A Group of manufacturers under leadership of Mr Naresh Tewari, were making efforts since past few years to create a specially allocated area in Punjab where plywood and allied industries can function together. It will be getting benefit of cheaper operational cost with developed land apart from some incentives offered by the Government. After ‘Plywood park’ announcement in Punjab, there were voices against the initiative and the concept of ‘Plywood Park In Hoshiarpur’. The reason talked about is ‘increase in competition due to oversupply scenario’ and bringing the prices lower. The Ply Reporter spoke to AIPMA Chairman, Mr Naresh Tiwari, for his view on the matter to know the facts in detail.
The effort made under your initiative for ‘Plywood Park’ in Hoshiarpur, Punjab is being criticized due to the fear of unnecessary increase in number of plants and thus bringing down viability with rising competition and input cost of timber. What is your view?
The Government was planning to create a Plywood Park in 400 acre land. Witnessing the move we have proposed a Plywood Park in 60 acres land in Hoshiarpur, in which the facility of common Savage Treatment Plant (STP) and Effluent Treatment Plant (ETP), a process design for treating the industrial waste water for its reuse or safe disposal to the environment, besides the Road connectivity, common water supply system etc will be provided. The common facilities like STP, ETP, and power generation will reduce the cost of factory operation. Also, these days, local people are creating problems for establishing any factory in village area, the factories based at Hoshiarpur are unable to expand their operations and the New plywood park will offer a space with facilities without hassles even with some government benefits. In fact it is a benefit to the industry at large where more smooth operations can be established in synchronized manner. This small Plywood Park is actually a pilot project where cost reduction is considered to match with MDF and PB prices. I think, the entire industry in every state clusters should approach their activities in this way.
Does not it mean, that more new licenses will be applied for these factories?
For this park, we are not willing for more new licenses and actually the government issue it after analyzing the timber availability in the state. We can’t do it or ask for it. We all know the rules that ‘until there is enough timber availability supported with scientific data, there is no matter of issuing new licenses. Here, license is old but facilities are well planned and common thus bringing down the cost and increasing work speed. We are not taking SMEs cluster advantage in this project. If this concept succeeded, more will follow and we will grow. In addition to it, we have also requested the Government of Punjab, to make clusters of industries because it attracts the customers as well.
How will it impact timber equations?
The biggest benefit will be availability of raw material. Individual factories spread over different locations do not attract the buyers as well as the suppliers of raw material. Yamunanagar is a successful hub of plywood manufacturers because it attracts both. In Punjab, we want to build such cluster with all common facilities to reduce the cost of production and compete in the changing dynamics of the market.
What if, the same is done in Uttar Pradesh as well?
The NGT orders and Supreme Court guidelines on this matter are implementable all over India. Here also, we follow the same government rule, where authorities at first calculate the timber availability then only there are possibilities of new licenses. We obey and follow, the NGT judgment, where it is clearly mentioned that without availability of timber, no further licenses for wood-based industry would be allowed. We all know that, on the basis of it, UP government had to withdraw the case in Supreme Court.
If government allows new licenses on MDF and Particle Boards, will it affect small size plywood producers?
If a saw mill has not been given license, how MDF and Particle board units can be given license? MDF and Particle Board industries are also wood based industries so NGT order is applicable to them also and they should not be given license for capacity enhancement also. The licensing is for sustainable availability of wood. Licensing is on installation of new machineries for wood based industries.
All India Plywood Manufacturers’ Association (AIPMA) will have to strengthen itself to compete with MDF and Particle Board segments of wood panel industries and for that very soon we will have to bring Faceless plywood and calibrated plywood in the market. This is the way by which we can stop MDF and Particle Board segment to eat our share of the market.
As AIPMA Chairman, what is your message to Plywood Industry?
We should be united and stand together to compete with MDF and Particle Boards’ increasing market penetration into plywood segment. We have to be innovative and implement various new things to combat the challenge because in Indian household and weather scenario, plywood is the best suited material. Basically, plywood is a core material and for application any other material where veneer, laminate or other surface material is overlaid. If we deduct the cost of the face veneer, it will be priced parallelly to MDF with more stability and higher strength at any given circumstances. Plywood is stronger than MDF and also nail holding is better in it. If the price would be parallel then OEM will prefer plywood for their use. MDF and Particle Board is Faceless product and to compete with them we should also bring Faceless plywood.