Rising timber prices in Northern India has created havoc in plywood industry, and everyone has started analyzing their input cost and profit margins with increasing cost of core veneers. Our Yamuna Nagar correspondent reported that the most of rented plywood manufacturing units have begun shutting down their operations on short notice. The lease holders are calculating the manufacturing input cost against selling price of finished goods and are exiting the line.
A Plywood producer, who is presently running a plywood unit in Jagadhari, said to Ply Reporter correspondent that they would run this factory on present rented price, and he asked the company owner to reduce the rental price with immediate effect otherwise he will run further, because he will survive at present price cost due to increasing timber, formalin and phenol prices. He says that if the company reduces the rent cost, then he may start operation. Another Plywood Producer, based in Khajuri Road, said that if the prices of finished good will not increase, it will difficult to survive the rented price. He presently closed the operation and waiting for price increase of finished goods, he supposes to implement during the middle of September month.
It is noted that in Yamuna Nagar alone, there are more than 2 dozens manufacturing establishments are running on rented basis, and more new units are setting up, for the purpose of giving rent, but the present escalating prices of timber along with other raw materials has brought down profit margin of plywood makers and it seems difficult of those entrepreneurs, who are running operation on basis of monthly rent.