Abstract

Wood plastic composite (WPC) materials have seen a continuous market growth worldwide in the last decade. So-called extruded WPC profiles are today mainly used in outdoor applications, e.g. decking, railing and fencing. In outdoor conditions, moisture sorption in the wood component combined with temperature induced movements of the polymer matrix causes deformations of such composites. On the macroscopic scale this may lead to unacceptable warp, cup and bow of the WPC products, but on a microscopic scale, the movements will cause interfacial cracks between the particles and the matrix, resulting in little or no ability to transfer and re-distribute loads throughout the material. Moisture within the composite will also allow fungi and micro organisms to attack the wood particles.

The market for wood-thermoplastic composite products is growing rapidly. Estimates suggest current production is about 800 million USD per year worldwide, a three-fold increase in every two years. Major markets are decking materials, board and planks for furniture & cladding, floor cladding & laminated wood tiles for flooring, pallets, and automobile and window components. Fueled by the decreasing availability of solid wood relative to projected demands, both recycled wood and plastic materials are being investigated as substitutes. The combination of plastics and wood has been limited to polymers with lower melting point to avoid degradation of the wood materials. These include polypropylene (PP), low and high density polyethylene (LDPE/HDPE0, polystyrene (PS), and polyvinyl chloride (PVC). The wood is in flour form, which is produced from planer shavings and kiln dried mill residues. Construction and demolition wood can also be used to produce composites. Many producers of wood-plastic lumber are seeking ways to improve the performance characteristics of their products. The use of wood fiber rather than wood flour in combination with the plastic materials may enhance the structural properties of composites. Although the wood-thermoplastic products industry has a significant history, technology is still being developed. In Bangladesh the growing demand of wood in construction materials is increasing in geometric progression but shortage of natural wood and forest product there is always a scope to introduce a new product to fill the gap. WPC comes here in the scenario to fill the gap and provide an option to everyone to introduce an eco-friendly replacing product for everyone’s usage.

Background Global demand for timber products is increasing rapidly as a direct result of the growing world population, which is projected to double within the next 35 to 70 years. According to the Ministry of Forestry & Livestock, domestic demand for wood fiber in Bangladesh will increase by 75% by the year 2020. However, during the period from 1999 to 2005, total lumber production from local and imported timber in Bangladesh decreased from 3.81 to 2.22 billion board feet, even though sawmills in Bangladesh were operating at record levels. Allowable levels of timber harvesting in national forests in the Hill Tracts, long considered the breadbasket of lumber production, have been reduced, resulting in less wood production nationwide. So reductions in allowable harvests by the Forest Department have a significant effect on timber supplies.

A decreasing supply of solid wood materials from public lands is expected to result in growing market opportunities for substitute materials, including composite materials produced from combinations of recycled wood fiber and plastic. Trade journals repeatedly cite the development of new composite materials ranging from improved fire-retardant roof panels made from plywood and a foamed sheet of polyurethane to steel studs formed with plastic or fiberglass. Furniture parts, floor panels, ceiling tiles, and door and window parts, are other emerging composite products.

Probably only 10% to 20% of a log ultimately ends up in a value-added product such as furniture. The balance of the log (sawdust, chips, planer shavings, etc.) is often used for low value products such as fuel, animal bedding, or landscaping mulch, or it is landfilled. UNFPA estimate that the total potential for recovery through recycling is roughly equivalent to more than one half of the total National timber harvest, not counting the losses in branches, roots, and stumps. They estimate that less than 5% of building products use materials recovered from the solid waste stream.

At the same time, sawmills in Bangladesh are expressing a critical need to develop better markets for their wood waste. Construction and demolition waste materials and underused recyclable waste plastics are also a problem. These factors combined, as well as the general economic and environmental wisdom of recycling, present an opportunity for any firms in Bangladesh to solve a number of their waste related problems through the development of wood-plastic composite manufacturing.

DEFINITIONS

Wood Fiber: A common term that means any form of wood particle suitable for composites. More specifically, it refers to small discreet particles of wood that are substantially longer than they are across. The ratio of length to diameter (called aspect ratio) is often greater than 10:1.

Wood Flour: A common particulate form of wood often used as functional filler in plastics. Most wood flour has an aspect ratio of about 2:1 to 4:1. Wood flour is available in many different mesh sizes.

Mesh Size : Refers to the size of an opening in a screen used to separate particulate material into different sizes or “fractions.” For instance, a 40 mesh wood flour is small enough to pass through a screen made with 40 wires per inch. This is the same system used to separate grit sizes in sand- paper.

Wood-plastic Composites: Sometimes called “wood fiber-plastic composites.” Any material made by any means containing both wood fibers or flour and thermoplastic materials, with or without any additional materials.

Wood-filled Plastic: A major category of wood-plastic composites wherein wood flour or wood fiber is compounded with plastic. The resultant material is processed as a plastic on plastics equipment.

Compounding: The process of blending filler materials with molten plastic. When properly done, the filler material is completely dispersed and distributed throughout a continuous plastic matrix with no filler-to-filler contact.

Pelletizing: The process whereby hot compound is formed into pellets and cooled. The pellets can be used for either injection molding or extrusion. Most plastics, whether compounds or not, are bought and sold in pelletized form.

Wood-filled Plastic Compound: A pelletized form of a wood-filled plastic.

Injection Molding: A process whereby plastic pellets or pelletized compounds are melted and forced under pressure into a cold mold. The plastic solidifies and takes the shape of the mold. Common examples include flower pots, computer cases, and plastic lawn furniture.

Extrusion: A process whereby plastic pellets or pelletized compounds are melted and forced un- der pressure through a die to make a part of constant cross section and continuous length. Flat extrusions are called “sheet,” while parts with more complex cross sections are called “profiles.” Examples of extrusions include common

drinking straws, plastic lawn edging, and plastic lumber.

Direct Extrusion: The combined process of compounding and extrusion, eliminating the pelletizing step, used most often in larger extrusions, like wood-filled plastic lumber or large volume sheet products. Lineal: A term most often used in the window and door industry. A lineal is a length of extruded material that becomes part of an assembly. For instance, a PVC window is made up of extruded PVC lineal’s that are fastened together to make a window frame.

Objectives The objectives of this project were (1) to identify wood and plastic recycling needs in Bangladesh and market opportunities for composite materials manufactured from these materials; and (2) develop a strategy for the manufacture of selected products. This investigation concentrated on products with high value-added capability, large potential markets, and a projected long-term life. Practical Benefits for End Users This report provides the following benefits to readers: a. The report educates manufacturers about potential wood-plastic composites. b. The information on the potential market for wood-plastic composite products should stimulate interest in the manufacturing of the products. c. The market and resource information provides important ingredients for the development of a business plan, which is necessary for the acquisition of business financing. d. The recyclable materials are characterized relative to the technical requirements of potential products. e. The project results will assist governmental and industrial development agencies in the pro- motion of environmentally beneficial recycling activities. f. The data developed on types, quantities, and characteristics of wood and plastic recyclable materials should be useful for other project efforts to improve and introduce ecofriendly recycling in Bangladesh.

Deliverables

There are two project deliverables: a. This written report describing potential composite wood products to be manufactured in Bangladesh. The

report considers the availability of recyclable wood and plastic, the technical implications and compatibility of the materials and potential products, the market potential for selected products, and strategies to promote product manufacturing.

b. Incorporating the information in the final report, presents possible products, and provides additional

information on selected products. This will also provide contacts for funding assistance and business plan development in future for possible expansion.

Project Procedures

The method of the investigation included these tasks: a. Assembling data on the volume and location of wood and wood fiber waste in Bangladesh and classifying it

by:

- species, - size, - shape or form, - current disposal and use, - current handlers, and - value and cost.

b. Assembling data on the volume and location of recyclable plastic in Bangladesh and classifying it by type.

c. Investigating high value-added composite wood-plastic products and/or parts or similar products like

melamine face particle board currently being made or imported in the Bangladesh and internationally. This included an investigation of parts and products in the automotive and building products fields that could substitute recycled wood- plastic for current materials.

d. Preparing a technical evaluation of potential products, considering the requirements of the products and

the characteristics of the recycled materials. e. Preparing Organizational data including associated cost to set up a state of the art WPC plant in Bangladesh.

Executive Summary For the purposes of this study, wood plastic composites (WPC) are defined as composite materials that contain wood (in various forms) and thermoplastic material. The scope of the study does not include particleboard products such as medium density fiberboard (MDF). WPC is already an established material in the USA particularly for garden decking and non-structural building applications, such as exterior window and door profiles. Wood plastic composites are currently used in, or are under development for, a wide range of applications in a number of market sectors including: • Building and construction • Interiors and internal finishes • Automotive • Garden and outdoor products • Industrial and infrastructure • Other low-volume, niche applications The US total market for WPC products in the two key market sectors was estimated to be in excess of $350 million (£228 million) in 2001 with predictions to grow to more than $2,000 million (£1,300 million) by 2011. In contrast, WPC markets in the UK and Europe are very mature. Despite the demonstrable success of the product in the USA, UK, EU market development in Bangladesh has been slow. Bangladesh market growth is predicted and expected but there is a significant lack of confidence as to when this is going to occur due to lack of knowledge by the consumer and nonexistence of product awareness and lack or recycling practice. Market development in the USA and other parts of world has been particularly effective when established suppliers have introduced WPC as a more attractive product. It has been suggested that this will be the case in the Bangladesh but there are no indications as to when this will occur as there is no involvement by the business community to take up such initiative till now, but such initiative will easily take over the whole market which happened with MBM board and

MDF board products. The market in Europe is expected to increase from virtually nothing at the moment to somewhere in the region of £500 million to £1 billion over the next five years. In volume terms, this equates to up to 1.3 million tonnes of WPC material. It has even been suggested that the European market for WPCs will eventually exceed that in the USA in the longer term (10 years from now). Companies are expecting to start manufacturing products in significant volumes during the course of 2003 and 2004. By 2004 these materials will become much more commonplace and will be more widely available. Although there are conflicting views as to which application will offer the greatest opportunity for WPC manufacturers in the UK , EU, USA and ASIA, the applications most likely to emerge and achieve significant growth in the short to medium term are outdoor products (decking, fencing and garden/outdoor furniture), doorframe profiles and window profiles, Floor Tiles, Lumber and Board products for furniture. These applications can be manufactured using a proportion of recycled plastic and primary and secondary wood processing scrap as feedstock’s and will provide an attractive method of removing some of these materials from the national waste stream. Indeed, The newly formed Bangladeshi Company Green Wood Products . is planning to go on to the production of WPC (flooring, Window and Door profile, Lumber Board, Cladding) which are in the process of being launched onto the market with the brand name TimbaPlus. It is unlikely that WPC products containing recycled will be acceptable to the end-user in the short to medium term as they will be providing more value then what consumers will pay and will also provided in acceptable price. There will be a number of issues to be addressed to ensure that the use of recycled happens efficiently and effectively. These include: • The negative image of recycled products • Security of feedstock supply • Lack of standards • Certification / approval of products • Reluctance of potential users to change It is generally accepted that the lower-value, outdoor products will be the first to make an impact on the Bangladesh and international market although they may not be sustainable in the longer term. So keeping the interior trends and consumer demands in mind new design and product derivatives has to be introduced replacing the existing products periodically according to market trends. They will, however, be very important in introducing the consumer to WPC materials and the benefits that they can offer over competing materials. Additional effort will also be required to promote these materials to the consumer to help to generate market pull. Promotional activities should include a media element, focused on relevant trade journals and magazines, home and garden publications, newspapers, the Internet and television. Another promotional technique that is used extensively is exhibiting at trade shows. In the USA, a number of companies have used the International Builders’ Show to introduce new WPC products and their usage with high life span and low cost maintenance as well as to maintain their market presence. Trade shows and exhibitions are an excellent means of introducing a new product to as wide a range of people as possible and will be particularly relevant to the evolving WPC market in Bangladesh. Examples of relevant exhibitions and trade shows include the National evel Trade shows, International Trade shows, fairs of Furniture and Home decoration items, REHAB fair are amongst few.

