SHELTER

October  2004

A Latin American Touch
Chilean Company Has Found A Niche With it's MDF Mouldings
by Samantha Carpenter

The country of Chile is located in South America and is a long, narrow country lying between the Andes Mountains and the Pacific Ocean. With a population of more than 15 million, it has a partially developed free-market economy based mainly on mining and manufacturing. 

One company that has contributed to the country’s developing economy is moulding and door manufacturer, Polincay. The company, which started its production in 1991 with picture frames that were paper wrapped, veneered and primed with its unique Jesso-coat system, is located in Santiago, the capitol and largest city in Chile. 

According to the company, the Jesso-prime technique used on pictures frames was later tested and applied for the first time on multi-density fiberboard (MDF) mouldings. 

“In 1992 when production of construction mouldings for interior uses started, Polincay was the first company in Chile to apply Jesso primer on MDF profiles and also the first to export them to the U.S. market,” said, Horacio Fernandez, president and chief executive officer.

The Beginning of Exporting
Polincay began exporting to the United States in 1992 because it wanted to be an active participant in the growing wood export market. According to the company, in 2003, the total amount of forest products exported from Chilean companies to the United States reached more than $656 million.

“Since late 2003, we have been able to export an average of 120 to 130 containers of ultralight MDF mouldings per month, both to the United States and Canada,” vice president Rodrigo Fernandez said. “Today, with the acquisition of a new sawmill, we will be able to produce an additional volume of 70 loads of primed finger-jointed mouldings.”

Besides the United States, Polincay exports products to Canada, Mexico, Australia, New Zealand and Japan.

“In Latin America, we distribute our products to Peru, Ecuador, Honduras, Guatemala and Venez-uela,” Horacio Fernandez said. 

Exporting does have its challenges.

“One of the big challenges every exporter is facing today is getting its [products] loaded on a vessel to be shipped to the different markets,” Alex Hepp, vice president of marketing, said. “Since vessel space has been difficult to get, we have adopted the rule of committing only with what we can ship every week. By doing so, we have managed to keep our lead times within a reasonable time frame.”

The company says that it responds to critics who believe imports are hurting the U.S. market by arguing that MDF mouldings have their own niche in the U.S. market.

“[Because the mouldings] are made out of ultralight MDF, which is not being produced as a common MDF product in the United States, our mouldings could be considered as a complement product among the wide range of products that are being offered in this market,” said Jon Duncan, general manager of the Polincay-USA office in Atlanta.

Mouldings and Doors
Polincay’s largest volume product is its ultralight MDF Jesso-primed mouldings, but during the last part of 2003, the company expanded its range of products adding pine finger-jointed Jesso-primed mouldings.

The company also offers a large variety of hollow-core doors, produced with different skins, MDF, hard-density fiberboard and veneered plywood skins. It offers seven different door lines, with different styles and pre-hung door kits.

“Our finger-joint mouldings are made out of plantation grown Radiata pine lumber, although we have made some successful tests with other species, such as Eucalyptus,” said Horacio Fernandez. “Our doors are being produced out of the same Radiata pine wood.”

“All the wood that we use is harvested from local plantations, which have sustainable management plans in accordance with Chilean environmental laws and regulations,” Rodrigo Fernandez said.

He said that whether or not the wood will get Forest Stewardship Council (FSC) certification is still undecided. 
 
Not having the certification hasn’t hurt the company growth. In 2001, it moved into a new, 260,000 square-foot moulding plant, which has since been expanded and is now 360,000 square feet. In July 2003, The 2000 election will certainly have its place in history, with issues that remained long after the results were finalized. Nearly four years later, there is still the question of whether the Electoral College is the best way to elect a president. There is still concern about voting methods and whether adequate improvements have been made, especially in battleground states in which the election will be decided. next to the moulding plant, where it produces nearly 65,000 doors a month. In addition to these two facilities, Polincay owns a sawmill in the southern part of Chile, which it says has a production capacity of 70 loads of finger-jointed Jesso-primed mouldings per month.

The company employs 350 workers at both plants, plus 25 administrative staff. The moulding and door plants both work one shift, five and a half days a week.

Quality Control Measures
Both in its manufacturing process and shipping process, the company says it adheres to strict quality control measures.

“We have a quality control department that is charged with overseeing the entire production process,” production manager Mauricio Burgos said. “In addition to that, we have very highly trained personnel at every step of the production cycle who are in charge of their individual stations and are constantly monitoring the quality of the product at each location, such as at the moulders, prime lines, sanders, packing, etc.”
“Polincay mouldings undergo strict quality control before being packed in solid wood pallets and plastic-wrapped units, which protect the product during transit … Our packaging insures that our products are delivered in perfect shape,” Rodrigo Fernandez added.

One Step Versus Two Step
Though its goal is to work through two-step distribution, in some states Polincay has found that the accepted manor of distribution is one step. The company says the main difference it sees between two-step and one-step is that a two-step distributor might take up to 50 loads per month, while a one-step distributor might take a maximum of three to four loads monthly, according to Hepp.

Polincay helps distributors merchandise its products by issuing catalogs, brochures and general information regarding its products, plus it issues material safety data sheets. 

The company has also had many of its customers visit its facilities in Chile.

“They know where we are, what we do and our different production capabilities,” said Horacio Fernandez. “In addition, we try to visit with our customers throughout the year … A constant and good information exchange is very important in order to achieve our common goals.” 


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