I Hope That By Next Year the Situation in Yamunanagar Will Start Improving with Softer Prices of Timber - Mr. Ashwani Agarwal, Director, Star Plywood

person access_time   5 Min Read

Mr. Ashwani Agarwal is a visionary business man, and known good acumen in industry. He is one of Directors of Star Plywood and Star Laminates group. He has also partnered in manufacturing of Craft Paper of laminates in Yamunanagar, which will start its commercial production within couple of months. During an interview with the Ply Reporter, he talked about present and future scenario of Yamunanagar based plywood and his next plan for laminates expansion. Excerpts.

Q- How do you see the scenario of plywood manufacturers in Yamunanagar?

A- The scenario is not so promising as margins has dropped drastically, price of finished products have not increased with rise in timber & raw material prices. The overheads have increased but plywood manufacturers are not able to pass it on to customers due to over production for which manufactures are themselves responsible too. Distribution of new licenses in Haryana is also to be blamed for high production volumes. Licensing process in UP is also temporarily on stay, but we are not sure that it will be passed or dismissed. At present, plywood rates are offered very low which is not a viable level to survive, if it is really full core. Dealers are not sure about what is inside, it is full core or phalli, where as if we make quality plywood then we can get only Rs 2 to 3 extra which is far low and many other costs are not being calculated. To cover up the margin people are in race to grow volume which is already on over production situation.

Q- What will be Poplar prices in future?

A- During winters, timber weight has increased adding further burden on pricing. I think the price of poplar will sustain at present level. In rainy season there is obvious trend of increase by Rs 30 to 60. In next one-year things will be stabilized and prices will stay on those levels. This particular year new plantation means the effects will be visible in next three years. I hope that by next year the situation in Yamunanagar will start improving with softer prices of poplar.

Q- What basic quality difference you observe in plywood made at Yamunanagar (Haryana) and Punjab?

A- Punjab based plywood manufacturers are able to sell at lower price with reasonably good margin. Yamunanagar is also selling at similar price but there is a difference in quality as their thickness is not perfect and the face quality also comes lower.

Q- Which are the states Star has gained good presence? Do you have any plan for expansion in laminate and planning to cater export opportunity?

A- We are doing well and have presence across the country with high penetration in Maharashtra, Gujarat, UP, Andhra Pradesh, Telangana and Tamil Nadu. We have plans to expand the manufacturing capacity under same operation by installing two more presses and I hope that export will also be our area of operation but at present the focus is on domestic market.

Q- In distributor model and ready stock there are many problems at present; what is your opinion?

A- In decorative laminates, the problems arise only when the product is not getting sold and the competition start with distributors. Then distributor tries to get that materials lift back to the manufactures. The second reason is inability of offer quality service to the distributors. At Star, we are working with more than 100 distributors and sub distributors across the country.

Laminate is a fashionable item; they will have to show their specialties, but plywood does not have such freedom to present them. Laminate also get advantage of being a design product and even its small presence in the market make feel that branding is very good. Selling Yamunanagar plywood with high branding effort is not an easy task.

Q- In distributor model and ready stock there are many problems at present; what is your opinion?

A- In decorative laminates, the problems arise only when the product is not getting sold and the competition start with distributors. Then distributor tries to get that materials lift back to the manufactures. The second reason is inability of offer quality service to the distributors. At Star, we are working with more than 100 distributors and sub distributors across the country.

Q- Many factories run on liner grade laminates and many of them say that they will never manufacturer liner grade material? What is your opinion on this? Which thickness is performing well?

A- It depends on the financial capacity of that person and his hard work along with his skill to manage their clients and move ahead with market forces. If one has the capacity then he can go to designer segment else stick with liner grade.

Every segment is good and performing well with their target segments. Each segment has their own selling capacity as 1mm does not attract volume sales so its margin is different and 0.8mm sales more so in this segment margin is less, liner also observe much larger volume so its margin is also less.

Q- As an entrepreneur which one either plywood or laminate is closer to your heart?

A- Both are close to me, like fingers in hands, some are big and some are small but I cannot differentiate them in terms of likings. Each one has its own importance. Similarly, between both the product segments I cannot differentiate them in any way.

Q- In terms of growth potential which one is better for you?

A- At present, plywood segment there is less growth and its potential is also a bit slow for nearly two years, what I feel. But, I think laminate is going good due to its volume sales. If we manage to obtain that volume in plywood that would also be profitable to same level.

There is over supply in both the segment but many players have converted to exports, so I don’t think that there is much pressure on manufacturers for their volume consumption. Plywood sales is also there but as the production gets double due to increasing number of factories in different parts of the country, the pressure is on sales at present. I think it will see realization with time in a year or two.

Q- What message do you wish to give to your dealers who want to grow with you?

A- The message for them is to continue maintaining their trust with company and we are committed to offer them quality with innovation. We assure them that they will get better growth opportunity ahead as our efforts will be to improve at all front altogether and achieve new heights. We will offer them quality and innovative designs in laminates. In plywood segment, the same will be observed. They would not have to face any obstacle in sales with our innovative quality offerings. We have long association of over 15 years and same trust will continue ahead.

Q- Laminate sector is more organized than plywood, why?

A- Laminate is a fashionable item; they will have to show their specialities, but plywood does not have such freedom to present them. Laminate also gets the advantage of being a design product and even its small presence in the market make feel that branding is very good. Selling Yamunanagar plywood with high branding effort is not an easy task.

Q- Do you see any threat to plywood from MDF-PB ?

A- The competition will increase and in the country like India with diversified culture, thinking and observation not everybody will like MDF, Particle Board and other panel products, so Plywood will continue, what I think.

shareShare article

Post Your Comment