Interview with Mr Rakesh Chandna & Mrs. Geeta Chandna Director, CP Veneers

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The decorative plywood industry has a long history in India. There have been so many brands and players in South India followed by players in East and West India. The North India is largely considered a centre for commercial plywood. Although in decorative veneer industry too, North India based plywood players have made their names. The Ply Reporter spoke to Directors of CP Veneers, who are the first movers of decorative veneer ply manufacturing in North India before year 2000.

The eager and hungry for high quality and exclusive decorative veneer search, CP Veneers' owners Mr Rakesh Chandna and Mrs. Geeta Chandna travel to on an average 20 to 30 countries in a year. They spoke to the Ply Reporter about various issues that decorative veneer industry and trade going through. Being a knowledgeable decorative veneers expert, their views are worth reading for everyone who takes interest in veneer industry and trade.

Q. Rakesh ji, Wood veneer manufacturing is a commodity business or something different? There a lot of competition is being seen, what is your comment?

A. The decorative veneer plywood manufacturing is like a business of gold, silver and diamond. It is a work of people with knowledge and experience. As you know, a precious gem can be identified by a Gem Expert only, the same way it’s with veneer. As the diamond cannot be sold by anyone; veneer also can’t be sold by everyone. Sometimes, I feel that the Gems must be appreciated and decorative wood veneers are like precious gems, it needs to be adored. It’s simply God’s creation, shaped by humans, facilitated by veneer manufacturers like us. The wood veneer command a great respect and is adored in countries like Europe, US or even in countries like China etc, instead of comparing all the time on values with cheap copy or inferior substitutes. So it has nothing to do with competition instead it is more related to - who are buying veneer and who are selling it to them? Whether it is a manufacturer or a veneer Retailer, he has to sell it with belief and like an art, like a precious gem. If some one is doing it for volumes then he is not having the fun and essence of decorative veneer business.

Q. Can you please explain the last line again?

A. This is not a commodity item. If we had been involved into commercial trading we would have earned better than this. It is for high end special choice and special purpose which require manual intervention. Those who want to observe it like commodity will not be able to work with it whether they are manufacturers or traders. They will get tired of it sooner than later.

Q. So what are things a decorative veneer business player shall know and keep in mind?

A. Suppose anyone ask for veneer matching with sample in his hand, the traders can get it from China. But even in China, which is considered as cheapest place to source veneer, they will demand premium of 3 to 4 times for 'Sample matching veneer' if they will come to know that you have to buy a matching veneer. It is because even Chinese who are known for making cheap knows the tricks and fun of decorative veneer importance. Today India market is so confused, unclear and vague that to make the customers understand or get him selected for his choice; we will have to show him a large number of pallets of veneer. If we fix the price in the beginning they will not move ahead, because they want to select their choice, but want to pay the general market price. So, in this business any trader who does not earn margin will get tired of it easily and ultimately fails in the business. In my opinion margin does not mean extra profit, but for sustainability it must be compensated to the work load.

Q. How is the present market scenario for decorative veneers?

A. Honestly speaking, the market has become crowded with people but the sad part is people are trying volumes. Already lot of manufacturers have joined thinking that there is margin but they will come to know after a while when stocks will start mounting. The decorative veneer business requires much more stocking and there are very few retailers who understand the quality and stocking mantra. Lack of knowledge on that front is affecting the market. Secondly, overall every industry is somehow witnessing slow movement these days that is also affecting the veneer sales. Today commercial plywood market is also very slow, corresponding to that, veneer sales are also down.

Q. What is your opinion on ‘teak veneer’ demand? Is it growing faster as heard?

A. Yes, teak veneer market is expanding hence it looks that there is growth. We will also opt for Teak veneer range on the expansion of infrastructure which is going on these days. Under this initiative we will add capacity by upgrading the infrastructure, machine installations and doubling the area from present 1.25 acre to 2.5 acre. Today Teak veneer demand is higher as every now and then customers ask for it. This is happening due to just customers' choice towards a bit cheaper option for veneers.

Q. What is your target goal for next three years?

A. Being a decorative veneer player, we work with not much of the targeted numbers. We are just doing our job and the work is going on well on those lines. Of course we have a target at present to come up with 'Teak veneer'range and increasing the production capacity by another 10, 000 sheets a month. But, we are making sure that our high end offering does not get affected as by moving ahead with cheaper grade. Our priority is to be committed for the high end veneer segment. Our objective is to spread customer education for betterment of the industry and growth of veneers.

Q. How a dealer should approach to increase customers’ awareness?

A. When we bring ‘A’ grade veneers, we fail to convince most of the buyers, because the market is covered by ‘C’ grade and there is no customer awareness about the grade and its benefits. Hence the customers do not readily pay for the ‘A’ grade price because dealers do not think this a priority instead they run behind price. ‘A’ grade veneer, bear different level of cost for process and grade. Also the output of A grade veneer is lesser than other grades and dealers need to consider such things.

From a log, we can get only 15% ‘A’ grade veneer, then come ‘B’ grade in tune to 20 - 40% and rest volume is obtained ‘C’or D’ grade. The sellers of ‘C’ or ‘D’ grade, cannot sell ‘A’ grade veneer. This is the reason why the traders have pushed ‘C’ and ‘D’ grade more. We have pain that if we bring ‘A’ grade it does not attract sales. In other country like Europe, China, people have better understanding of grading of veneer.

Q. What is the actual definition of these grades? How the dealers/traders can define it?

A. If anyone buy wood from Yamunanagar, they must know these grades of wood. In commercial face also they are well aware of grades. Being a commercial involvement they understood it earlier. But, in decorative segment it is coming up slow. Today even manufacturers are not much aware of it. We are deeply affected of price war; for example Walnut veneer is Rs 80 / sq ft, if in the same specie we bring 'A' grade it does not attract sales. People are concerned of just the species and its rates. That is why for many international supplier, India is considered as Lower end market but I see no point in this, because there are consumers who pay but the retailers need to grow up, mature up.

Q. How a trader can move ahead if they trust you and believe that the quality is very good? How they can convince their customers?

A. I am also stating the same that there is a lack of education and awareness among customers. The knowledge of grading is must from top to bottom. I am sure, the high end architects in big cities like Mumbai there are some buyers who ask for quality. They are well aware of it but there is need to spread it all over. If we increase awareness to that architect level across the country the quality product sales would be greater. The manufacturers will have to create faith in their business. That is why I say 'decorative veneer business is like selling gems. It is wood gems.

Q. What is the solution to obtain correction in the system?

A. Even we are clueless! I think if the manufacturers do not educate their channel partners and channel partners to their customers, the system will not improve. First of all the manufactures should venture into veneer after being well learned. If at higher level, the slicing starts the grade will be automatically separated.

Q. What is the trend prevailing these days in veneer applications and its uses?

A. These days every trend is there or I can say don’t really know. A while ago, it was metallic veneer but today dyed veneers have come up and people are liking it. In coming time it will also witness a fall or gap. The gray is expected to move more because its uses and application are growing. It will be interesting to bring in variety and range in this.

Q. Why CP Veneer doesn’t come up with two segments as ‘branded’ and the boutique’s ‘designer’ veneer?

A. We will do it in later days. We are not in designer mode neither can adopt that as we have the concept to work for quality and obtain total customer satisfaction. We neither change our dealer nor the working style. Neither change the grade to make it cheaper, if you purchase cheaper you will have to face problem next day.

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