Welcome to the year of hope and beginning of a new growth cycle. The retarding effects of GST, DEMO & RERA are still present but market recovery and growth is expected, especially from the first quarter of FY 2018-19. Past one and half year have been riddled with slowdown, liquidity crunch, reforms led uncertainty in general where building materials segment is worst affected. Despite ofextremely slow demand in Wood, Panel and Decorative materials category, a huge capacity addition has taken place in this segment thus Year 2018 is set to witness a storm of competition in wood, panels and decorative surfaces category.
In 2018, my special caution and advice goes for MDF enthusiast who think that putting up an MDF plant is a guaranteed success formula. The truth is, excessive supply such as 8000 cbm a day will be a sudden overdose against an estimated demand of 3500 cbm (expected). This will lead to unexpected price cuts hence choking the margins and increasing need of working capital in near period. MDF market is expected to grow at the rate of 20-22%, thanks to growing uses in surfacing, Jaali, boxes, replacement of 6 mm, replacement of cheap plywood but it does not mean there is big scope of profit in near 2-3 year terms. Hence if anyone expects MDF industry as a lucrative option, must do his home-work better.
“2018 is the year for organised players, active retailers and able sales professionals!”
The tsunami of new Plywood plants and capacity addons is another big ‘disruption’ building up, which might hit ‘very hard’ to inefficient, unorganised and poor-quality ply-board manufacturers. The price rise of poplar and eucalyptus will also suffocate the financially weak players. Year 2018 will witness increase in manufacturing cost, fall in margins and high requirement of capital in books. Year 2018 is expected to be a better year compared to last year in terms of demand but shall need capital, team building and higher spent on marketing and branding.
“I read The Ply Reporter line by line,” he said
Any manufacturing should be backed up with research on supply and demand. Becoming organised in Distribution holds plenty of possibilities. Year 2018 will offer bright prospects for organised distribution and focused retailing. Entering in furniture manufacturing business in 2018 could be rewarding in coming years. The Ply Reporter believes, 2018 will offer demand opportunities from government and corporate sector hence branded segment will have good time. On the occasion of new year, I wish ‘Manufacturers of Plywood, Laminates & Decorative veneers include the payment cycle and interest part in their calculation and check credibility before offering material in desperation’.
Year 2018 will witness increase in manufacturing cost, fall in margins and high requirement of capital in books. Year 2018 is expected to be a better year compared to last year in terms of demand but shall need capital, team building and higher spent on marketing and branding.
The Ply Reporter receives a lot of good & interesting reviews but I remember only a few. A growing manufacturer and a long time advertiser have recently commented that he reads ‘The Ply Reporter’ line by line. I really liked the last 3 words, “line by line’. What can be more motivating for us to see readers’ & advertisers’ increasing faith on Ply Reporter year after year? Opinions like these are the best New Year gifts for Team Ply Reporter. Happy New Year!
Pragat Dvivedi
Founder Editor
Mail to “dpragat@gmail.com”, ( M) 9310612991.