Organised wood panel and plywood companies have witnessed a growth ranging between 6 to 12 percent across the sector during financial year 2018 - 19. Though the drop in their profit margins is an indicator of pressure in this segment. Entire bucket of Plywood, Panels, Decorative laminates or Doors producing companies and brands have expanded their network and extended their product categories to cater different buyer groups but the past Q3 result in FY 2018 - 19 and the expected results being heard is keeping a profitability pressure among organized players.
Due to increasing supply of finished goods and rise in Raw material cost and higher expenses, the organized sector is trying to cut down on various points including substituted raw material and increasing plant efficiency. The ongoing demand slump and price war like situation is not giving any scope to these companies as of now. Big brands like Green Ply, Century Ply, Archid Ply, Duro etc have introduced economical range plywood to cater the demand of middle - class customers and even furniture grade but the material lifting has been not very rosy other than few projects. The lifting is not much because a huge supply of good quality materials from mid and small sized plywood brands from northern India', says a Surat based Plywood dealer. Slow real estate market and payment pressure and holding on to market share factor are the key reasons for profit drop of formal sector companies feel experts in trade.
Most of the big brands have registered around 10 - 14 % growth in FY 2018 - 19 compare to previous year largely due to a result of implementation of GST followed by e - way bills, but the companies had to offer schemes, TOD, CD etc to maintain the sales tally. In the product categories MDF has been the worst hit that has brought down the profitability for Plywood majors in this FY. The organized companies are in process of summing up their financial analysis but the possibility of decrease in profit compared to last year growth are very much expected.
It is to be noted that Century Ply posted a turnover of Rs 2018 crore, Green ply Industries stood at 1651 crore where as Archid ply Industries touched 311 crore. The organized companies like Sarda Plywood, Uniply Industries are making efforts to sustain and grow amidst ongoing competitive scenario.