Market Demand Subdued, Emerging Competition a Big Worry

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The market for plywood and panel products is becoming fierce and throat cutting as reported by Ply Reporter correspondents from across the country. The emergence of new plants in every product category related to wood panel surfacing sector is continuously bringing down the operating margins of every players except a selected few. The market share of almost everyone, be it brand or manufacturer is found to be stagnant or have reported a decline because of increasing number of manufacturers in this segment reflect the recent study conducted by the Ply Reporter and Big Sea Market Research wing.

Speaking to manufacturers, the Ply Reporter finds a kind of big unrest due to low installed capacity utilisation in plywood and other wood panel products. The hope for a better market scenario does not look imminent because the reality market is not improving across the markets. The plywood demand in North and West remains subdued as sales per retail counter has noted a drop of 40 to 60 percent’ as commonly accepted by retailers.

The on-going survey conducted in MP, Rajasthan and Maharashtra reflected a subdued response on all time evergreen products like particle board and even MDF. The surge in supply has dented the profitability of retailers thus they are once again promoting plywood sales just because of better margin obtained compared to other panel products. The demand in Project sales continue to be stable thus branded segment has maintained its sales numbers. Though operating margins are diving down because of more players entering in project market space. The month of November said to be a dull phase post festive season of Deepawali. The market does not expect any big change in ongoing status before budget.

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