Despite strict lockdown, we seem to be getting back on pre-covid levels with speed. Till August 4th week, demand was surprisingly good enough for plywood manufacturers to operate at 60 to 70%. Demand in Aluminium composite panels, MDF, Laminates etc are driven by healthcare, industries and warehousing segment apart from home renovation and strong recovery basics. Office spaces and Retail interior have been hit hard but it is certainly a temporary (6 to 9 months) phenomenon.
In the beginning of July 2020, I believed that demand for plywood, laminates and MDF is largely coming from pent up demand and curious stocking by trade. But our field surveys in various cities clearly indicates, that inventories/stocks are not that high, which use to be in pre-Covid period and orders are actually against sales. The branded companies have not offered any discount yet they too have higher than anticipated recovery in demand. The Rural India, Tier 2 cities and ‘Home improvements being done by many works from home professionals in metro cities’all these factors have led to better consumption trend so far. However, metro cities are still struggling with merely 40 to 50% of the pre-covid levels, means demand is indeed impacted in all four metros including the next ranked mega cities.
With opening up of markets, fresh hiring, marketing efforts, expansion plans and visible BTL activities have started too in wood panel sector. Furniture manufacturers too are confident of their order books. Enormous effort is being put by the entrepreneurs across the category reciprocated by orders and payments,which is clearly indicating a faster than expected recovery trend in laminate, plywood other wood panels category.
With each passing day, Government is opening up the restrictions and allowing movements. Transport and travel is resumed which will instantly help to revive the demand in metro cities too. With opening up of markets, fresh hiring, marketing efforts, expansion plans and visible BTL activities have started too in wood panel sector. Furniture manufacturers too are confident of their order books. Enormous effort is being put by the entrepreneurs across the category reciprocated by orders and payments,which is clearly indicating a faster than expected recovery trend in laminate, plywood other wood panels category.
So far, markets are found to be operating at 55 to 60 percent for all most all products which is very much on the same lines of what experts and pioneer of our industry told during Ply Reporter’s webinars. It is indeed true that recoveries are undoubtedly faster by at least a month. I am hoping that by Deepawali time, there will be 50 % industries who will be operating at level of 100 % to pre-covid time and rest reaching to 70 to 80%.
I feel, owing to significant job losses, destroyed tourism and poor hospitality sector and weak commercial office segment, the domestic market is bound to be hit though with some new fronts speeding up like healthcare, industries and Work from home improvements will nullify some effect. I think, the domestic volumes and turnovers will be down by 20 to 30 per cent in FY 2021 for wood panel companies.
Revival for housing demand is vital for interior and furniture sector growth. We can see a further uptick once revival of Indian economy starts and prospective home buyers feel secure about their jobs. With a huge population equalling to China, and demand still at merely 10percent of China, there is no denial to the fact that India is going to consume big. Covid has been a stopover but India will be back to its best sooner than expected.Hence, I am sure, once vaccine is launched and some negativity related to border skirmish is over, in next few months (may be 2 quarters), India will be back on growth path. Till then, the road to recovery belongs to daring marketers and ambitious individuals.
Pragat Dvivedi Founder Editor
Mail to “dpragat@gmail.com”, ( M) 9310612991.