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Sustainability

Of nature for nature: modified wood

Modify fast-growing softwood to make it durable and as pleasing to the eye as tropical hardwood. That's the mission of Kebony, a Norway-based "nature tech" boutique that has drawn the interest of architects, construction companies and consumers. Private investors have come on board too, attracted by the company's sustainability credentials and business acumen. Even so, some challenges remain.

Date
Author
Martin Gelnar, LGT
Reading time
7 minutes

A modern two-storey wooden house nestled in a jungle-like forest, peacefully bathed in morning light.
Keybony's modified wood has attracted the interest of architects and construction companies who are using it to create modern building concepts. © Kebony

"Isn't it good, Norwegian wood?", the Beatles sang in their hit single from 1965, a song that could easily pass for Kebony's company anthem. Tweaking the title to "modified wood" may work even better.

A man in a production hall holds a long beam in his hand and looks along the edge of the wood at the reader.
"Wood on steroids": Kebony's treatment gives the finished product the strength and appearance of sought-after tropical hardwoods. © Kebony

Kebony was established as Wood Polymer Technologies (WPT) in 1997 with a not-so-modest claim of redefining the treated-timber industry. Fast-forward to 2024, and around its two production sites in Norway and Belgium, heavy forklifts ferry sawn timber to the factories and load the finished product onto lorries. But where's the groundbreaking innovation in this apparently low-tech environment? It is there, hidden from view inside the halls - a trademark-protected process called dual modification™. After a treatment with a mix of bio-based liquids derived from crop waste, and a subsequent drying process, the product leaving the factories is a sort of wood on steroids. It has the muscle and the looks to rival coveted tropical hardwoods, or in fact any type of modified or untreated timber used in construction.   

Wood sprinkled with a special sauce 

At the heart of the process is the research by Marc Schneider, a former professor of forestry and wood science at the University of New Brunswick in eastern Canada. Schneider, now in his 80s, was fascinated by the idea of turning locally sourced, fast-growing wood into a substitute for tropical hardwood. He managed to design a successful impregnating process that gave the treated wood a rich brown colour as well as outstanding durability.

Over the shoulder of a person you can see their hands picking out two pieces of wood from a row, one is darker
The process, which includes darkening the wood, involves soaking it in a liquid made from plant waste and then drying it with heat. © Kebony

After some failed attempts at commercialisation, the breakthrough came when a visiting scholar from Norway presented it to a group of wood producers, which resulted in the sale of Schneider's rights. The company has since refined the production process, protecting it by patents of its own. Today, it brews its "secret sauce" from readily replenishable agricultural residues of food production such as bagasse, a fibrous mass left after extracting juice from sugar cane.

A production worker uses a type of water hose to spray a stack of wood in a production/storage hall.
The first step is treatment with the special "sauce", which today is derived from readily available food processing by-products such as bagasse. © Kebony

The fluid and the relatively moderate temperatures of just over 100°C in the curing process result in a desired thickening of the cell walls, making the wood robust and durable whilst preserving its aesthetic appeal. According to Kebony, this sets the method apart from other treatments that involve temperatures of up to 215 °C with possible side effects such as increased brittleness of the wood.

The diagram shows the two steps involved in modifying wood. Impregnation and finishing.
Impregnation changes the water sensitivity of the cells, making them more resistant. © Kebony

"Sustainable" timber ticks the right boxes

Being active in a segment of the lumber trade qualifying as sustainable is a big plus in times of heightened environmental consciousness and changing consumer habits. "The use of wood in the building sector is driven by various factors such as sustainability, environmental concerns and the desire for natural and aesthetical pleasing designs," says Tom Paemeleire, Kebony's CEO.

Kebony has caught the eye of architects, construction companies and end consumers on and beyond its Scandinavian home turf. Projects featuring Kebony cladding for buildings or decking for terraces or boardwalks can be found in Brussels (the Norwegian embassy), Antibes on the French Riviera (the Quai des Milliardaires), and New York (Hunter's Point South in Queens, opposite Manhattan). A growing number of awards attests to the attractiveness of the product as well as savvy marketing. 

Five people stand against the evening sun on a wooden footbridge on the banks of a body of water, in the background a skyline.
Kebony decking for terraces and promenades can also be found in New York (Hunter's Point South in Queens, opposite Manhattan). © Kebony

Helping to prevent deforestation 

Kebony hopes its products will increasingly make inroads in the market for Ipé, the so-called iron wood, and other tropical varieties. Those raw materials, often illegally harvested, are too precious to be used in construction around the world, Kebony says. Deforestation, driven by the demand for these valuable tropical wood varieties, not only threatens biodiversity and ecosystems, but also contributes significantly to climate change by releasing stored carbon into the atmosphere.

Recent developments in the regulatory sphere look set to strengthen Kebony's hand. Some frequently used tropical hardwood varieties like Ipé are being added to the directory of CITES, the Convention on International Trade in Endangered Species of Wild Fauna and Flora. This means that from the end of 2024, trade in these wood species will be restricted. "There is a high demand for sustainable wood products, and I would think that it will increase in the future," says James Dodson, partner at Oslo-based SPINN arkitekter, a Kebony customer. He adds that customers are looking for ways to decrease the carbon footprint involved in construction.

