Bajaj Hindusthan plans to produce wood substitutes

Bajaj Hindusthan, the country's largest sugar producer, is taking the process of by-product utilisation a step forward by setting up facilities to produce wood-substitutes such as particle boards and medium density fibre (MDF) boards from bagasse and internally produced power and steam.

Three plants are being set up for this purpose by its newly formed subsidiary Bajaj Eco-tech Products.

This will make Bajaj the country's first and the world's second sugar company to take up this eco-friendly venture. The particle boards and the engineered wood such as MDF boards are deemed a desired substitute for natural wood and timber. These are in great demand the world over because they help save trees.

According to a Bajaj spokesperson, the three plants being set up for this purpose will together have a capacity to produce 2,10,000 cubic metres of engineered wood every year.

Two of these plants, located in the eastern and central Uttar Pradesh, will have a capacity to produce 80,000 cubic metres each of MDF boards. The third plant, in western Uttar Pradesh, will have an annual production capacity of 50,000 tonne of particle board.

All the three units are expected to be commissioned in about one year and are likely to begin commercial production by November 2007.

These units will have substantial cost competitive advantage as their entire raw material, including power and steam required for the pressing process, will come from the captive sources.

The proximity to major consuming markets in the north and western India and relatively meagre production of wood substitutes in this region, compared to demand, will be the other advantages that the new units are expected to enjoy.

At present, the country's total demand of panel boards is believed to be far in excess of indigenous production and the analysts expect it to grow by 15 to 20 per cent a year.

The increasing housing demand is anticipated to be the key growth driver for wood alternatives. The expansion of the information technology and organised retail sectors, too, are likely to be major demand-pushers for the panel boards.

Of the total panel board demand of around 8 million cubic metres, the particle boards and MDF boards together account for nearly 4 million cubic metres. Against this, the present total domestic production production capacity is reckoned at no more than 0.3 million cubic metres. There are only about 10 units producing particle boards and two manufacturing MDF boards.

The major portion of the panel board demand is being met either through imports or by using plywood which is also a wood-based product requiring cutting of trees.

The use of renewable resource such as bagasse for the production of particle and other boards, on the other hand, will obviate the need to cut forests and other plantations.

The proposed particle board production of 50,000 cubic metres capacity is estimated to save about one lakh trees every year.