Strictness to Use ‘Technical Grade’ Urea Push up Plywood Cost

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Strict checking on misuse of Agriculture grade urea has given a rise to the demand for technical grade Urea. According to industry sources, Many of the unorganized segment and small size plywood factories often use agriculture grade to reduce the cost of resin binder that is used in plywood manufacturing process. Recently Haryana government has increased the vigil on movement of supply of Agriculture grade urea and started raiding factories. Several teams of Chief Minister’s flying squad conducted raids at various places in Yamuna Nagar district and recovered urea from plywood manufacturing unit. The tightening on urea has led to trouble for few plywood manufacturing units who were using this cheap grade and now they are buying technical grade urea. Technical grade urea is 4 times costlier than agricultural grade hence the resin cost has gone up.

Urea is used in making resin mixed with formaldehyde which is a constituent of adhesives for finishes and molded objects. Urea-formaldehyde is a non-transparent thermosetting resin. Sources said that subsidized urea used in the plywood industry cost around Rs 300 per bag whereas the price of the technical grade urea comes around Rs 1,250 per bag. Secondly, Polyethylene (PE) contracts are being invoiced up Rs 3 per Kg, and PP producers are also trying to raise contracts by Rs 3 to Rs 5 per Kg this month.The increasing cost of constituent material has pushed the cost of plywood manufacturing.

It is noted that plywood factories cannot use agriculture grade urea as the government provided subsidy on it. Large-scale misuse of neem-coated urea by illegally diverting it for industrial use has been detected in Haryana. It has promoted authorities to raid plywood manufacturing units and in a year at least 20 FIRs
have been registered against them. Major misuse of subsidized urea is seen in Sonipat, Faridabad and Yamuna Nagar districts for making resin and plastic adhesives reports Haryana government official. The organized plywood manufacturers and large size resin producing companies says they use technical grade already hence they do not have any issue with the strictness, instead, it shall be more strict across the country so that everyone can be on the same level playing field.

 

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