The raw materials and manufacturing technologies for WPC have been developed and are now well established in the USA, China and Japan. Commodity virgin or recycled plastics together with processed wood waste are the main raw materials. Additives are used to aid processing and optimize product lifetime. This is typical of any plastic composite manufacturing process. Manufacturing is based on well-known plastics processing operation, particularly extrusion, with minor modifications made to accommodate the particular properties of WPC raw materials. Technology processes for the manufacture of foamed composites that Green Wood Products will be using, which are lighter and look more like real wood that many current WPC materials doesn’t. These materials will be required if WPCs are to achieve any significant share of the local and international market. The materials that are currently available in the internationally are unlikely to be acceptable in Bangladesh as many of them do not look or feel like wood that we are habituated to use. They are heavy and have too much of a plastic- like appearance. Recycled plastics and wood have both been effectively proven as acceptable WPC raw materials in the major Asian countries including China and Japan. It is expected that the manufacturing techniques used in the China can be effectively transferred to Bangladesh operations. There are a number of patents already filed by Chinese manufacturing technologists and it is expected that these will be the basis of Green Wood Products manufacturing operations in Bangladesh. The Chinese industry has also been active in standards with three under development. This activity is predictably, based on market maturity, leading European, USA, UK, Japanese, Asian standards organizations. There is, however, a general reluctance amongst potential manufacturers and end-users, in the Bangladesh especially, to consider plastic recycle materials as a feedstock for WPC materials as in Bangladesh most of the business firms is willing to import products rather than developing their own in accordance with market trend. Issues such as material consistency, security of supply, lack of material standards and product performance have all been cited as reasons for this reluctance. Recycled wood, i.e. post-consumer wood waste, will also be considered at all due to the no risk of contamination, for traceability and quality issues. Wood from primary and secondary wood processing will be a suitable option for WPCs Currently, the preference would be to use recycled polymer and wood flour or fiber from traceable sources and it is likely that this is how the market will develop in the short term. There is an issue, however, relating to the high costs of these materials in the UK and the rest of Europe at the moment. These will have an impact on the cost of the final product. The use of recycled materials may become more commonplace as market confidence in the product increases and in an attempt by manufacturers to reduce production costs. It is estimated that there are around 200 businesses active in WPC manufacturing process worldwide. The majority of these are based in the USA, China, Thailand, Malaysia, Indonesia and Japan. There are a number of businesses being established in the UK and the rest of Europe, addressing materials compounding and manufacturing processes. It is expected that a number of companies with established plastics processing manufacturing facilities will enter this sector when market developments are noted. The conclusion, based on all input to this study, is that WPC manufacturing in the Bangladesh is a viable business proposition. The WPC market is likely to develop and progress even if government assistance is not provided. However, there is an opportunity for thoughtful, well-structured intervention from government and public sector organizations like City Corporations, LGED to enhance the speed of development of the industry and its uptake of recycled feedstock materials. Furthermore, there are limited technology and manufacturing barriers to viable WPC manufacturing in Bangladesh. Product diversification for plastic extruders to WPC is considered a low risk step from a technology point of view, as long as IPR issues are addressed.

WPC Products and Applications For the purposes of this study, wood plastic composites are defined as composite materials that contain wood (in various forms) and thermoplastic materials. The scope of the study does not include particleboard products such as medium density fiberboard (MDF). Wood plastic composites are currently used in, or are under development for, a wide range of applications in a number of market sectors including:

• Building and construction • Flooring and Furniture • Interiors and internal finishes • Automotive • Garden and outdoor products • Industrial and infrastructure • Other low-volume, niche applications

Figure 1 below shows an extensive, but not exhaustive, list of WPC applications. Sector Construction Interiors / Internal

Finishes Automotive Garden / Outdoor Industrial /

Infrastructure Other

E

nd M

arke

t A

pplic

atio

ns

Cladding - exterior horizontal and vertical

Balustrades

Door and head liners

Decking

Handrails

Black Piano Keys

Doorframes and components

Blinds / shutters Ducting Fencing and fence posts

Industrial packaging Hot tubs

Ducting Coving Interior panels Garden Furniture Marine pilings / bulkheads

Fascias, soffits and barge boards

Dado rails Rear Shelves Outhouses (sheds, etc)

Pallets/Crates/totes

Pre-finished floorboards

Decorative profiles Spare tyre covers Park benches Piers / docks

Roofline products Interior panels Truck floors Playground equipment Railings

Shingles (roof tiles) Kitchen Cabinets Playground surfaces Railway sleepers

Stairs Laminate flooring Rubbish Bins

Timber Office Furniture Signage

Window frames and components

Shelving

Skirting boards

Sound proofing

Worktops

Figure 1. WPC Markets and Applications

Principal WPC Markets At present, the Bangladesh market and, as a result, there is little or no information on individual market sizes and/or values. Therefore, information relating to the USA and Worldwide market for WPCs in each sector is presented and compared to the equivalent sector in the Bangladesh noting any similarities or differences. Key stakeholders in the field of WPCs then contributed their opinion on each of these sectors to allow a judgment to be made on how they are likely to develop in Europe. From initial literature reviews and stakeholder dialogue, five key end markets applications have been identified and the study has focused on each of these. • Garden and outdoor (including, garden & outdoor furniture, decking and fencing) • Construction and building (including exterior window and door profiles) • Industrial/Infrastructure (including marine, ship building and rail)

• Other Applications (including automotive, interior profiles and furniture) • Niche Applications These key markets and applications are discussed in more detail below and, where available, information relating to other markets and applications is given. Garden & Outdoor The application for outdoor usage of WPC is very vast. Using the WPC for making pots for plants, park benches, exterior cladding, dustbins, garden rails, fencing for park, park toys and structure is very suitable and cost effective option. In USA, EU, ASEAN countries it is the most sought after material for such purposes. The unique selling point of these materials is their superior performance relative to comparable wood products (costs comparisons are discussed elsewhere). WPCs are more resistant to moisture and are less likely to affected by mould; they do not warp or splinter; they are generally more durable and they have lower maintenance costs since they do not need to be painted or stained. In addition, they can be sawn, installed and joined like wood. These characteristics are discussed elsewhere in this report. A large number of WPC decks also contain a proportion of recycled plastic and use wood waste from the timber, and associated industries. They often use this as a key selling point and promote the environmental credentials of the material in that it removes problem materials from the waste stream. Construction & Building The majority of published data on the uses of WPC in the construction sector focus on the US and global market. There is very little market information currently available in the public domain that offers an indication of the use of WPC materials in the construction and building products industry outside the USA and Global Market rather than for Bangladesh; however statistics are available that demonstrate the global position of the overall construction industry and allow opportunities for WPC products to be identified for Bangladesh. The total US construction market value reached around $860 billion (£559 billion) in 200220. This figure includes all services related to the construction of both residential and non-residential private buildings and that of all public buildings put in place during the period. A variety of potential applications for WPCs have been identified within the industry’s building materials sub-sector. The main application is exterior window and door profiles. The demand for windows and doors contributed over $22 billion (over £13 billion) to the overall US construction market value. Within this section of the construction sector in the USA, products manufactured using WPC materials met around 0.3% of the total demand with a value of $65 million (£42.3 million). The future demand for WPC materials in the US window and door manufacturing industry is forecast by Fredonia to double by 2006 to a value of $135 million (£87.8 million) and continue to escalate, as shown in Figure 9.The unique selling points of WPCs in these applications are their limited maintenance requirements comparative to timber products (i.e. annual painting or staining is not required), their resistance to warping and splintering and they are more aesthetically pleasing than PVC-U windows. WPC products can be manufactured in a range of natural colors and look more like wood than PVC-U, which can offer a selling advantage over products manufactured from PVC-U or plastic lumber. Wood plastic composite window profiles are not manufactured using recycled materials. Small amounts of process scrap material from standard PVC-U window manufacturing lines are fed into the WPC manufacturing process. Process waste recycling is standard practice throughout the window industry. The wood fiber comes from the waste materials resulting from the manufacture of standard wooden window products. Trends within the construction industry will affect the market potential for WPC materials. Although PVC-U products dominate the market for windows and doors, environmental pressure over its use, as a chlorinated compound, and the threat of prohibitive deforestation factors giving Bangladeshi Door and window manufacturers cause for concern and likely to create opportunities for WPC material producers3. Another consideration for WPC manufacturers entering the window market is the presence of strong distribution channels for PVC-U and Aluminum products,. It is understood from discussions with a number of industry experts

that PVC and Aluminum profile manufacturers and Importers are actively investigating the potential for WPC in this market since the European PVC industry is presently at standstill and new market opportunities are being pursued. Across Europe there are approximately 4,000 PVC lines that have the capacity to produce 3,000 tons of extruded product every year i.e. 12 million tons of PVC profiles. These production lines are, however, only around 60% occupied leaving an estimated 4.8 million tons of free capacity. The consultation stage of the study has resulted in the exterior window and door profile market being identified as a priority market for WPC materials. As the market data presented above indicate, this market is significantly bigger than the garden and outdoor products market and is likely, therefore, to offer more opportunities. There are, however, a number of barriers that would need to be overcome before products could be launched successfully in this market and these are discussed in more detail in the Market Barriers and Issues to be Addressed section of this report. Another sector of the fenestration market that is being actively investigated for WPC applications is inner and outer doorframes products. TimbaPlus has developed a process to manufacture PolyTimba doorframes (PVC based WPC). The door industry is some 15 years behind the window industry with regard to new material development and exploitation. Wood replacements have been considered in the past but have not achieved wide acceptance due to the difficulty of working with alternative materials on site (sawing, shaping and joining). The industry requires a product that has superior performance to wood but that can be worked like wood and can be retailed at a similar price. TimbaPlus advises that PolyTimba has been developed with these issues in mind. Industrial / Infrastructure Marine According to research carried out by the Washington State University, pressure treated lumber is predominantly used in marine applications in the US but around 7,000-8,000 tons (approx 7,100- 8,100 metric tons) of material is currently replaced each year. Furthermore, replacement costs the US Navy about $250 million (£162.5 million) annually. Similarly, $200 million (£130 million) is spent each year on materials for non-military ports. In addition, there are around 7000 wooden marinas in the US with annual total replacement costs of an estimated $70 million (£45.5 million). From these figures and its own research, Washington State University estimates that WPC materials could take up to 20% of the replacement market share, valued at around $100 million (£65 million) per year ($90 million in ports and $14 million in marinas, £54.5 million and £8.5 million respectively)27. The move away from the use of CCA (chromated copper arsenate) preservatives, increasing legislation and public perception are all factors driving change in areas involving wood and offer potential for alternatives such as WPC materials. In addition, the general benefits of WPCs compared with wood (see decking section above) make them attractive for this application. Major R&D in waterfront applications for Navy facilities is ongoing, with the development of next generation WPCs suitable for structural use to replace treated timber currently utilised the support of pier/dock areas3. The use of foamed wood composites is also being considered and researched in the USA for use in floating decks and piers because of their lightweight nature. For example, the US Navy funded a five year $10 million program at Washington State University to develop such composites that could be used to replace pressure treated lumber28. Little information is currently available on the Bangladesh use of WPC for waterfront applications as all the ship building yards in Bangladesh are heavily dependent upon imported timber and WPC products for ship construction; however, discussions with an industry representative have established that WPCs have been used recently in the Bangladesh for a decking application by Bashundhara Shipyard. The project in Bashundhara Ship yard involved installation of 1600 linear metres of WPC decking. Western marine Services, one of the similar firms operating in the Chittagong , utilized the material at the request of the customer for interior and exterior flooring of the ships. The material used in this project was competitive on price with natural timber. The installer has significant buying

