Challenges and Solutions to Raw Material Supply in Plywood Industry

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Working from the grass root level to upwards, there are four key stakeholders which comprise of plywood industry i.e. Farmers, Plywood manufacturers, Government authorities and Skilled Professionals. Each stakeholder has his own critical role to play and cooperate with each other, walk handin- hand, to ensure that our industry grows well. All stakeholders are “beads of the same string”, and have to be in harmony, working together cohesively, for growth of our industry. Drawing from myexperience, I ‘feel that there is a dire need for coordinated efforts amongst Various stakeholders to take Plywood industry, to the next level of working. Here, I would like to deliberate upon the most important factors affecting the Plywood industry which is the Challenge in Raw Material Availability and its solution.

Our industry struggles with the issue of raw material inputs ‘which are largely dependent on the vagaries of nature: good rainfall, adequate plantation, labour issues) etc. Moreover, in years of excessive production due to over-supply, the .farmers don’t get competitive price for their produce. They find sowing of timber as non-lucrative and thus shifts towards planting of other alternatives like wheat, rice etc. for the next season, thereby causing a glut of availability of raw material for next season. The industry also cannot plan its production and enhance its capacities, as it is unsure about the availability of raw material to meet its production orders. It is also observed that India being a vast country, with plywood industry spread in zones across north/ south/east and west India, at times, there are regions which have excessive supply of raw timber due to a good season, while some other regions have a shortfall / glut of availability of raw material. This imbalance causes a price differential wherein farmers crone region get paid higher while farmers of another region suffer due to excessive production.

The Solutions

As a starting point, a transportation subsidy can be considered to be offered by Government of India. This can be an interim step till we achieve setting-up of -e-MARKETPLACE” which will bring together the farmers, the logistics companies, the entrepreneurs I industry, across India. It can be an electronic mandi wherein the sellers (fanners) and the buyers (industry / entrepreneur) bid and discover the most competitive price for timber, across India.

This “e-Mandi”/ buying selling electronic platform, especially for timber, will offer an opportunity to the farmer to sell his produce to the highest bidding buyer of timber. irrespective of the location of both parties be it farmer based in north India and selling to an industry based in south India. Eg: The industry entrepreneur will quote the price it is ready to buy the timber at, and the farmer can check electronically the most competitive logistics available for transporting his timber from his part to the industry entrepreneur. In case, farmer is better-off selling his timber to an industry/entrepreneur who is based far away, he can click and accept that order & simultaneously book the truck/logistics for delivering his produce.

Many transport websites like Truckky, Truckguru, Trucksuvidha, Transapp, Freightbazar etc. have already come up and are fast growing in the field of door to door truck and freight service offerings which can be integrated with our Plywood industry.

To explain in detail, a need for a structured market based mechanism which could ensure proper price for the fanners produce should be there. In the interim, till such sn e-marketplace is set-up by government, a Transportation Subsidy can be of by the Government of India.

Based on the current plantation timber prices in different parts of India (for eg., price of timber is very economical at present in the northern regions), facilities for economical transportation, such as transportation subsidy should be provided in order to discourage core-veneer imports and save valuable foreign exchange for the country. It is already being offered by Uttar Pradesh for transportation’ of potatoes, within their State.

With GST having been introduced now by shifting the farmer’s timber produce from lower-priced North India region to better-priced South India region, cushioned through logistical support in form of Transportation Subsidy, will help stitch together our industry pan-India, as ONE. It will motivate both, the farmers & the industry, as farmers would get a proper price for their produce and the Industry would be able to reach and explore new markets within India and aboard.

Another solution, may be Minimum Support Price (MSP) for timber. Plantation timber growers (such as rubber,poplar, eucalyptus) should be well-represented in the decision-making bodies of our industry. Being the starting point and provider of material input, their integration into decision making would ensure grass-root level participation. Taking good care of their interest, like providing for a Minimum Support Price (MSP)for timber( as in sugarcane) should be actively sought, as it would help maintain farmer’s interest on one hand and provide a momentum to the supply of plantation timber for the wood panel processing industry. Such an initiative will immensely help the industry withstand the fluctuations in input prices owing to uncertain growth patterns.

The economic viability of the above solution will have to be checked by the Government but such a step would boost the farmer’s income and confidence to ensure steady supply of raw material to the industry.

AnticipAted Benefits:

  • Core-veneer imports are an unnecessary outflow burden on our economy. Economical local movement of plantation timber will discourage core-veneer imports.
  • The move will also enable Indian farmers to maintain their revenues and encourage steady, unbroken growing cycle of plantation timber.
  •  Indian plywood manufacturers will have better pricing competitiveness for encouraging higher exports and will provide a basis for more focus on export markets.
  • India will also have a steady green cover based on plantation timber.

A nation-wide coordination effort between all the stakeholders, especially the relevant government departments and authorities, must be initiated in order mbring the above considerations into implementation. The Wood Technologist Association will be privileged to offer its coordination services voluntarily, in order to safeguard the future interests and competitiveness of our Indian wood panel processing industry.

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