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Norbord to invest $135 million in mill expansion
The Canadian company Norbord recently announced that its Board of Directors has approved a $135 million (£95 million) investment to modernize and expand its OSB mill in Inverness, Scotland, nearly doubling its capacity to 720 million square feet (MMsf) (3/8-inch basis) (640,000 cubic metres). The project will involve the installation of modern continuous press technology on a new production line to replace two smaller, dated multi-opening presses. It will build upon the mill’s access to the most competitive wood fibre basket in western Europe and the existing infrastructure at the Inverness site. Investment returns will be driven by lower manufacturing costs and the flexibility to produce a broader selection of panel products to serve the European marketplace. Demand for OSB in Norbord’s key western European markets has been growing at a cumulative average rate of 9% over the past four years, driven by accelerating substitution away from higher cost, imported plywood. The Company’s European mills are running at full capacity, and with direct road, rail and port access at Inverness, the 325 MMsf of incremental capacity from the project will position Norbord to meet this growing demand and continue to efficiently serve its customers across the UK and on the European continent. The government of Scotland is investing up to €15 million (£12 million) in the project through a development grant from the Highlands & Islands Enterprise. Norbord expects the new line to come online in the second half of 2017, with no disruption to existing production capacity in the interim.
Added Mr. Wijnbergen: “Our European business is a source of diversification that is unique to Norbord among OSB producers, and brings stability to our earnings through the business cycle. This is an important strategic investment, focused on the fastest-growing market for OSB, and will make our already strong European business a more meaningful part of our financial results.”