Factories in North are Facing Closure

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The plywood industries in North India, are facing the worst phase of their journey since inception. The plywood manufacturers are fighting on multiple fronts at this time. Rising timber prices, quality of logs, drop in orders, poor payment recovery and lack of good and efficient team members are few of the vital weak spots that North India based units are facing. On the top of it costlier admin and marketing cost, billing and taxation compliance and negligible banking support is making the time very tough for many partnership driven firms who runs on low capital and low margins. The scenario is so tricky that many of the units in North are looking for ways to stay afloat by bringing in partners or offering units for sale.

The scenario in Yamuna Nagar is said to be on same lines because there are maximum number of units who do their costing maths in the Financial Year end. According to local sources and timber merchants around 50 units are facing uncertainty on their survival where as a dozen of rent based plants have already handed over the key to the principals. The plywood units are suffering only because the operating margins for the plants has dipped to minus levels due to rise in Raw material cost and un favourable response from market.

If industry veterans and industry insiders are to be believed, the plywood industry in North will be facing more difficulties with rise in new plant capacities in Uttar Pradesh and South India. It is also believed that post election, tougher GST compliance, stringent pollution norms and stricter labour welfare rules will further suffocate the unorganised industries.

There have been repeated calls by various association to collectively implement price rise implementation that has bear some fruit but it is not enough. The Ply Reporter anticipate that mid sized or semi organised units with highest work efficiency are going to be the winner in tough times.

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