power in relation to timber so this made the WPC relatively more expensive, although it should be noted that current WPC prices are much lower than those quoted around three years ago. There are more than 400 marinas listed in the UK29 and harbour construction firms worldwide will continue to offer WPC as an alternative to natural timber, particularly since the costs of installation are now more competitive. It remains to be seen how the WPC dockside deck performs and this could have an influence on the acceptance or otherwise of these materials in this application. WPC closely resemble the appearance of natural timber and feel more like. Rail Bangladesh Railway (BR) replaces roughly two percent of the 70 million wooden sleepers used annually. Wooden sleepers will last for anywhere between three and seven years. Replacement costs the rail industry in excess of a $ 10 Million (£6.50 million) per year. Plastic lumber manufactured from recycled plastic bottles has been introduced over the past ten years to act as an alternative to wood and is proving attractive in countries like Japan, China, USA, EU, and Russia. On the WPC front, interest is growing among manufacturers. For example, Reconstituted Technologies has received commitments from some of the US’s largest railroad companies to purchase 1.5 million of its rail sleeper products over the next five years following positive test results at the Association of American Railroad’s Transportation Technology Centre, where performance testing is still ongoing. The sleepers continue to perform on the Centre’s Test Track on a 5% curve and have carried over 185 million gross tons of heavy axle traffic31. There are currently 25 WPC and plastic lumber sleepers being assessed and are proving to be more durable than, for example, comparable oak sleepers, under high loads and arduous conditions. In addition, they offer the general benefits of WPCs in that they do not rot, crack or splinter6. At around $30-40 (£19.50-£26.00) per sleeper, the WPC product is competitive against standard oak sleepers. The Bangladesh rail industry operates on a much smaller scale than that in the United States and our discussions with industry representatives has determined that wood products are being replaced with materials such as steel or, more recently, concrete. There has been some activity within the plastic recycling industry to develop plastic lumber from waste plastic but we understand this has not gained the success achieved in the US. It is anticipated that WPC materials will not make a significant impact on the Bangladesh rail industry, particularly because of the requirement to supply in accordance with materials performance standards, both at national and proprietary level. These standards invariably take many years to be drafted and implemented and are unlikely to be in place for WPC materials in the Bangladesh in the near future. Nevertheless, there is always a scope for using the material in passenger car benches, doors, seats, and interior cladding which will give cost effective option for maintenance free long life cycle product, Other Applications Automotive WPC materials are currently used in automotive interior applications but manufacturers are moving towards use of other natural fibers in processing of composite materials. As one of the earliest applications for WPCs, the demand for materials for this application will continue, although its 8% share of the total WPC market will be eroded by the development of composites that use alternative natural fibers such as flax, hemp, jute and kenaf. Demand for natural fiber composites has been evident in Europe where environmental issues are prominent, despite problems with odor and mildew associated with such materials. As an example all BMWs and Mercedes use natural fibre composites for components such as door liners, boot liners and parcel shelves. WPC manufacturers supplying the automotive industry face a significant challenge for the future with the introduction of the End-of-Life Vehicle Directive (ELV), compelling EU countries to ensure responsible disposal at the end of vehicle life. Manufacturers are now required to recycle 85% of automotive parts, a figure that is set to increase to 95% by 201531. Also, quality assurance requirements and legislation compelling automotive manufacturers to ensure traceability of all materials used in manufacture present issues that may affect demand for WPCs in this sector, especially those manufactured from recycled polymer and wood. Furthermore, reduction of the overall weight of vehicles is of paramount importance to the automotive industry.

Existing WPC materials are heavy and this may motivate car manufacturers and first tier suppliers to seek either alternative materials or alternative composite fillers. In manufacturing industries such as the automotive sector, use of components and materials at the lowest possible cost to meet the minimum requirements of materials and performance standards are also threats to the use of WPCs. It is unlikely that this application will offer any significant opportunities for WPC manufacturers now or in the future. In Bangladesh the biggest automotive industry is Bus and coach bdy building for public transportation. The WPC products can be used for floors. Seats, interior walls, cellings, dashboards, sound proofing, thermo insulation and more. Interiors (decorative, structural and furniture) Interior applications for WPC materials are being increasingly promoted and companies such as Japanese firm Ein Engineering offer technology for production of profiles suitable as decorative moldings and trimmings. Similarly, Fasalex also offer a total package for license to manufacture products suitable for interior applications. Lankhorst, a Dutch recycling company, plans to go into production in the middle of 2003, manufacturing WPC architraving as well as fencing and seating for outdoor applications. The interior market is cited as a growth area both now and in the future and research is ongoing to develop materials that are suitable for structural applications and that look as good as solid wood; however at the time of writing, no companies were identified that are actually manufacturing WPC products for these applications. In Japan, WPC material is well accepted for applications like decking and other building products but the percentage of material used for other interior decorations and furniture is low in comparison, falling into the category of ‘other products’, which accounts for around 20% of all WPC products in Japan. The US market for molding and trim currently represents only a small percentage of the demand for WPC material in decking and window and door profiles. One of the key advantages of WPC materials is that they are stiffer than polymers and tend to have good elastic properties– that is to say, they recover quickly from loads being applied and removed. This means that it would be good for furniture applications. There would, however be significant barriers to be overcome before WPC would be considered for this application. At the low-cost end of the furniture market, the material would be competing directly with low cost products such as medium density fiberboard (MDF) and Chipboard and would not be considered unless it could compete on price. At the high end of the market, existing WPC materials do not have the aesthetic qualities that would be required and, in some cases, would be competing directly with quality timber products. Moreover in Bangladesh floor tiles made with WPC from recycled materials will benefit the whole country by cutting the usage of gas in ceramic tiles kiln and also reusage of waste materials turning them into cash products. This market is unlikely to offer any significant opportunities in the short to medium term for either high value or high volume applications. As has been highlighted, however, there is work on-going to develop materials that are more appropriate for interior applications and this may become a more attractive market in the longer term. Other Niche Applications Research carried out during this study has identified a variety of other applications that are being mentioned by a range of sources as possible uses for WPC materials but little information is available to support these claims and these should be considered as niche markets. These include: pallets, flowerpots, shims (thin washer or strip), and cosmetic pencils, grading stakes, tool handles, bath panels, office accessories, violin cases and decorative storage boxes. Market Barriers and Issues to be Addressed Market Pull versus Material Push Evidence from the world has indicated that the development of business for WPC is critically dependent on market pull. Many companies that have tried to create an end-use for their WPC material or product have failed. Successful companies, however, are those that make products that are already valued by customers and they present WPCs as a

way to make them better or to expand their product portfolio. Many of the companies contacted during this study have indicated that much of their interest in WPCs has been in direct response to their customers’ demands and requirements. Negative Image of Recycled Products Many products made from recycled materials, wood plastic composites included, face strong attitudinal barriers. Manufacturers that have committed to the use of recycled materials often find it difficult to have their products accepted onto the market. Product buyers believe that they should be cheap, materials specifiers and design engineers question their performance and durability and consumers often expect that products made from recycled materials will not perform as well as those made from virgin materials. This could be a particular problem in the construction industry, specifically window profiles. Many materials specifiers will not accept products containing recycled materials and always specify virgin. There is also a degree of skepticism amongst this influential group of people. They believe that WPCs are more expensive than wood and that their performance is inferior to materials currently being utilized. Significant effort will be required to change these attitudes by proving that these beliefs are unfounded. This situation is further exacerbated by the fact that there are no recognized standards for recycled plastics so quality control and quality assurance can become problematic. To get around this, some WPC manufacturers in the USA do not highlight the fact that their product contains recycle materials at all. It is important to note that current ‘first generation’ WPC products manufactured using recycle materials, although positioned on the market to compete with wood, do not look like wood, do not feel like wood (they have been described as being too much like plastic) and are heavier than wood. Although these products will be the first to be introduced to the Bangladesh market they are most likely to be acceptable to the Bangladeshi consumer in the longer term as there is a strong preference for natural wood or a realistic wood-like appearance and feel. What have been termed ‘second generation’ materials will be required to make the market move. These new materials look more like wood, have a grained texture and can be manufactured in such a way as to be approximately the same weight as softwood. The key differences between these materials are detailed in Figure below. Characteristic First Generation Second Generation used by Green Wood Products Density > wood ≤ wood Surface Smooth Textured / grained Visual appearance Like melamine foil ‘Natural’ wood appearance Physical characteristics Solid extrusion Foamed extrusion

Figure Showing 1st and 2nd Generation WPCs As these materials have a foamed structure, they will require a modified processing technology and materials formulation, especially in terms of the additives required. For example, chemical foaming agents may be required. Davis-Standard is one such world renowned standard that our company has selected and a Chinese company is developing a process for the manufacture of foamed WPCs, work that is being carried out in conjunction with a technology partner. As this work is at a critical stage, Davis-Standard was not able to elaborate any further on the processing or feedstock details. They did state, however, that the materials currently used to manufacture WPCs, namely polyethylene, polypropylene and PVC (including recycle materials) and wood flour can be utilized in this new process. Other developments in the field of foamed composites are noted in the Technology Developments section of this report. Security of Feedstock Supply The issue of security of supply relates to both the recycled wood and plastic feedstock for the manufacture of wood plastic composites. Primary and secondary wood wastes i.e. post-industrial wood wastes from sawmill and from wooden product

