The wood panel and decorative surface and panel industry data gathered from industry, trade and markets shows that August and September were important months that supported the weak performance of wood panel decorative industries. After July, the lifting picked up and the sales of every company noticed a sharp recovery.
Plywood, laminate, decorative veneers, MDF, Particle Boards, Film face plywood etc. Each of the product category received orders and manufacturers were able to utilize their 70-80 percent capacity. The material lifting recorded by majority of organized and mid-segment players in plywood and laminate category was also confirmed by the distributors-dealers who were of views that large chunk of this material went into restocking. Demand in the first few weeks following the implementation of GST was slow as businesses were still adjusting to the new tax system and the quarterly results declared by companies so far have been mixed, but largely around expectations.
Despite lingering issues surrounding the goods and services tax (GST) and depressed rural demand, HPL brands have recorded highest dispatch in many pockets during September and the similar trend was observed in plywood and MDF category. The month of October reflected a slight improvement in business environment as an effect of restocking at primary levels. Though disruptions caused by demonetization move and GST roll out is still showing its impact on payments recovery and margins of the companies.
The restocking of goods by traders and distributors after GST rollout on 1 July lifted sales of plywood and laminates compared to April-June quarter, when growth in the Indian economy came in at the slowest in three years and building material related businesses were grappling with high GST slab and payment issues. Volume growth in sectors such as cement, automobiles and select consumer items has been better than expectation hence hinting for a recovery sooner than expected.
For unorganized players, the month of October has been good though for organized players October dispatches has slowed down. The restocking during July-September quarter is complete and ground level demands are still below average hence there will be a mixed environment in the market in time to come expect Analysts at Ply Reporter.