Plywood Supply to Rise, Exceed Demand, Profits to Drop

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In 2018, The plywood manufacturing capacity is set to rise by 25-30 percent thanks to new factories and expansions taking place at various places in North India. Punjab, Haryana and Uttar Pradesh shall witness beginning of around 150-200 new units within 2018 which will certainly flood over the market compared to anticipated demand. The pressure on sales will push the market towards “Buyers’ market” hence there will be a drop-in price of finished goods specially after May 2018.

The plywood production capacity in Haryana alone is about to witness an increase of 35 percent during 2018. The numbers will further blow up after freeing up of license in UP, hopefully in January month of 2018 itself. The addition in number of factories in UP will take time but would create a pressure build up on existing establishments involved in distribution and manufacturing.

The small and mid-segment factories will have to spend more to sustain in the growing competition during 2018 and 2019 because of huge flow of plywood, boards and doors in markets. Those who are entering in plywood manufacturing with a notion of decent profit-making sector will confront the reality by 2018 year end.

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