manufacture are best for the production of WPCs. They are relatively uncontaminated and have a high degree of traceability. The supply chain for the materials, however, is already quite well developed in the UK and many of the producers of these wood wastes have strong links with wood product panel producers36 (e.g. MDF and Chipboard) and the paper industry. For both of these end-user industries, consistency of supply and material availability are extremely important. As a result, long-term contracts for the supply of raw materials are negotiated annually to ensure that these requirements are met. Another end-use for wood waste, that is starting to generate interest in the UK, is biomass. This sector recognizes waste wood as a preferable fuel to virgin fibre for production of energy. Already, our firm’s personnel in the field are compiling databases of sawmills to help assess the price, volume and quality of materials across the Bangladesh. Other end-uses for primary and secondary wood wastes include bark and wood chips for garden and other outdoor landscaping applications, animal bedding and cat litter. As a result, there could be a lot of competition for this material. The forestry and forest products industries are very fragmented and, even within these industries, there is a lack of information relating to raw material and product prices, materials availability and the accuracy of pricing information. Most businesses currently rely upon their own understanding of the market place and the supply chain as well as their personal networks for data collection. A further complication is that the forest products industry is very much influenced by globalisation and industry restructuring and is, therefore, subject to global price, supply and quality fluctuations. This makes it very cyclical. As a result, it is difficult to obtain accurate prices for wood fibre products suitable for the manufacture of WPCs. As an example, sawdust can be obtained from a specialist wood products supplier for approximately BDT 11000/ton including haulage (data obtained by TimbaPlus). This material has a moisture content of 8-9% and is appropriately sized. It would be advisable for potential manufacturers of WPC considering sawdust as a feedstock to negotiate a contract with a supplier to ensure consistency of supply and to agree appropriate prices. Post-consumer and post-industrial wood waste can also be used but there is little in the way of infrastructure in Bangladesh for collection, transportation and sorting – the recovery of suitable materials from a demolition site is costly and difficult. There is also an issue relating to the potential contamination of these materials with, for example, paints and timber treatment products. This is discussed in more detail in the section of this report entitled Wood Plastic Composite Feedstock’s. At the moment, it is cheaper to send this waste to landfill. The issue of consistency and security of supply also relates to the recycled polymer feedstock for WPCs. Although there are a number of mechanical recyclers in Bangladesh , they tend to be small and medium sized companies with capacities of less than 80,000 tonnes per year. For companies planning to use recycled polymer feedstock to manufacture WPCs this could be an issue in the longer term. As the volume of WPC produced increases the demand for raw materials will increase. Manufacturers might, therefore, have to source recyclate from more than one supplier, which could lead to problems with consistency – again this links back to the lack of standards for recycled plastics. Increased demand for recyclate will lead to increased competition, a situation that has arisen in the USA. Trex now imports baled LDPE from Spain and Portugal as a direct result of the tough competition in North America for this material. This lack of consistency could also have implications for the end product. Manufacturers will have to provide some form of warranty with regard to the expected performance and lifetime of a product. Manufacturers will sell products with a guarantee and they need to be confident that the products live up to expectations. They will be less confident of this if they have to use recyclate from a number of sources and they cannot check the performance of these materials against recognised national or international standards. Again, this would encourage manufacturers to use virgin polymer rather than recycled. Ultimately, the selection of polymer feedstock materials will come down to economic factors. At the moment in Bangladesh, it is easy to source virgin polymer of a known quality at a relatively very high in price. As an example, virgin linear low density polyethylene (LLDPE) can be purchased for USD 1400 per ton. Recycled LLDPE (from

crushed and granulated plastic bottles) is available in a range of formats and at a range of associated costs. Clean, uncontaminated, single color baled film costs between USD 400~USD 500 per ton but this will require additional processing (e.g. shredding), at a cost, to make it suitable for the manufacture of WPCs. Prices can be as high as USD 550~USD700 per ton for recycled LLDPE compounded pellets although these require no further processing prior to being used as WPC feedstock. Economically, there is an incentive for a potential WPC manufacturer to source plastic recyclate but this assumes that the security of supply issues outlined above can be addressed. As generally recognized, there needs to be some encouragement to generate recyclate by improving the collection, transportation and sorting infrastructure. Government intervention may be required to increase landfill tax thereby making it more attractive to recycle rather than send materials directly to landfill. In addition, there needs to be a chain of supply and demand - demand that could be created through the use of recyclate in WPCs - to encourage and develop a constant waste stream and, hence, a constant supply of reprocessed material. Lack of Standards As has been highlighted above, there are no recognized standards relevant to recycled material. Similarly, there are currently no recognized standards specific to WPCs. This means that there are, at present, no means of determining the performance of these materials appropriately and consistently. There is, however, work being undertaken in the USA by ASTM International (formerly known as the American Society for Testing and Materials) to identify, modify or develop suitable standards. At present, WPC materials are being tested in line with standards depending on the material composition or product type and properties required, e.g. related to plastics, plastic lumber or wood standards. Three standards for wood plastic composites are currently being developed within ASTM International (www.ASTM.com) under the Wood Thermoplastic Composites Section. One provides guidance for testing procedures to evaluate these products. Another defines the testing and acceptance criteria that will be recognized by the USA building code for guardrail systems and deck boards. The third standard describes a procedure to develop engineering design values for wood-plastic products. Engineering design values can be used by engineers to design a structural system with these products. The title and scope of these new standards are in draft form. No additional information is currently available regarding their stage of development (work started on these standards in February 2003 so, at the time of writing this report, it is unlikely that significant progress has been made) or when they are likely to be implemented. These standards will be vital if material specifiers, designers and engineers are going to have the confidence to use these materials especially in applications such as windows and other construction products. This will become even more important as new WPC materials that can be used in structural applications are developed and introduced onto the market. These materials will not be used if their lifetime performance cannot be predicted with any degree of accuracy and repeatability. Certification / Approval of Products In the USA, a few products, mainly decking, flooring, rail sleepers, exterior cladding, dorr & window profiles, boards, lumber and railings, have now obtained building code approval. This means that they have undergone a series of tests and have met the minimum performance requirements set out in these codes for products that are used in the construction industry. One such certification organization in Bangladesh is the Bangladesh Standard Testing Institute (BSTI) – there are others. The BBA’s certificates contain independent information on the performance of building products and provide data on, for example, durability, installation and compliance with Building regulations across Bangladesh like CDA, RAJUK, Civil Engineering Department of Bangladesh Government, BET. Assessment covers three distinct areas – laboratory testing (to ASTM requirements where possible), site inspections and factory production control. It is not a legal requirement to obtain building accreditation but if a supplier wants its product to even be considered by, for example, a house builder it needs to be certified. This accreditation process is time-consuming and expensive particularly when it is a novel product such as WPC that has not been certified before. At the time of writing this report, TimbaPlus is actively pursuing BSTI accreditation for their WPC products.

Reluctance to Change Potential users of wood plastic composites must have considerable motivation to redesign and/or re-engineer their product to accommodate this new material. This in itself will have significant implications in terms of costs and resources but there will also be repercussions in terms of the manufacturing process and the performance of the product in-situ. Consideration has to be given to, for example, the costs involved in retooling; retraining of employees in the use of the new material; performance of the new material compared to traditional materials; can the composite be repaired in-situ? Evidence may also be required to show that there is a successful track record of WPCs in the particular application. Unless wood plastic composites can offer benefits that outweigh these, and other, considerations then it is unlikely that they will be accepted as an alternative to materials currently being used. It is clear that many of these issues are not specific to wood plastic composites but are relevant to the recycling industry in general and to current and potential users of recycled materials. These will be the key areas where WRAP has the potential to make a significant impact on the supply and demand for recycled materials and to help change the attitudes of industry and the public alike on products manufactured from recycled materials. Competitive Analysis This section of the report looks at some of the competitive aspects of the wood plastic composite industry. As with much of this study, it is based on the activities in the USA and worldwide as this is where the market is most well established. As has been noted throughout this report, and has been highlighted by key stakeholders interviewed during the review of the situation in Bangladesh, the Bangladesh market is likely to progress in a similar way to that in the rest of the world. Price Comparisons Generally, the strategies pursued by wood plastic composite manufacturers involve gaining market share, sacrificing more long-established materials, especially wood in the decking, fencing, flooring, furniture making and both indoor and outdoor market, and wood and plastic in the windows and door profiles market. WPC materials generally compare to products manufactured from high quality, premium wood on costs so many companies invest in the promotion of the enhanced characteristics of WPC products and the maintenance cost savings. The flooring market is the most advanced application for WPC material in Bangladesh as there is no such product exist which is manufactured locally and which will directly replace ceramic tiles in Bangladesh. It is more difficult to do such a direct price comparison with window profiles as there are a number of factors that affect the cost of these products such as size, style, shape, colour and finish with existing PVC and Aluminum profiles. We understand from our research however, that WPC window profiles, which will become available in Bangladesh, will cost less than equivalent PVC profiles – figures of 35-40% less have been quoted. The other key application for WPCs in the short term is exterior door profiles. Again, there are a number of factor that influence the cost of a door frame including size, style and shape so it is difficult to give an exact cost. TimbaPlus is at an advanced stage of the development of its WPC door profile technology and has stated that these door profiles will be cost competitive with equivalent profiles manufactured from softwood but will offer superior performance characteristics Competitive Strategies To a lesser extent, companies try to differentiate their WPC products from those of their competitors. Companies following differentiation strategies can differentiate their product on cost or on unique attributes that make it stand out from the competition. Our research indicates that, at the moment, worldwide, the profit margins on WPC products are attractive and companies do not have to compete on cost. This may change in the future when the market begins to mature and become more saturated and production costs come down. The situation is likely to be different in Europe where a straight transfer of the materials currently available in the US to this market will not be sustainable in the longer term. As has been discussed in the Market Barriers section of this report, these ‘first generation’ materials do not look like wood and this will be unacceptable to the European consumer, who has a preference for natural wood products or those that look very much like wood. But in Bangladesh people are now

very much accustomed with fiber-wood or MDF for ease of access and cheap price although they still admire wood products. Any company that can make products that look and feel more like wood will be able to differentiate them from other products on the market. This differentiation strategy can be followed because the product will have unique attributes that are valued by customers (their wood-like appearance) and that customers perceive to be better than or different from the products of the competition (they look better than other materials). The value added by the uniqueness of the product may allow the firm to charge a premium price for it. This may not, however, be sustainable in the longer term as competitors could, relatively easily, copy these products. Competitive advantage would be conferred by, for example, the early entrants to the market developing relationships with key strategic clients (e.g. house builders), and developing good distribution channels – these issues are discussed in the Marketing of WPCs section of this report. This would be more difficult for competitors to emulate. In general, the growth strategies followed by worldwide companies manufacturing WPC products are in product development. In many cases, the companies were already supplying products manufactured from wood or plastic and developed these new products as a way of increasing market share , they tend to offer product with low maintenance and long life. Much of the interest in WPC manufacture in Europe is coming from the plastics processing industry. WPC product development strategies for plastic extruders are considered a low risk step from a technology point of view, as long as IPR issues are addressed (see WPC Technology section for details). Analysis of the WPC Industry Using the findings of both the primary and secondary research, Porter’s Five Forces model was used to analyze the Wood Plastic Composite industry to provide a better understanding of the industry as it is currently in the USA. A number of key commentators in the field of WPC market development, The model suggests that an industry is influenced by five forces namely: • Threat of new entrants / barriers to entry • Internal industry rivalry • The threat of substitute products or services Porter M.E, 1980, “Competitive Strategy: Techniques for Analyzing Industries and Competitors”. The Free Press • The bargaining power of customers • The bargaining power of suppliers Each of these is discussed in more detail below. Barriers to entry / threat of new entrants The key potential sources of barriers to entry set out by Porter were considered and described in the points set out below: • Economies of scale – a serious consideration from two perspectives: o There are a number of large, well-established companies supplying WPC products across a number of markets (Trex, AERT, Vanachai etc). These companies are showing an interest in entering the Bangladesh market through export o Manufacturers supplying products in addition to WPC will have scale advantages in terms of market leverage • Product differentiation – this was considered to be a minor barrier. US consumers, generally, do not differentiate between competing WPC products at the moment (the Xerox effect – discussed elsewhere). In addition, the products are not difficult to imitate / compete with. In Europe, the consumer is more likely to require a material that looks and feels more like wood than the WPC materials that are currently available. Any company that can meet these requirements will be able to differentiate its product and achieve competitive advantage – at least in the short term. • Capital requirements – a start up operation will have high capital requirements for premises,

