High Inventories in Markets is a big Dampener for Laminate Industries

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Decorative laminates industry and trade has taken a hit due to Covid lockdown. Low payment receipts and poor lifting of 1.0 mm and 0.8 mm decorative range materials is evidently hitting many laminate producers very hard. The inventories are so high, that in case of 70 percent of the stockiest, the stocks are running as high as 8 times of their present sales. According to Industry sources, around 10% of the outstanding has been received during entire lockdown period till last day of May month. During a webinar of Surface Reporter magazine, Mr. Saurabh Mittal, MD, Greenlam Industries Ltd said, “As the markets are opening everyone’s accounts are overdue because practically since last 40 days the collection is zero for everybody. So, this is a challenge for all and we have to collectively reviving the business.

The Ply Reporter’s analysis has been pointing out since a year that, laminate sector is facing the biggest challenges due to huge inventory of stocks in market at distributor’s points and company’s depot places. On an average, it is widely accepted by numerous manufacturers and industry stakeholders that ‘Laminates stocks are piled up by more than 6 times of the monthly sale of laminates in India, specially in 1 mm categories. With increasing number of plants and spike in production of 0.8 mm, there is a buildup emerging in this thickness category as well. The month of May witnessed a demand in liner sheets largely driven from rural areas.

Numbers received from the industry people, mid segment, decorative laminate plants have started production during third week of May and are running at an average of daily 8 hours basis or barely one third of their capacity. The organized laminate players are reportedly operating at 40 percent, thanks to a stable demand coming from export markets. The leading players in decorative laminate sector namely Merino, Greenlam, Century laminates, Stylam, Virgo etc begun manufacturing during first week of May itself. It is also reported that organized laminate brands have received better response in payments compared to mid-sized plants. It is anticipated that June will witness starting up of more laminate plants thus may witness a price drop, if dullness continues.

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