Despite short-term challenges, surging GST collections—crossing Rs2 lakh crore monthly—signal growing liquidity. For the Indian panel industry, now completing its second 25- year cycle, the shift from a seller’s to a buyer’s market has compressed margins.
As June sets in, there’s a visible shift in market sentiment. Liquidity is slowly improving, and payments are easing—thanks to the RBI’s softened stance on interest rates and India’s promising economic outlook. Despite a mixed on-ground demand scenario, India continues to shine as a global economic hotspot, outpacing many markets.
However, the surge in production capacities across wood panel and decorative sectors has led to oversupply, creating temporary stress. For over two years, the industry has been discussing this. Now, consolidation is becoming evident—especially in the plywood sector, and gradually in laminates but Particle board is next in line. In the past year alone, around 4,500 CBM of additional capacity has been added in particle board manufacturing. When a market operating at approx 10,000 CBM/day and suddenly add up around 50% more capacity within a year, a temporary bloodbath becomes inevitable.
On the brighter side, MDF has crossed its phase of wars and Domestic consumption is rising, aided by BIS standards and increased capacity utilization. The laminate segment may start seeing relief by July as the festive and wedding seasons approach and stalled projects start moving. It is also strengthened by fast consolidation and growth in branded product sales.
Corporate activity is also picking up in India evident from the increasing office space absorption and growing NRI interest in real estate and business investments. Infrastructure, hospitality, and healthcare projects remain strong. Despite shortterm challenges, surging GST collections—crossing Rs2 lakh crore monthly—signal growing liquidity.
For the Indian panel industry, now completing its second 25-year cycle, the shift from a seller’s to a buyer’s market has compressed margins.
Profitability, which once stood at 30–40% during 1st twenty five years cycle now stabilizes at 7–10%. But to sustain this, the industry must prioritize two things: plantation and real big effort on training people in sales, marketing, production, and R&D. Sales professionals specially need to evolve because Stagnant approaches and inflated salaries aren’t sustainable. Loyalty, performance, and skill upgrades are non-negotiable. Retailers have adapted well. In contrast, many wholesalers are still in a passive mode. Delayed payments and lack of capital infusion have cost them market share, prompting companies to move toward direct distribution and dynamic stockists. All i can say that optimism is here to stay but selling quality material holds the key.
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Enjoy reading!
Pragat Dvivedi
Founder Editor
[Published in Ply Reporter's June 2025 Print Issue]