License agreements (if appropriate), processing equipment and tools and dies. • Access to distribution channels – there are a number of well established distribution mechanisms open to all competitors (discussed elsewhere). Overall, the barriers to potential new entrants were considered to be at best moderate other than the high level of capital requirements. The threat of new entrants might, therefore, be considered to be moderate to high. There is, however, continued growth of WPCs in existing applications and the development of new applications for these materials and many new entrants to the market are considering these new applications. It is suggested, therefore, that current market perceptions would make market entry (from a start-up with no established reputation) relatively easy in the other parts of world where as a established business portfolio plays a vital role in Bangladesh. The situation will be slightly different in Europe. Although similar barriers will exist in Bangladesh , the key to this market will be product differentiation. Companies that can produce materials that look and feel more like wood will be able to enter and maintain a presence in the market more easily that companies manufacturing existing WPC materials and products. Internal industry rivalry The next consideration in the analysis of the competitive industry structure was the intensity of rivalry amongst existing competitors. These were analyzed in accordance with Porter’s structural factors which contribute to rivalry, as detailed below: • Numerous or equally balanced competitors – a review of the current WPC market suggests that the market is dominated by a relatively small number of medium sized, well-established companies which are making fiber wood faced with melamine paper, imported MDF. There are a significant number of small companies offering high-value, low- volume niche products • Industry growth – this was not considered to be a driver of rivalry. In the USA, annual growth rates are expected to continue in the medium term (discussed elsewhere). Bangladesh market is expected to follow suit although not necessarily with the same mix of products and applications. • High fixed or storage costs – fixed costs are likely to be moderate to high. Premises and plant requirements could be significant, as the high fixed cost operations will have to be undertaken in-house. • Lack of differentiation or switching costs – there was no evidence of concrete reasons for customers to remain with particular suppliers. • Diverse competitors – currently, there is little differentiation between products in the USA as there is a big enough market to accommodate all of the key players. This situation is likely to change as the market becomes more saturated and products will be targeted at different sectors of the market • High exit barriers – the only general considerations, in terms of exit barriers within the industry, would apply to labor contracts, ongoing support contracts and divestment of plant and equipment. These are not considered to be especially significant. These considerations, taken together, indicate that the threat from the internal industry rivalry would be low to moderate. The WPC market in the USA is experiencing significant growth and the European market is expected to follow suit. Any significant degree of rivalry is unlikely to develop in Bangladesh in the short to medium term. The threat of substitute products or services The next analysis considered is the threat from substitute products or services. WPCs compete directly with PVC-U (in windows) and timber (in windows, doors, flooring, furniture decking, fencing, etc) and is seen by many as a direct threat to these, more traditional, materials. In Europe in particular, the consumer preference for timber may be difficult to overcome unless suitable WPC products that look and feel more like wood are available but which offer significant advantages over wood (as has been discussed elsewhere in this report). Overall, the threat from substitute products or services was considered to be moderate. The bargaining power of customers

The circumstances for the development of buyer power were also considered: • The buyer purchases large volumes relative to seller sales or is more concentrated than the industry it buys from – this is true of the market around the world where some large purchasers will have strategic significance for the major suppliers e.g. Home Depot and Lowe’s, stores that dominate the US home improvement market. • The products of the industry represent a significant fraction of the buyer’s costs – this is not the case in any of the end-markets for WPCs. These products represent only a fraction of the overall markets. • The products of the industry are standard or undifferentiated – as was already discussed in the ‘industry rivalry’ section previously, the review of competitors revealed little differentiation amongst existing products, although this is likely to change in the future. • The buyer faces few switching costs – the costs involved in switching from one WPC product to another will be low. Costs are likely to be incurred when a buyer switches from a competing material (e.g. wood or plastic) to WPC. This is discussed in detail in the Market Barriers section of the report. • The buyer earns low profits – The margins on WPC products are attractive at the moment across the supply chain. • The buyer poses a credible threat of backward integration – this was not considered to be a significant risk – there are no strategic reasons for the end-users to consider manufacturing WPC products. • The industry’s products are unimportant to the quality of the buyer’s products or services – this is less of a threat in the USA at the moment than it is likely to be in the UK and rest of Europe. As discussed previously, the US consumers’ level of sophistication is not high when it comes to understanding the differences between the range of WPC materials and products. European consumers are more sophisticated with high expectations in terms of product performance and aesthetics and a bad experience with a lesser quality product could cause damage to the buyer’s reputation, if not the market as a whole. • It has full information – price and specification information for WPC materials and products is available from the suppliers and in the public domain. These points, taken together, indicated that the bargaining power of customers could be moderate to high, particularly if the buyer is large and of strategic importance to the industry (e.g. the large home improvement centres in the USA). However, as has also been highlighted elsewhere in this report these buyers respond to the demands of their customers. Making the general public and materials specifiers aware of the advantages of WPC materials could help to increase the demand meaning that these products would become more important to the buyers’ products and services. This would ultimately reduce the power of this group. The bargaining power of suppliers Porter defines a number of considerations for the development of power by a supplier to the industry, which were used to guide this part of the analysis: • It is dominated by a few companies, or is more concentrated than the industry it sells to – this depends on the raw materials being used to manufacture the products. Where recycled plastics are required, there are a limited number producing recyclate of a suitable quality for the manufacture of WPCs. This is true of both the USA and Europe and puts suppliers in a powerful position. If virgin polymer is being used, there are numerous suppliers and no evidence of concentration. Wood fiber and flour is readily available in Bangladesh as a result of the substantial timber industry. The security of supply is likely to be more of an issue in Europe where there are fewer suppliers. This will put them in a more powerful position. • The industry is not an important customer of the supplier group – to an extent, this will depend on the raw materials being used. Where recycled polymers are used, the WPC industry could become a very important customer as it will require significant volumes of material. Where virgin polymer is used, the volumes are likely to be small in comparison to other plastics processors. • The supplier’s product is an important input to the buyer’s business – this is true. Raw material

specifications can have a significant impact on the quality of WPC products and so are very important. • The supplier’s product is differentiated or they have built up switching costs – the reverse will be true in this case. As long as the WPC manufacturers can ensure consistent quality of raw materials and security of supply there is little to differentiate suppliers’ products. The costs involved in switching from one supplier to another are unlikely to be high. • The supplier poses a credible threat of forward integration – it is unlikely that mechanical Recyclers, polymer suppliers or wood flour / fiber suppliers will move into the manufacture of WPCs. The power of suppliers, overall, was considered to be low. In summary, there are low to moderate levels of competitive pressure in the WPC industry with a key barrier being the relatively high levels of capital that are required to start up a WPC manufacturing operation. In addition, companies operating in this industry could experience a degree of pressure from larger buyers (e.g. Furniture & Furnishing Shops like Hatil, Otobi, Interior Designers, Aluminum Profile & Glass Shops, Doors and Floor Tiles Shops) who will be of strategic importance in terms of a route to market for wood plastic composite products. Nonetheless, if the WPC industry grows as quickly as is it predicted to by a number of the participants in this survey then it will provide many attractive opportunities for companies looking to develop new products or to move into new markets, as well as for companies setting up new manufacturing facilities. Marketing of WPCs As a guide to the marketing of WPC products, it is useful to consider the ‘4Ps’ of the marketing mix, namely product, price, place (distribution) and promotion. Each factor can be controlled to ensure customer satisfaction in the target market. Some of these elements have been discussed in detail in other parts of this report and, in such cases, important summary points will be presented here. By necessity, this analysis is quite general and provides an overview of the marketing of WPC products as detailed marketing plans will have been developed by individual companies based on product portfolio, overall corporate strategy, target markets, etc. Where appropriate, examples of particular techniques or strategies are given. Product When considering the product(s), it is important to take into account a number of factors such as functionality, appearance, quality, brand, warranty and any additional service/support provision43. A number of key factors are discussed in more detail below. In almost every case, and for each WPC product group, (e.g. decking, flooring, lumber, board, profiles, fencing, windows) the products are marketed in terms of improved functionality – better mechanical properties than more traditional materials - and the fact that they require little or no maintenance when compared to competing products manufactured from wood. Both of these aspects have been discussed in more detail in the WPC Applications and Markets and the Materials Characterization sections of this report. These are the Unique Selling Points (USP) of all of the products that are currently available on the market and it is a message that manufacturers make a lot of effort to get across. In addition, a number of WPC products are manufactured using recycled materials and can subsequently be recycled at the end of their life. In this case, companies promote the good environmental credentials of their products. This, however, can also be a market barrier as was discussed in the Market Barriers and Issues to be Addressed section of the report. The appearance of these products is likely to be an issue in Bangladesh (see Market Barriers and Issues to be addressed). Many of those interviewed during this study have noted that, although WPCs are, in many ways, superior to comparative wood products, they do have a number of disadvantages. Again, these are discussed in detail in the Materials Characterization section of the report. Brand awareness is something that will need to be given careful consideration to ensure that the situation that currently exists in other parts of world does not also arise in Bangladesh. At the moment, Worldwide consumers tend not to differentiate between different brands of

WPC products, which has resulted in what is termed ‘the Xerox effect’; that is to say, in general, photocopiers are referred to as Xerox machines regardless of the manufacturer. Similarly, WPC decks are often referred to as Trex decks worldwide whether or not they have been manufactured by Trex. It will be important for companies to develop a strong brand image. As an example in the UK, ‘Knotwood’ WPC decking manufactured by Plastics Reclamation Ltd. could be easily confused with ‘Notwood’, a range of garden and outdoor products made from recycled polystyrene. Price Pricing decisions should consider profit margins and the response by competitor to action on price. Pricing should also consider other factors such as discounts and financing. Potential price points for a range of WPC products have been elaborated in the Market Analysis and Materials Characterization sections of this report. There are, however, some key points to note:

• Wood plastic composite materials are generally comparable on price with premium wood products • Worldwide, currently, margins on key WPC products, such as decking, moulding and trims, fencing

and windows are attractive so there is little price competition • As the market becomes more saturated and manufacturing technologies improve (reducing costs),

prices will start to fall • Ultimately, there will be a variety of price points for different grades of product in each application.

It is likely that the Bangladesh market will develop in a similar manner with attractive margins possible across the supply chain as the industry develops and becomes established. In the longer term (10 years), consumer demands, market forces and technology developments will result in prices coming down. Place (distribution) Place refers to the decisions that have to be made with regard to the process of distribution utilized to getting the product to the target customers. Decisions on distribution relate to factors including market coverage, channel member selection, logistics and service levels. Distribution options are discussed in more detail in the following section of the report but there are some key points to note:

• There isn’t a typical WPC distribution process. The strategy adopted by an organization will be very dependent on the overall corporate strategy, access to distribution channels and target market sectors

• Wholesalers are a key part of the WPC supply chain in worldwide as they provide a market access mechanism for small manufacturers that would otherwise be unable to deal directly with large end-users. This is likely to be the case in Europe as well

• The development of distribution agreements with potential high-users of WPC products will be another important mechanism in the development of the market in Europe.

Promotion The promotional strategy for WPC products will deal with communication and sale to potential consumers which, in this case, could include wholesalers, building contractors, window installers, landscape gardeners, interior designers, i.e. business to business, as well as to the general public. Research by Freedonia has identified two key elements to the promotional strategies employed by manufacturers of WPC products in the USA and Worldwide, where the market is now well established.

