The plywood laminate and timber markets are still struggling even after 2 months of GST implementation. ‘Sales are weak, payments are not coming and uncertainty looms everywhere, be it for a manufacturer or a dealer’.
The sales in plywood have seen a massive drop of around 35-40 percent from its levels recorded in Feb-March 17. Timber suppliers are not much happy either. Trouble faced by small retailers and traders and their complaints to the new GST law is genuine because it is giving them sleepless nights. Particle Board and MDF sales are at average level but that too is based on discounting support. The sales in decorative laminates are down by 20-25 percent. You may come across few people who claim, they are not that affected which is mainly due to addition of new stockist in every region and the sales are largely primary.
The only bright spot we can see is the good demand for Film Face Ply, mid-segment brand’s plywood ply and HPL. There are hopes that the Government will bring some relief by easing up GST norms but the sentiments at present are negative, the hope for revival is equally bullish.
The recent changes in policy regarding freeing up wood panel industry form licensing are a favourable step. The changes allow establishment of new wood-based industries in the country (except North East, UT). The new guidelines make a strong possibility for opening of MDF, Particle Board, Plywood pasting, Flush Doors and other wood based furniture units in many deserving states. UP, Haryana, North Bengal, South India etc could be the key places for this. This is going to improve plantation and give big boost to wood based industries.
Many industrialists fear about more competition because the installed capacity is already way high as compared to current demand scenario. However, it is equally true that farmers are not planting trees with the enthusiasm they should have done. The future is going towards ‘survival of the efficient, smartest and visionary entrepreneurs’ in this segment for sure. The move is undoubtedly the needed step to boost the confidence of for better price and to create a sustainable “timber supply vs industrial demand” equilibrium.
While travelling to different markets, I often ask and research, ‘Are businesses/Enterprises doing what they must do? Factory owners are supposed to adopt and charge taxes from the market. Are they doing? Enormous efforts are required for skill development, creating awareness and motivation in each enterprise within the ecosystem. Are they building up? And do retailers & distributors understand the situation of manufacturers? Or, are we all running our fingers in calculators to add up more wealth? Briefly, I can conclude by saying, “Wood Panel Industry needs to do a lot, a lot!” Those who are doing it today, shall be the ‘best profit making businesses of tomorrow’