Decorative veneers demand seems to be picking up slowly after a very lean phase during January to March. With the flow of work in commercial spaces, offices, restaurants and clubs, individual renovation of apartments and hospitality sector there is optimism among retailers to come back to normalcy. The interaction conducted among top 30 veneer producing companies, it was observed that pick up in demand has brought the production levels closer to same where it was before November 2016. However, the lifting of high end luxury grade veneers ranging beyond Rs. 300 are still struggling but the customers are back, who ask for Rs. 100 to 200 range veneers. The companies, suppliers and retailers specializing in wood veneers were affected after demonetization that led to stock pile up and curtailed demand. Retailers from Mumbai, Pune, Hyderabad, Delhi etc confirmed the improvement and lifting of decorative veneers in April month. The charm of smoke, silver, metal and other innovative veneer have maintained but influencers are not daring to suggest high end premium price range veneer to their customers. Retailers hope the better days ahead for veneers demand, however their margins may reduce.
Decorative veneer sector has reported to hard hit after Demonetization, and pick ups reported to drop by 35- 40 % during last quarter of FY 2017. The natural teak and imported teak sales also witnessed a fall during Jan-March, but are coming back to normal now. In April, veneer manufacturers touched 90 percent of the sales they had before demonetization. The veneer manufacturers are of view that in another 2 months the production of natural veneers will improve to normal as there are new queries for the material from even small town retailers now. States like UP, Rajasthan, MP and Gujrat are showing a keen interest and ordering material where Decorative Laminate sheets dominate the uses.
It is noted that decorative natural veneers have been the fastest growing surface décor product since last 4 years due to innovations, charm of exotic products, exclusivity, entry of new retailers, and emergence of showrooms and displays. The craze of getting high profit margins is also one of the driving factors but DeMo effect has diverted the economics of such wonderful surface material.