• A media element, focused on relevant trade journals and magazines, home and garden publications, newspapers, the Internet and television

• A relationship element, focusing on developing and maintaining relationships with key clients.

Freedonia also reports that a technique employed by several of the larger manufacturers in their relationship marketing strategies is the provision of incentive programs such as:

• Display materials for house builders who include WPC products in show homes • Targeting major national and regional house builders to encourage use of WPC products (especially

decking) as standard in new developments • Training related to installation and sale of WPC products • ‘Frequent Builder Programs’ that offer builders and installers the opportunity to earn points for a

specified amount of product sold and can later be exchanged for gifts or trips A number of manufacturers of WPC products also manufacture traditional building products and use the marketing of these traditional products to provide market leverage for the newer products. Smaller companies that do not have the resources to finance such comprehensive marketing strategies tend to employ market-focused sales specialists to market their products to potential customers. As has been highlighted previously, Bangladesh WPC market is, at best, embryonic and it is unrealistic to expect companies to embark on such extensive promotional strategies, especially as costs can be significant. There is, however, evidence of a number of companies starting to employ public relations techniques to promote their activities. It is worth noting that much of the current promotional activity in Bangladesh is focused at the trade and/or technical level. Both Nielson and Benchmark have highlighted that the Bangladesh consumer will also have a key role to play in the development of the market. Certain groups of consumers are likely to research a product and make an effort to find out about the advantages and disadvantages of competing products before making a purchase. As a result, these companies believe that key promotional activities in Bangladesh should be focusing on the general public to highlight to them the existence of WPC products (whether it is decking, flooring, furniture, lumber, board, fencing, windows or doors). Consumers (both individuals and organizations) can be characterized depending on their readiness to adopt new products. The process of product adoption can be presented in the form of a bell-shaped diffusion curve as shown in Figure below.

Innovators and Early Adopters are the consumers most likely to try a new and unproven product and may be the early proponents of WPC products in Bangladesh market. There is, however, a word of caution. These early adoption groups will form a test ground for these new products and materials and will make recommendations to the other groups of consumers who are more risk averse and are unlikely to adopt a product until it has become more commonplace. It is vital, therefore, that these innovators and early adopters have a positive experience with WPCs. If the products do not live up to expectations, do not meet performance requirements or are not of an appropriate quality then this negative experience will be relayed to the other consumer groups. This could delay the development of the WPC market as significant effort would have to be put in to rectify the negative impact. Indeed, it could stall market development all together. Another promotional technique that is used extensively is exhibiting at trade shows. In the USA, a number of companies have used the International Builders’ Show to introduce new WPC flooring, profile, lumber, board, doors, windows, and furniture products and railings systems as well as to maintain their market presence. Professor Paul Smith of Pennsylvania State University has investigated the effectiveness of trade shows as a marketing tool and has indicated that they are an excellent means of introducing a new product to as wide a range of people as possible and will be particularly relevant to the evolving WPC market in Bangladesh. Distribution Processes A recent report by Nielson Bangladesh suggests that distribution of any wood products and wood replacement product such as WPC goods in Bangladesh is conducted through contractors, timber yards, home improvement centers and distributors of building products. Many WPC producers are small and medium sized companies that find it difficult to sustain larger internal networks of distribution with their limited resources. To combat this, strategies are adopted that include third-party distributors and wholesalers. Indeed, the wholesaler is key to the WPC distribution process and resells WPC products to the retailer and final. Furthermore, WPC building products are often sold to timber yards that conduct their business predominantly with building contractors. This strategy

aims to encourage building contractors to use WPC materials in their new developments. Some of the larger worldwide manufacturers of WPC flooring have distribution agreements with the main ceramic tiles retailers. Nielson also reports that WPC products, such as park benches and other outdoor items, are distributed directly to the consumer or via the process of government bidding. What is clear is that there is not a ‘typical’ distribution process for any particular type of WPC product. The distribution strategy chosen is very much dependent on the companies’ overall corporate strategies, access to distribution networks and target market. Figure below shows an example of how products might be distributed – from inbound materials to the end user. This is based on discussions about the US distribution process but will be just as relevant to the Bangladesh Market.

It is difficult to predict exactly how the distribution network for WPC products will develop in Bangladesh but, certainly for outdoor products such as decking, fencing, railings and outdoor furniture, it is likely that it will be similar to that noted in worldwide market. As has been discussed previously, there are a number of reasons why it might be difficult for smaller companies to move into the WPC window profiles market especially in terms of the start- up costs involved. Initially, it is likely to be larger companies that make in-roads into this market, i.e. those that are already well established in the manufacture of wood and plastic window profiles. These companies will already have distribution strategies and well developed networks of distributors in place and will be able to exploit these as a route to market for the new,

alternative materials. Production of Wood Plastic Composites Materials Handling / Formulation The material handling system starts with raw materials and ends with blending the materials in processing equipment, such as an extruder. The material handling system has various components such as receiving and storage, size reduction and drying. Wood Drying The moisture content of wood will have a significant effect on the processing and final product quality of wood plastic composites. Although in some cases moisture can be removed as part of the processing where additional drying equipment is required, some of the methods available are66:

• Preheaters – problems with feeding and actual moisture removal • High intensity mixers – expensive • Hot air dryers – fire potential if not designed properly • Rotary tube furnace – most suitable

Processing The processes that can be used in the manufacture WPC products are compounding, extrusion, injection molding and pultrusion. There is no right or wrong process to use in the manufacture of WPCs and there is no specific process that should be used to manufacture a specific product. Essentially any process can be used to manufacture any product - and the process selected can be down to something as trivial as personal preference. Some companies have developed their own process (in Bangladesh, for example, TimbaPlus has developed an entire WPC manufacturing line from wood drying through to final product take off based on local available materials feed stock) whilst other organizations are looking at the purchase of a license and a turnkey installation. Each of the processes that can be used are described in more detail below. Compounding Compounding is the first stage of the wood plastic composite manufacturing process. In this process the filler and additives are dispersed in the molten polymer to produce a homogeneous blend. Many options are available for compounding, using either batch (e.g. internal and thermo kinetic mixers) or continuous mixers (e.g. extruders, kneaders). The advantage of batch systems is that processing parameters (e.g. residence time, shear and temperature) are easier to control. The continuous compounding systems however do not have the problem of differences in “batch to batch” quality.

A compounding extruder is generally used to compound the wood plastic composite. The raw materials can either be introduced into the extruder simultaneously or the wood fiber added tothe molten plastic. In order to remove moisture from the blend a section of the extruder is placed under vacuum85. The compounded material can either be immediately formed into an end product or made into pellets for future processing. A typical turnkey pellet compounding line may have a capacity of 4500-9000 kg/hr. A number of companies now produce wood composite pellets for processors who do not want to blend their own material. The pellets can be made with an exact fiber content required for a particular application. Alternatively, highly wood filled plastic compounds can be combined with standard resins. The advantage of purchasing compounds is that the initial capital investment in equipment is lower as only a single screw extruder would be required rather than a compounding extruder. On the other hand if large volumes of compounded pellets are required it may be more economically feasible to compound in-house. Extrusion The manufacturing process for a wood plastic composite comprises the following stages

• Raw material preparation • Compounding • Profile extrusion • Tooling • Cooling • Finishing

In order to produce a wood plastic composite the extrusion process is required to first melt the polymer then mix the molten polymer with the wood fiber such that a homogeneous melt is achieved. Any remaining moisture can then be removed by vacuum venting. The extruder then compresses the blend to pass through the die. The extrusion process should result in a homogenous blend or the wood and plastic. The processing should not be detrimental to the wood fiber. There are various extrusion configurations; some of these are detailed below: Single Screw Extruder (Profile Extrusion) 86 This is a standard plastics processing technique, which can be summarized as follows:

Material format: Fibre filled polymer pellets Material preparation: None Moisture removal: In-line dryer on Hopper

Material Feed Method: Gravity hopper Configuration: 24:1 or 30:1 (L: D) single screw

Melting / Mixing Mechanism:

Barrel heat and screw shear

Advantages

• Proven technology • Lowest machine cost

Disadvantages:

• Poor mixing characteristics • High raw material costs • Lower output rates • Drying system required • Polymer is melted with the fibre – greater risk of burning the fibre, more difficult to vent

etc. • High screw rpm – greater risk of burning • Inability to keep melt temperature low with higher head pressures

Co-Rotating Twin Screw Extruder (Compounding and Profile)86 This system is commonly used for compounding and manufacturing of profiles for high output applications. A disadvantage of this system is that its high shear means that it is harder to control than the counter rotating system. Counter Rotating Twin Screw Extrusion (Compounding and Profile)86 This system is more commonly used for producing the final wood composite profile and tends to be used for window profiles. This system is capable of generating the high pressure required for profile extrusion, has a shorter residence time and a narrow residence time distribution, which is why it is suited to manufacture of PVC windows.

Material format: Fibre and polymer in same particle size, usually 40 mesh. Material preparation: Dry fibres in rotary tube furnace, Hammer-mill polyolefins,

high intensity blend with polymer and additives Moisture removal: Vacuum vent in extruder

Material Feed Method: Volume crammer feeder/ Starvation fed polymer Configuration: Parallel or conical, counter rotating twin screw

Melting / Mixing Mechanism: Barrel heat, screw mixing and shear heating The design of the parallel and conical counter rotating twin screws is shown below:

Figure Conical and Parallel Twin Screws for Profile Extrusion. Advantages:

• Proven technology • Low rpm, low shear

Disadvantages:

• Drying system required • Size reduction system may be necessary • Blending system required • Material transportation – difficult to keep mix ratio the same, may require additional pelletizing

operation • Additional floor space required • Higher operational costs – power, labour, maintenance • Polymer is melted with the fibre – greater risk of burning the fibre, more difficult to vent etc.

Conical Twin Screw Extrusion Cincinnati Extrusion, a manufacturer of WPC processing equipment, state that conical twin screw extruders are the superior design for fibre extrusion for several reasons:

• Minimal floor space requirements for a given output range • Robust gears with generously dimensioned thrust bearings make conical extruders ideal for high

pressures e.g. in high performance extrusion of profiles with small cross sections.

• Wide processing range and can cope with different output requirements and variations in the raw material properties better than parallel machines.

• The large screw diameters in the feed section and the increasing compression along the screws’ taper make conical machines very well suited for materials with low apparent density such as wood fiber.

• The screws’ slimness in the metering section means that the shear stress on the material is minimized. This has a particular advantage of keeping the wood fibre intact

• The metering section residence times under conditions of identical output also favour the conical extruder where the melt passes the high temperature zone twice as fast. This prevents darkening of the wood composites extruded at the necessary high mass temperature to plasticize the polymer.

• Output rates, 92mm: 500-800 kg/hr, 86mm: 200-500 kg/hr, 80mm, 150-400 kg/hr Co-rotating Twin Screw Extrusion and Hot Melt Single Screw Extrusion (Inline Processing) Figure of Co-Rotating TS and Hot Melt SS Fiber Composite System. The key points of this technology can be summarized as follows: Advantages:

• Able to process fiber with higher moisture content (up to 8% moisture) • Good mixing of polymer and fiber • Eliminates cost of drying and blending operations

Disadvantages: • Many peripheral feeding systems required, higher costs • High screw rpm and no screw cooling – greater risk of burning especially at screw tips • Inability to keep melt temperature low with higher head pressures – large diameter “Hot Melt”

single screw required to try and reduce melt temperature override • Polymer is still melted with the fibre – greater risk of burning the fibre, more difficult to vent, etc.