A light-filled room that appears to be part of a modern glass and wood house. A woman is reading in a window seat.
"There is a high demand for sustainable wood products, and I would think that it will increase in the future," says James Dodson, partner at Oslo-based SPINN arkitekter, a client of Kebony. © Kebony

This is, of course, music to Kebony's ears. CEO Tom Paemeleire duly points out that the Financial Times highlighted the company's potential to address both carbon emissions and deforestation in a 2023 competition where Kebony came top in the manufacturing and construction category. In the context of climate change, preserving the planet's "green lungs" is getting more important. In a reaction to the outcome of the so-called COP28, the United Nations Climate Change conference from late 2023 in Dubai, non-profit organisation Global Canopy noted that the aim to halt and reverse deforestation for the first time made it into a final COP text. 

A wide wooden walkway and a modern footbridge stretch out against a panorama of the Alps and a blue sky.
In addition to numerous applications, such as this bridge, a growing number of awards testify to the attractiveness of the material. © Kebony

Many clients will like Kebony's claim that it produces the ultimate alternative to hardwood, but is that enough? Competitors offering minimally treated or even untreated, locally sourced timber, can also extoll the eco-friendliness of a tried and tested natural product, and one that's been around for centuries. James Dodson, a senior architect, acknowledges that untreated timber does play a role in construction. "It varies from project to project, but we find Kebony to be more durable and predictable in its aging," he notes. 

Not out of the woods quite yet

Whilst the "Norwegian wood" story seems compelling, work still needs to be done. For instance, whilst part of the raw material is bought close to EU home market in Sweden, the remainder is sourced in New Zealand. Kebony explains that New Zealand forestry operations are renowned to be among the world's most sustainable ones. Furthermore, the CO2 footprint of local road transportation is generally larger than bulk shipping from far-off locations such as New Zealand, Kebony says. Programmes to increase local sourcing and improve the company's sustainability credentials by way of waste reduction and new bio-based chemicals are in place, according to CEO Tom Paemeleire.

To what degree the Kebony product supplants precious wood from Brazil depends to a large extent on the local market situation. For SPINN arkitekter, the replacement takes place on another level, when the architects use the dually modified Kebony product rather than minimally treated timber delivered by a handful of Norwegian suppliers. "We never use tropical hardwood," SPINN arkitekter's Dodson says.

"A replacement of Ipé hardwood by Kebony products would mean a huge saving of greenhouse gas emissions," Kebony wrote in its latest Sustainability Report 2022. Based on the much lower carbon intensity, i.e. the carbon dioxide emitted per a given unit, of Kebony products versus a comparative value for Ipé wood, the company computed that it saved around 143,000 metric tonnes of CO2 in 2022. This is about what 30,426 individuals produced in 2021, based on the International Energy Agency's global average energy-related carbon footprint calculation of around 4.7 tonnes of CO2 per person.

The replacement question harks back to discussions around so-called additionality, a measure of the economic or environmental value added. This concept has caused headaches for some companies embracing sustainable business models. For example, a startup offering products and services with a beneficial "climate contribution" claim must be able to prove its projects result in saved emissions elsewhere. Not all companies are able to do that. Consumers may think of it this way: Buying "green" electricity from an existing hydropower utility has no environmental benefit if the purchase doesn't lead to the buildup of additional wind or solar production capacity.  

Branching out

The sapling that used to be Kebony has moved out of the tree nursery a while ago. What comes next? It fits the "nature tech" profile, a segment populated by companies active in segments such as regenerative agriculture, soil health or environmental data tracking. Accounting firm PricewaterhouseCoopers has pegged the market size for nature-related technologies addressing climate and biodiversity crises at up USD 2 billion (estimates for 2022).

With yearly sales of 58 million EUR and expenditures of 1.5 million EUR for research and development, Kebony is a small-to-midsize franchise, but has a solid business model and a sizable customer base. To better serve its clients in continental Europe, Kebony has built a strong organization both in Norway and in Belgium. This in addition to local sales teams supporting the business in each of the active countries. Occasional CEO changes in the past may reflect the challenges a typical startup on a growth path faces. And growth is what the company is after, hoping to expand in existing markets like North America and open new ones like the Middle East. 

Modern timber and glass house welcomes you in with warm light and an open patio door. On a wooden deck is a large dining table
The company is looking to expand in existing markets such as North America and enter new regions such as the Middle East. © Kebony

Next-stage growth prospects

When companies move out of the startup phase, they look to scale up their business, produce solid cash flows, and attract growth capital. At this stage, larger private equity investors often edge into view. They may decide to take a stake in the company, usually with the intention to place it with other corporate investors, merge it with another asset, or take it public.

Exciting times for Kebony? Whatever the future brings, the development will be keenly followed by the company's shareholders that helped the company to take root. 
 

LGT partner company among Kebony's shareholders

The list of Kebony's main shareholders includes names with government ties such as PMV, a Flemish investor, as well as Belgium's sovereign fund SFPI-FPIM. Others such as Lightrock, LGT's impact investment partner company, have been invested in Kebony since 2022.

Kevin Bone, a Partner at Lightrock, commented: "With Lightrock's active involvement on Kebony's Board and Sustainability Committee, the company has enhanced its strategies for positive climate impact. This includes a more effective approach of measuring greenhouse gas emissions avoided compared to conventional materials and a detailed assessment of how much carbon is captured in Kebony's products."

Global impact investing platform Lightrock aims to achieve financial as well as societal and environmental returns by backing growing companies that help to address the world's most pressing problems. Lightrock employs more than 115 investment professionals across a global network of six offices and currently has a portfolio of close to 100 growth-stage companies. H.S.H. Prince Max von und zu Liechtenstein, Chairman LGT, founded Lightrock, and chairs its board of directors. 


Lightrock

 


 

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