Turning Points of 2019 - UP Plywood Industry: New Licenses face uncertainty

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On the 12th December 2018, the UP Forest Department, through the e-lottery process declared, issuance of new licenses of the woodbased industry in Uttar Pradesh. As per the notification, UP government announced to issue a total of 815 licenses for wood-based industries in the state which included 90 – Veneer Peeling, 76 – Veneer + Press, 5 – Particle Boards and 8 – MDF & Particle Boards. The announcement of new licenses in UP created a buzz in the entire wood panel and plywood industry, with talks about how the UP plywood industry would now give a tough competition to Yamunanagar and Punjab. The new wood-based industries were expected to increase the net demand for wood and timber hence benefiting the planters and local wood-based industries alike. The new licenses would also witness the emergence of particleboard and MDF plants in the state thus competing with neighboring state Uttarakhand in the next two years.

Announcement of new licenses, excited machinery manufacturers and suppliers who rushed to UP, calling and meeting people and within a month were also receiving sufficient orders of Hydraulic presses, Peeling machines, Boilers, Driers, Veneer Core Composer, Sanding Machines, DD saw, Forklift etc. The industry entrants waited eagerly to know about the time period of delivery though they were not sure about how long the necessary paperwork will take. Machinery suppliers opined that everyone wanted shorter delivery time, and they were ready to pay extra for this. They began enquiring about Chinese hot presses to avoid delays. As per the report, there were more queries of Press and Peeling machines on an urgent basis and sources confirmed that approximately 150 machines for the different purposes had been confirmed yet.

However, the second half of the year, casted dark shadow over the new wood industries licenses in UP with a group people approaching the NGT (National Green Tribunal), and claimed that the issuance of new licenses has violated the norms because the state does not have sufficient stock of timber against releasing these new licenses. NGT queried the same to the state forest department and the issue is still pending in court. The awaited wood industries licenses verdict may be the biggest turning point of 2019 because there are a lot of investments done in by investors in civil work, and advance for machinery. The stake of state government is also challenging because they had promised farmers and planters that it will benefit them and they would get better money in plantation timber.

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