Pultrusion

The pultrusion process produces a profile by pulling material through a stationary die. The entrance section is tapered to the size of the final dimension of the profile, the raw material then enters the constant geometry section where the polymer is melted. The blend then passes through a cooling section where the thermoplastic polymer hardens. The main requirement of a pultrusion process is that the blend is capable of flowing through the die so that a consistent product is produced. A schematic of a wood based pultrusion system is shown in Figure below,

Injection Molding Injection molding differs from profile extrusion in that after the material is heated, it is pumped into a closed mold, where it takes shape and cools. The mold is then opened and the finished part discharged as shown in Figure below

Raw Material Requirements88

• Maximum 0.5% moisture content • Size equivalent to polymer granule • Good homogeneity

Processing Requirements include88

• High plastification rate • Short residence time

• Small melt temperature range 170-190°C

Tooling, Cooling & Finishing There are a number of additional issues that should be considered when processing wood plastic composite materials specifically relating to tooling requirements and to cooling and finishing of the final product. For example, the choice of die material is important as it needs to be resistant to the slightly acidic wood.89 Breaker and stranding plates can be used to increase melt pressure however it is important to note that extruder throughput will decrease. An alternative is to have a large compression ratio (i.e. greater than 3:1). The Economics of WPC Manufacture It has been stated throughout the technology section of this report that there is no such thing as a typical WPC feedstock that should be used to manufacture a specific WPC product, there is no right or wrong process to use and there is no specific process that should be used to manufacture a specific product. There is a wide range of factors that need to be taken into account and include: • The availability and cost of raw materials (polymer, wood and additives) • Whether or not to use recycled materials • Whether to compound in-house or to buy in pre-compounded pellets • The end use of the product (decking, fencing, door profiles, etc) • The product performance requirements • What processing equipment a potential manufacturer currently owns • The technology / manufacturing background or expertise of the company • Whether or not to purchase a license and a turnkey installation and, if so, which one As a result, there are too many variables to allow exact costs for a WPC manufacturing process to be stated. These must be examined on a company-by-company basis prior to any decision being made on whether or not to enter the WPC market. The following information does, however, provide some guidance on typical manufacturing costs based on current Bangladesh prices. The figures quoted are taken from a number of earlier sections of this report, unless otherwise stated. The principal raw materials required are: • Virgin Polymer o LDPE (BDT 105000.00/ton) o HDPE (BDT 110000.00/ton) o PVC (BDT 65000.00/ton) o PP (BDT62000.00/ton) • Recyclate (costs are directly affected by the cost of virgin polymer) o LDPE (BDT 20,000.0 – BDT 22,000.00/ton of clean uncontaminated baled) o HDPE BDT 20,000.0 – BDT 22,000.00/ton of clean uncontaminated baled) • Wood o Sawdust BDT8500_9500/ton)

o Hay/Jute Particle (BDT 10,000/ton) Unless compounded WPC pellets are being used which will have a predetermined formulation, the feedstock formulation can vary significantly in terms of the percentage and type of wood filler used; the polymer resin used and whether it is 100% virgin material or includes a proportion of recyclate. Consideration must also be given to what additives will be required. This will also have an impact on costs. Recent discussions with potential manufacturers of WPCs have indicated that, currently, WPC raw material costs alone range between BDT11 – BDT14. Based on virgin polymer and wood flour. Material cost savings could be made by considering, for example, recycled plastic and wood fiber in another format. The manufacture of WPCs is a step-by-step process from raw materials to final end product. The stages of the process, based on an extrusion technique, and associated costs are as follows: • Raw materials handling (sizing, drying) o Polymer BDT 40 lacs o Wood BDT 10 lacs • Formulation / blending BDT 10 lacs • Processing BDT 15 lacs • Tooling / dies BDT 10 lcas • Cooling BDT 10 lacs • Finishing BDT 10 lacs This gives a total of BDT 105 lacs This assumes, however, that all of the equipment has yet to be purchased Baled LDPE recycled film is a relatively low cost material but will require further processing (e.g. shredding or grinding), hence initial capital expenditure will be required for equipment to cover the first two steps of the process. Costs will also be different if other processing techniques, for example injection molding, are used. These examples re-iterate the need for costs to be examined on a company-by-company basis. Actual processing costs will be very company specific and will be directly influenced by factors such as company overheads, fixed and direct costs and the impact of formulation and application on production rates (window profiles will be slower than decking, higher wood contents result in faster output rates, etc.). A typical example of the costs of manufacturing a product such as flooring or floor tiles is shown below. These data refer, however, to manufacturing in the Thailand where the cost structure will be not so different to that in the Bangladesh and the rest of South Asia. They give, however, an indication of the processing parameters that will allow WPC production to be economically feasible. Raw Material Formulation: • 55% wood, 34% HDPE recyclate • 3% EBS/ZnST lubricant, 8% other additives Processing Details:

86mm conical extruder at an output rate of 350 kg/hr or 100 metres/hr Total Selling Price = BDT 343.75 per meter or BDT 100 per kg. Davis-Standard recommends that, for a WPC production line to be economically feasible, the costs must not exceed BDT 88000.00 per ton of end product. Using the raw material costs quoted above, this will not be achieved in the Local market at the moment. Consideration should also be given to the costs involved in the transport of raw materials, which will depend on the material format (e.g. the transportation of plastic film is less efficient than the transportation of pellet) and of the end product itself. The costs involved in the distribution and marketing of the product will also have to be taken into account. Bangladesh WPC market is embryonic and, as a result, there is little in the way of direct costs for WPC products or their comparison to competing materials. In the USA, however, WPCs are valued at approximately BDT 120000.00/ton at least, although this will obviously vary depending on the factors outline above. This allows these materials to compete at the mid-price range of their target markets. In Bangladesh and the rest of Asia, raw material costs are based on recycled polymer and wood flour and, as a result, are low in price. This means that the products will be closer to the high end of the market but with attractive price. That said, however, developments in WPC processing mean that foamed composites, for example, are technically feasible, which require less input material, thus reducing costs. Project Location: Total land area of 3.5 Kani for both PVC Foamed Board , Profile and Flooring Making Plant and necessary storage. The total land area will be 864X 70= 60480 square feet beside Salima Quader College at Ranguniya in Chittagong having acess with main hihway and natural waterbody. The location has been selected for its unique position by which Green Wood Products will enjoy abundance of tree trimmings, fire wood, hay, bamboo in plenty as virgin wood to feed into the system as raw materials. Beside as it is not very much far from Kalurghat Chittagong from where the waste plastics will come from different industrial plastic left overs and also from different small plastic recyclers who make plastic granuels from used plastic bottles, PVC and other plastics.

(above is layout )

Quotation

Machine name Q'ty

1. WPCskinned foam sheet extrusion line 1set

2. DYPS560 Crusher 1set

3. 300/600 COOL /HOT MIXER 1set

4. 100 Grinder 1set

Quotation 440,000.00USD

WPC skinned foam board high speed extrusion machine I. Includes：

1、 SJSZ80/156conical double-screw extruder 2、 WPC1220 wood powder plastic foam board die 3、 YFD1220 vacuum cooling calibrating table 4、 BF-1220cooling frame 5、 YF1220haul-off unit 6、 YFQ1220cutting machine 7、 YF1220 transferring machine and stacker

II .Parameters : 1) .80/156CONICAL DOUBLE-SCREW EXTRUDER

A extruding system 1、 Screw diameter：∮80/156(Zhoushan) 2、 Max.output：350Kg/H-450kg/h 3、 Screw structure is special for PVC powder, rotate in opposite direction .screw material： 38CrMoAlA

Nitrogen quenched thickness 0.5—0.7mm，rigidity HV940 4、 Barrel heating system ： Aluminum heater stainless steel cover 5、 Cooling way： fan forced cooling，4-250W/set 6、 Heating area： 5areas，heating power 46KW， B feeding system 1、 adopt stainless steel hopper 2、 Motor power：2.2KW 3、 Speed control way frequency C、vacuum exhausting system 1、vacuum pump power：2.2KW 2、degree of vacuum ：0—0、7Pa D、drive system 1、adopt high torque reducer, low noise, long service life(jiangsu jiangyin ) 2、Reducer gear material is 20CrMoTi. 3、distributor: through gear, single gear torque turns into double gear torque output

E、main motor system 1、main motor power：75KW 2、motor speed control way:direct currency control F、electric control system 1、special design electric cabinet 2、ZHENGTAI low voltage electric parts

3、intelligentized temperature control 2) WPC1220×20WPC FOAM BOARD DIE

1、specification：1220×30mm 2、mould material：3Cr13 3、heating way：heating pipe inisde 4、structure：clothes rack style 5、mould opening way：by pneumatic 6、cylinder diameter：160mm 7、forming mould number：4zones 8、oil heat mould temperature machine：1set 3) YFD vacuum cooling calibrating table

1、 Material is stainless steel 2、 Table length：4000mm 3、 Table width：2000mm 4、 nozzles：80pcs，at the both sides of table 5、 Front-and back moving device with motor 6、 Cooling water:16m³/hour 4) BF-1220 cooling frame 1、 Roller ：stainless steel 2、 Roller diameter：63mm

3、 Frame length：4meter 4、 Cutting knives：alloy blade 5) YF-1220haul-off unit 1、 Roller diameter：220mm 2、 Effective clamping：1500mm 3、 Roller number：4pairs 4、 Clamping way：by pneumatic 5、 Driving motor：7.5Kw 6、 Diving way：mechanism drive 7、 Protection film device: choose

6) YFQ1220cutting machine 1、 Cutting Motor power：2.2Kw 2、 Max. Cutting width：1500mm 3、 Sucking motor power：2.2Kw 4、 Cutting saw：good alloy，saw diameter：350mm 5、 Cutting table moving and cutting way：pneumatic 6、 Cutting way：by hand or automatically 7、 Metering ：by switch 8、 Work pressure：0.5-0.7Mpa 7) YF1220tranferring machine Motor ：1.5Kw(Shandong kaiyuan motor) Machine width ：1300mm Machine length ：2500mm

※、Advance prepare （electric wire /crushing machine /mixer /tool ）：

1、electric power：200Kw 2、water ：12m³/hour 3、air ：0.4-0.8Mpa 4、workers : 10 persons at most 。 5、workplace :25meter (length)X10m (width)X5m(height)

Ⅴ. Delivery time and Payment

Production period: within 50 days after the 40% advance payment reach Seller

Payment: Buyer must send the advance payment (40% of total value), remained 60% must reach the Seller after

debugging and before delivery

Ⅵ.Technology and service

1. Seller supply full set of technical document (written in English).

2. Seller supply training for buyer’s staff until buyer can produce the eligible production independently.

3. Seller is responsible for installing, testing, adjusting and debugging the machines if buyer specifies it in

the contract

4. Buyer should pay the expense for 2-3 engineers including round-way tickets, inland traffic, lodging and

boarding fee and payment of 50 USD per day when the machine is installed, tested and maintained.

