Evergreen looks to oil palm for new source of raw material


MALAYSIAN fibreboard companies have to be innovative and creative to maintain their leading edge in the international market. One of Asia's top five fibreboard companies, Evergreen Fibreboard Bhd is strong in research and development (R&D) to keep Malaysia ahead of its rivals and to remain among the top three exporters of fibreboards globally. Executive director Kuo Jen Chiu speaks with StarBiz journalist ZAZALI MUSA. 

STARBIZ: What is Evergreen's focus in terms of R&D? 

Kuo Jen Chiu: Our team is constantly doing research works on new wood species which could be turned into raw materials for fibreboard making. 

It is important for the company or even the industry to be able to use other than the existing wood species such as rubberwood and acacia

This will not only lessen our dependency on any particular wood species but also help the company to widen its range of fibreboards.


There are many tree species in the Malaysian jungles which could be cultivated in farms dedicated to supplying wood for the industry. 

What needs to be done is to turn the jungle species into fast-growing trees - maybe less than five years - for the industry usage rather than waiting for 50 years. 

Most plantation species can be used in fibreboard making and we need strong R&D activities by the industry to develop such species. 

Evergreen is currently working with the Malaysian Palm Oil Board to use oil palm as the main raw material for fibreboards. 

It would be nice if the industry could use oil palm, as the country has an abundant supply of the trees. 


Until today, there is no technology that can process oil palm, as the species is very special, with less fibre, and it is quite challenging to extract the fibre. 

Special equipment is needed to do that and right now, there are many ongoing R&D activities on oil palm. Hopefully, there will be a breakthrough in three to five years. 

A few mills in Malaysia are already producing fibreboard using 75% and 25% of rubberwood and oil palm respectively; the challenge now is to use 100% oil palm. 

The company does not rule out the possibility of exporting oil palm-based fibreboards in the future and the challenge is to find the market for such product. 


StarBiz: What is the prospect for the fibreboard-making industry? 

Kuo: The industry's prospect is expected to be bright in years to come, considering the upward trend of the price of fibreboard and the increase in demand globally. 

The price of fibreboard has been going up almost 20% in the past three months and the uptrend is likely to continue in 2007. 

The increase is attributed to the shortage of natural woods for furniture industry, which has to look at substitutes, and fibreboard is the answer. 

It is also cheaper for furniture makers to use fibreboard in their products instead of using woods obtained from trees growing in the jungles. 

Pressure from non-governmental organisations in developed countries to boycott tropical hardwood furniture also helps to push up demand for fibreboards. 

The industry must work together with research bodies in Malaysia and overseas to come out with new wood species as new sources of raw materials. 

I believe that in years to come, there will be a technology breakthrough in the industry and users worldwide can expect new fibreboard products from Malaysia


StarBiz: What are the challenges in the industry? 

Kuo: Malaysia should maintain its competitive edge in the international fibreboard-making industry by controlling its production cost. 

The country, together with Indonesia and Thailand, still enjoys lower costs due to the constant supply of woodchips from domestic resources. 

Producing a substitute product for natural woods, the industry must be able to produce fibreboard at lower costs and sell them cheap. 

Uncertainties in fuel oil prices do not have much impact on the industry as most fibreboard plants are already using biomass as a source of energy for production. 

The only impact is from the glue resin because its raw material is petroleum by-products and glue resin makes up about 25% of the total production cost. 

It will be good if the company can produce its own glue resin for internal consumption and at the same time, sell them to other users. 

The price of glue resin is likely to go up in the coming years as demand for the product has grown steadily in recent years. 

The increase in the price of industrial glue is largely attributed to the strong demand by the wood and paper-based industries.