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  • GST could be an opportunity to take you from < 100 cr to 500 cr Pragat Dvivedi

    15/May/2017 Ply Reporter 

    After demonetisation, market for wood panel product picked up across the sectors and geographical locations. Almost all building related products especially wood sector have fared well that can be termed as 20-30 percent higher than expected levels. Last quarter ending on March 31st i.e Jan-Mar 2017 spell has not only gave comfort to big brands but also to small and medium enterprises. The companies/brands from organised sector like Century Ply, Action Tesa, Greenlam, Merino, Duro, etc have hopefully grown their sales in double digits followed by a few who have missed it by a narrow margin and remained in single digit. Yet it is a very strong performance indeed (though it will be confirmed only after annual balance sheets).

    Keeping a similar pattern the players from ‘Wish to be Organised’ category and small level wood panel producers too have more or less maintained a decent growth. It shows that despite of all hue & cry, there has been a moderate growth in building material space in 2016-17. Product wise Plywood, Laminate, Doors, Shuttering materials, Flooring, ACP, HPL etc have grown in single digits where as Particle Board, MDF, PVC Boards having an estimated growth in double digits.

    ‘It is expected that 2017-18 will have a smooth run for all these products’ on the basis of developments/initiatives being taken up by Central Government supported by states where Infrastructure Industrial & Rural growth and Housing thrust will help to bring good demand for wood panel companies during the next FY. Although, I personally feel that effect of demonetisation on ‘material consumption vs real estate growth’ equation has somewhere escaped to re-emerge and there could be a patch of 2-3 months of dull demand in coming time after the rainy season.

    FY 2017-18 is set to witness GST, which will change the way wood material manufacturing companies work. Organised players are very clear on reducing price gap with unorganised ones hence launching economical brands to snatch the share of Semi-organised or smaller players, on the contrary Small/Semi-organised brands are yet to understand the opportunity they had after demonetisation and even at present. They must strengthen their fundamentals by readying with Capital, Capacity and Culture to work in organised fashion without any worry. If they are weak on few points they have huge potential too to win over new or maintain the existing markets.

    Small companies or below 100 cr companies who are 95 percent of the wood panel industry space must recognise that it’s time to work with right quality, right price and right people. One must reduce unorganised working, reduce wastage and fuel consumptions, reduce idle factory time and increase the number of dynamic ally’s who have ambition to earn decent margins. Dealers Margin and regional branding will be the key to growth in new FY and forthcoming financial years in wood panel sector. Few of these 95 percent companies have been good at it and now many of them need to be better than others. It is advisable that grab the opportunity from today and create a strong foundation for your company in New India. Focus on increasing efficiency, working for dealers earnings and sales team along with marketing efforts and GST could be an opportunity to take you from 100 cr to 500 cr.

    Enjoy reading..Happy new Financial year…

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