5. Seller will go to install machines after the machine is arrived at buyer and buyer will have prepared all

conditions (including power, water, compress air, tools and materials for producing pipe, etc) for

installing and testing these machines

6. When installing，people of both sides cooperate well and carefully，buyer supplies convenient working

condition，any problem, should discuss peaceful and kindly.

7. Buyer supplies proper working tools, equipments and other conditions

8. Guarantee for one year, not cover for rough and handle and wrong operation.

Electric part for 6 months and mechanical part for 12 months

9, The cost of trial material should be paid by buyer.

The list of Auxiliary :

11、辅助设备 Auxiliary equipment 1).300/600热/冷混合机组300/600 mixer

设备运行条件

电力条件/Electric voltage condition：AC380V±10% 50Hz 3P+E 压缩空气/ Compressed air：0.4～0.6Mpa G.（DP≤10℃） 冷却水/Cool off water： ≤15℃ 0.3～0.4Mpa 90L/min

生产能力

output: 400-500Kg/h

技术参数

1、 热混总容积Total capacity of hot mixing： 300L

2、 热混有效容积Effective capacity of hot mixing： 225L

3、 每次投料量Materials input： ≤100Kg/once

4、 混合时间mixing time： 6～10minters

5、 热混锅钢板厚度hot mixing Thickness： 锅壁/wall:6mm，锅底/bottom:8mm

6、 锅体材料Material of hot mixing pot： SUS304 1Cr18Ni9Ti

7、 锅体内壁处理Inside the wall handle： 采用精度抛光处理Adopting the accuracy

throws a light processing

8、 热混搅拌浆形式Mixing paddle： 3set三层式，做动静平衡试验

9、 桨叶材料Material of paddle： 不锈钢整体铸造结构/ SUS304 1Cr18Ni9Ti

10、 热混搅拌浆转速Rotation speed of mixing paddle：475 /950 r/min

11、 热混电机功率Power： 55KW

12、 加热方法heating method： 自摩擦/self-friction

13、 温控方式Temperature contre type： RKC温控表控制/RKC Thermometer

14、 锅盖及放料三通Material of pot cover： 采用铝合金铸件The aluminum metal alloy casts

15、 锅盖开启控制pot cover star&stop contre： 气动控制aircontre

16、 放料方式putout contre： 气动阀放料aircontre

17、 冷混总容积Total capacity of cold mixing： 600L

18、 冷混有效容积Effective capacity of cold mixing： 450L

19、 冷混锅钢板厚度cold mixing Thickness： 6mm

20、 锅体材料Material of cold mixing pot： SUS304 1Cr18Ni9Ti

21、 锅体内壁处理Inside the wall handle： 采用精度抛光处理

Adopting the accuracy throws a light

processing

22、 冷混电机功率cold pot power： 11KW

23、 冷混搅拌浆转速Rotation speed of mixing paddle： ≤70 r/min

24、 桨叶材料Material of paddle： 不锈钢整体铸造结构SUS304 1Cr18Ni9Ti

25、 冷却方式cooling type： 水冷却water

26、 冷却时间cooling time： ≤8分钟/minters

27、 冷却混合机内冷却环采用2mm不锈钢制作，可承受1.5Kg水压

28、 锅盖及放料三通Material of pot cover： 采用铝合金铸件The aluminum metal alloy casts

29、 锅盖开启控制pot cover star&stop contre： 气动控制aircontre

30、 放料方式putout contre： 气动阀放料aircontre 4).DYPS560 Crusher 破碎机

1）入料口径：560*400MM

Dimension of feeding mouth: 560*400MM 2）刀片排列：V型设计。

Arrangement of blade: V type 3）刀片数量：8把（定刀2把，动刀6把）。

Number of blade: 8 pieces( static blade 2 piece, rotary blade 6 pieces) 4）刀片材料：SKD11

Material of balde: SKD11 5）轴 承：NSK。

Bearing: NSK 6）转子数：3片式。

Structure of rotary unit: 3 pieces 7）转子直径：400MM。

Rotary unit diameter 8）破碎产量：200-300KG。

Output: 200-300KG

9）箱体钢板材料：不锈钢 Material of steel: stainless steel

10)箱体钢板厚度：25mm。 Thickness of steel: 25mm

11)电机功率：15KW。 Motor power: 15w

电机品牌： 国产名品牌

Motor brand Chinese brand

控制电器： 西门子品牌 Electric control components SIEMENS 4、 出料颗粒：8MM

Pelletizer: 8mm 5、 下料方式：储料箱。

Collecting method: storage 6、 机器外型尺寸：1700*1550*1800MM

Dimension of crusher: 1700*1550*1800MM 5).100磨粉机Grounder

1)Crushing capacity 100~150Kg/h

2)工作电压： 380V，50HZ

3)Voltage 380V，50HZ

4)电机功率： 30 KW

5)Motor power 30 KW

Price: CFR Chittagong Bangladesh US $ 440,000.00 (The Price Includes supervision of Erection of Plant, Initial Design Drawing, Training by Chinese Engineers and also test run & trial) SJSZ65/132WPC profile extrusion line (PVC/PE) I. 65/132 conical twin-screw extruder

A Extruding system Screw diameter：∮65/132 Output max.：180-200Kg/H。（technology from taiwan, made in zhoushan） Screw is designed for PVC, by cone-shape mesh,rotate incongruously。 Screw and barrel material : 38CrMoAlAnitrogen quenched，with thickness 0.5—0.7mm，rigidity is HV940 Barrel heatingsystem Al-casted heater+stainless cover.（made in jiangsu yancheng） Cooling way: forced cooling by fan Heating zones: 5zones, heating power20KW， B material feeding system Stainless steel hopper Feeding motor：0.75KW Speed control：by inverter C、vacuum exhaust system 1、vacuum pump：2.2KW 2、vacuum degree：0—0、7Pa D、driving system high torque reducer, low noise, long service life. Reducer gear is made of 20CrMoTi，helical gear mesh 3、distributor: single torque output becomes into double torque output by bevel gear . E、main motor system 1、main notor power：37KW

2、speed control way:AC inverter F、electric parts 1、special design electric cabinet 2、Chint low voltage electrics 3、intelligent temperature controller II、YF series calibration stable

Guide rail for mold width：360mm Calibration table effective length:4000mm Water inlet and water outlet for mold ：50nozzles Calibration table moving range front to back：700mm Forming mold lifting range:70mm Calibration table left-and right range：70mm Vacuum pump power：4Kw、1 set, water pump power:5kw 1set The part of cablibration table is made by stainless steel Max.vacuum :0.08Mpa III.Double-caterpillar Haul-off unit

Motor : 0.75kwx2sets by inverter Caterpillar: 2 pieces, rubber block, up and down clamping, effective length is 1100mm Reducer: 1 set Worm gear and worm reducer drive :2sets Haul-off unit center height：1000mm IV .cutter 1、cutting motor：1.5Kw 2、cutting width：300mm 3、cutting height：80mm 4、working way：by hand or automatically 5、clamping, moving, cutting: by peumatic V、stacker

Effective length :4000mm VI、electric control system adopts famous brand, and intelligent digital instrument.

Tools and spare parts (for free) No. Name unit quantity 1 Special tools for extrusion line set 1 2 thermocouple set 1 3 potentiometer pc 1

VII、installation ,aftersale service and others The guarantee of machine is for one year, one year later, spare parts will be provided by low price . Installation power：100Kw, actual use is65%. Machine color is made by seller's standard, if buyer has any other requirement, please provide the seller the color code. When delivering machines, the seller will provide one set of machine technology data. 5、after machine arriving buyer's factory , the seller should provide technology support and installation . 6、during installation in buyer's factory , the buyer should provide the normal production condition . 7、during installation , the buyer should pay technician food, hotel, and make sure technician's safety . 8、the installation period is 5-7 working days. VIII、quotation Quotation :USD 190,000 FOB QINGDAO Payment way：advance payment is 40℅，before delivering the rest 60℅ payment should be paid. Delivery : 40working days

Price: CFR Chittagong Bangladesh US $ 190,000.00 (The Price Includes supervision of Erection of Plant, Initial Design Drawing, Training by Chinese Engineers and also test run & trial) Company Formation: Green Wood Products with its band TimbaPlus will be a fully Owned Private Company with ownership has been Equaly Stipulated at 50% each to both of its owner Green Wood Products Private Limited Company Sadat Quader Chowdhury Owner has 50% stake at Green Wood Products Saquib Quader Chowdhury Owner has 50% stake at Green Wood Products Both of the owners belongs to most prominent business house in Bangladesh and has a strong line heredity and exposure in competitive business arena of home and abroad. Project Cost: Land total 60,480 sft : BDT 2,00,00,000.00 WPC Foam Board and Tiles machine : BDT 3,34,40,000.00 WPC Door & Window Profile machine : BDT 1,44,40,000.00 Plant Super Structure based on pre-fabricated steel : BDT 90,00,000.00 Civil Engineering and base works : BDT 50,00,000.00 Storage & Finished product storage : BDT 50,00,000.00 Truck, Forklift, Minibus : BDT 75,00,000.00 Office Block : BDT 35,00,000.00 Electrical Substation and generator of 500Kw : BDT 80,00,000.00 Water Treatment Plant & Deep tube well : BDT 15,00,000.00 Total Project Value : BDT 10,73,80,000.00

Daily Production Cost and Profit Analysis based on 10 hours operation per day where plant is running at 50% Capacity

Items Cost %

Raw Material, Inputs, packaging materials 107000 32.42

Utilities 100000 30.30

Maintenance and repair 8000 2.42

Labor direct 6000 1.82

Factory overheads 15000 4.54

Administration & Marketing Costs 35000 10.6

Total Operating Costs 271000 82.12

Depreciation 35000 10.6

Cost of Finance 24000 7.28

Total Production cost 330000 100

Net Selling Price 550000

Profit before Tax 220000

Tax @40% 88000

Net profit after Tax 132000

Daily Production Cost and Profit Analysis based on 20 hours operation per day where plant is running at

100% Capacity

Items Cost %

Raw Material, Inputs, packaging materials 214000 38.83

Utilities 200000 36.29

Maintenance and repair 16000 2.9

Labor direct 12000 2.17

Factory overheads 15000 2.72

Administration & Marketing Costs 35000 6.35

Total Operating Costs 492000 89.29

Depreciation 35000 6.35

Cost of Finance 24000 4.35

Total Production cost 551000 100

Net Selling Price 1100000

Profit before Tax 549000

Tax @40% 219600

Net profit after Tax 329400

FINANCIAL ANALYSIS The financial analysis of the candy project is based on the data presented in the previous chapters and the following assumptions:- Construction period 1 year

Source of finance 30 % equity

70 % loan Tax holidays 3 years Bank interest 8% Discount cash flow 8.5% Accounts receivable 30 days Raw material local 30days Raw material, import 90days Work in progress 2 days Finished products 30 days Cash in hand 5 days Accounts payable 30 days Pay Back Period The investment cost and income statement projection are used to project the pay-back period. The project’s initial investment will be fully recovered within 3 years if the project run at 50% of its capacity and within 1.5 years f it is run at 100% capacity. Return on Investment: 89% Brake Even Point BOP = Fixed Cost Sales – Variable cost = @ 100% Capacity 16.56% and at 50% capacity in 33.13%

PROJECT FEASIBILITY STUDY FOR

WOOD PLASTIC COMPOSITE WOOD PRODUCTION LINE

FOR

Green Wood Products

TimbaPlus BRAND