound annual growth rate (CAGR) of 3.7% during the period 2023–2032. If the market keeps growing at the estimated CAGR, the value of the global particle board market will stand at USD 31.91 billion by the end of 2032. The availability of raw materials, the rapid growth of the furniture industry, and the increasing number of construction projects will fuel the expected growth. In 2022, Asia Pacific alone generated 42.3% of the global market revenue. Rapid urbanisation and industrialisation in countries like China, India, Japan, and South Korea drove the growth of the particle board industry in this region. In terms of exports of particle boards, Canada, Austria, Germany, Romania, and Russia have positioned themselves in the chart of top countries. These countries exported USD 4.07 billion, USD 1.05 billion, USD 931 million, USD 676 million, and USD 676 million worth of particle boards to the global markets in 2021, respectively. The inter-country trade of particle boards was valued at USD 14.3 billion in that year.

Particle Board Industry in Bangladesh

Star Particle Board Mills Limited of Partex Star Group established the first ever particle board manufacturing factory in the country in 1962. After 2011, the demand for particle boards kept rising sharply, and the number of industry participants has only kept increasing since then. The lower cost of particle board furniture, enhanced durability due to the integration of modern manufacturing practices, and eco-friendly aspects of particle boards have helped the industry drive big numbers.

Major Industry Participants

Currently, there are multiple large conglomerates that are engaged in the manufacturing of particle boards, such as Akij Bashir Group (Akij Board), T.K. Group (Super Board), Amber Group (Amber Boards), Akhtar Group (Akhtar Board), BRB Group (MRS Industries), and so on. According to a report published by The Business Standard, an approximate BDT 10,000 crore investment has been made in this sector. Among the industry participants, Akij Board holds the largest share (30%) of the BDT 5,000 crore particle board market, followed by Super Board (25%) and Partex (20%).

Product Diversification

Particle boards mostly come in sizes of 8 feet by 4 feet. However, thickness and density vary widely. Also, there are multiple variants of board, such as plain particle board, veneered board, plywood board, melamine board, MDF board, and so on. These variants are different from each other in terms of the layers on the board surface and the technologies applied to form the cores.

Supply Chain

Jute sticks and tree branches of mahogany, raintree, akashmoni, and chambal trees are mostly used for the production of wood chips, which go into the cores of the particle boards. Jute sticks and tree branches are sourced locally. However, the adhesives and other chemicals that are used in the production process are mostly imported. The current annual demand for particle boards stands at 80 crore square feet, and the total production capacity of the country’s particle board industry is capable of meeting 80% of the local demand. Around 55% of the particle boards are used in the furniture sector, and the rest, 45%, are for office decor, according to a report by The Business Standard. The abundance of raw materials required to produce wood chips and cheap labour have made the industry self-reliant.

Creation of Employment Opportunities

Alongside the large conglomerates, there are more than 300 small and medium enterprises (SMEs) that are operating their businesses in the particle board industry. SMEs play a crucial role in creating jobs in a country. As the production of particle boards is labour-intensive, the industry has created more than 25,000 employment opportunities in Bangladesh.

Manufacturing Process of Particle Boards

The industrial production of particle boards requires heavy machinery and a huge labour force. It is a multi-step process, as follows. Manufacturing Process of Particle Boards

1. Wood Chipping: This is the first stage of the manufacturing process of particle boards. Jute sticks and tree branches go into the chipping machine, and wood chips are produced at this stage. Wood chips form the core of the particle boards.

2. Drying: Wood chips are dried in the dryer machine at a very high temperature so that the moisture level of the chips comes down.

3. Screening: Wood chips are then screened, and those that are not perfect enough to go into the next stage of the production process are filtered out.

4. Glueing: Screened wood chips are soaked in glue at this stage so that soaked wood chips in glue can be used for forming mats of wood chips, which are the core of the particle board.

5. Mat Forming: Mats are formed with wood chips soaked in glue, and this is the stage where the thickness and density of the particle boards are determined.

6. Cutting: The freshly formed mats are cut into smaller mats of desired length and width at this stage. After this stage, they become ready for hot pressing.

7. Hot Pressing: The freshly formed mats of the desired length and width are pressed under very high temperature and pressure. The time required for hot pressing depends on the thickness and density of the mats.

8. Edge Trimming: After hot pressing, the edges of the boards are trimmed, and the boards are sent for sanding.

9. Sanding: This is the stage of the production process responsible for smooth finishing and calibration of the particle boards.

10. Laminating: Decorative laminating papers, veneer, etc. are glued to the surface of the particle boards to make them water-resistant, durable, and aesthetically appealing.

Bangladesh, and the production process is quite different from the production process of particle boards. In the case of plywood boards, logs are cut into thin sheets (plies) first. After drying the thin sheets, they are glued to each other to form the cores. Based on the production process, bending strength, elasticity, tensile strength, screw withdrawal strength, and multiple other factors depend.

Particle Boards vs. Solid Wood

There are multiple benefits that particle boards offer over solid wood while being used for furniture and office decor. Some of the benefits are as follows.

Though the raw materials to produce wood chips are sourced locally, the adhesives and pasting materials are mostly imported from China, Myanmar, and Malaysia. Also, most of the machines required for the production of particle boards are imported. Due to the ongoing dollar crisis, the costs of imported materials have risen a lot, and the importers are facing difficulties importing the adhesives and pasting materials. Also, a good amount of MDF boards are still being imported, mostly from Malaysia. However, particle boards produced in Bangladesh are being exported too, though in small quantities. India, Singapore, and the United Arab Emirates are some of the growing particle board export destinations for the country. Rising energy costs have also impacted the bottom lines of manufacturers. However, this industry aims to offer an affordable alternative to solid wood to customers while ensuring the environment remains protected. Also, there is an abundance of raw materials and cheap labour in the country, which are highly required for the industry to flourish. The government should come forward with policy support mechanisms like it did for the RMG sector to help this self-reliant industry contribute to our export basket and keep protecting the environment while offering functionality in an efficient way.

The author is working as a credit analyst at IDLC Finance PLC. and can be reached at akhlaqur@idlc.com