Cheap Import, often become part of dumping because the manufacturers based at different exporting nations, keep prices very low with the help of the respective government subsidies, fascilities, other incentives and even some trade manipulations. Laminated HDF flooring is one among such products, where imports from China dented the prospects of Indian laminated flooring manufacturers. The HDF flooring market has been so much hurt by cheap imports from China that it has badly impacted the enterprenursip fire among producers.
In laminates and plywood segment,India attained self manufacuring driven consumption decades ago. Though during 2009-10, the decorative laminate sector demanded anti dumping duty intiation from India Government on laminate imports from China and it helped to stablise the Laminate manufacturing here and even helped the rise of India produced laminate spreading to all across the globe. In areas of MDF and Particle boards, India now looks towards domestic manufacturing brands which was earlier dominated by imported goods. The offered price on imported MDF and particle boards items were frquently offered with a huge price gap that never allowed the domestic industry in MDF and particle board line to grow.
During a period of 1996 to 2008, despite of few dometsic industries trying to create their own market in competetion to large imports, nothing happened untill government supported the domestic industry with some anti dumping measures. Today MDF and particle boards industries have almost reached to holding up 85 to 90 % of market share in India. A similar efforts are being made in every related product in furniture and furnishing segment off late.
HDF flooring is a wonderful product and highly suitable to Indian households because it is a hygienic, economical and userfriendly interior material, and above all it is abundantly produced by Indian manufacturers. It deserves to be under furniture category and needed to have maximum support by India government to make ‘Atmanirbhar Bharat Abhiyan as successful Initiative - Mr Ajay Agarwal, Managing Director, Balaji Action Buildwel
The market size couldn’t grow for HDF based Indian flooring as most of the Indian manufacturers use MDF board which absorbs more water so complaints related to products swelling, misalignment and durability issue can be seen more. HDF boards being good in density absorbs less water more durable, needs less maintenance and cost efficiently longer run. Not educating customers on quality is also another major concern area which never allows to grow this category as a whole. The imports keeping low price and quality seconds are also a reason which didn’t allow laminated flooring to grow in Indian market. And low business size couldn’t attract big business houses to explore this category and invest. - Mr Shekhar Sati, Sr. Vice-President (MDF), Greenpanel Industries Ltd
Operating production capacity at very low levels although all Indian manufacturers are producing qualitative laminated flooring is vulnerable. Indian demand - supply can be satisfied by all the three manufacturers Surya Panel, Action Tesa and Green Panel. All of them are performing average 15 percent against installed capacity due to cheap and low quality import from China where big buyers jumping for large projects in Indian cities. There is acute need of call from Ministry of Commerce and Industries, DGTR, DIPP and Ministry of Finance with support of Customs to restrict import, imposing Antidumping duty or making BIS mandatory on laminated flooring as part of making India and Atmnirbhar Bharat.- Mr Rushil Thakkar, Director, Rushil Decor Ltd
GROWTH PROSPECTS IN HDF FLOORING SEGMENT
But the promising ‘HDF Flooring segment’ is still being hit by cheap imports that needs curbs. With local factories producing MDF and HDF and large establishments of design paper units in the country, India has prepred a solid base for domestic producers of laminated flooring materials. It is a proven fact that India holds large market and growing workforce people who are the consumers. Today growing middle class and increasing demand for housing for Indian households is very adoptive to uses of laminated flooring in their resedences, apaartments and offices. A large part of this material supply is being fed by imported laminated flooring which could be very well fulfilled by domestic manufacturing units if some policy changes are considered.
Laminated wooden Flooring is now a days a furniture item just like table, wardrobe, office furniture etc as no working is required by the ultimate customer after purchase in furnishing same way no working is required in Laminated HDF Flooring except the installation which takes no time. The Modern Furnishing is not complete unless the matching Laminated HDF Flooring are installed with the furniture, it is very convenient to install less expensive, with no health hazards which was a major risk attached with carpets in Indian environment.
Amidst Covid crisis and growing assertiveness of China towards India’s interest areas, Our country is looking at many challenges but equally at many new opportunities too. The Central government is trying to support and enable SME and MSME sector so that dependency on China can be turned in to self dependent manufacturing country. The unlock is also opening up new opportunities and fresh perspective to explore the maximum possible areas, where India can grow smoothly with domestic manufacturing. Moving forward to explore many other imported goods and items, The ministry of commerce and other departments have started engaging Industry groups and other stakeholders in the field of wood, timber, furniture as well because it is greatly riddled with impored items.
Since India policymakers are considering furniture industry as a bright prospect area to support local production, the laminated flooring could very well be a part of the same because this is also made of wood residues. The Laminated HDF Flooring industry which is also a kind of furniture but falling under different (HSN 4418) is facing the huge imports at cheap prices from china, Indonesia, Malaysia, Vietnam and other SAFTA countries. It is known that most of the laminated flooring manufacturers, comes under MSME category and some in large category. The main raw materials for laminated Flooring are High density Fibre Board, decorative paper and glue etc.
THE DEMAND OF IMPOSITION OF BAN ON IMPORTS OF LAMINATED FLOORING
Recently the laminate flooring companies also presented their request for imposing restriction on laminated HDF flooring at par with furnitures to Ministry of commerce. So that domestic manufacturers can have a support in market from cheap dumping of materials. The manufacturers also demand that ‘laminated HDF flooring’ must be treated like funriturecategory product. Their major submission actually make big sense because in flooring planks, there is no other work except laying and installation, very similar in the case of furniture where no working is required by the ultimate customer after purchase for furnishing.
Some key points raised by the group of HDF Flooring manufacturer are listed that certainly need an urgent attention. As the main raw material for manufacturing HDF flooring is HDF Board and there is a huge investment in manufacturing HDF/MDF Boards in India with huge capacities. There is very much under-utilization of capacities causing hardship to the industry as the huge investment is blocked.
World over the 30% to 40% of the HDF Board capacities are used in manufacturing HDF Flooring whereas in India only 5% to 7% capacities are utilized for Flooring.
It also believe that there is huge potential for export to USA, Europe and south Africa as Indian flooring producers have technical knowhow and the Machines used in India is at par with other leading players.The huge investment in HDF Board manufacturing will be utilized for Flooring with value addition Machines for manufacturing HDF Flooring with low investment as the machines for manufacturing Flooring from HDF Boards are not so costly.
In a letter submiitted to ‘Directorate General of Foreign Trade’ mentions, requesting for imposing restriction on import of Laminated HDF Flooring (HSN 4418) as is being proposed for Furniture as Laminated HDF Flooring comes under the category of furniture but with different HSN.
The domestic industry is operating at about 15% of the installed capacity and the huge investment is unutilized because of these cheap imports. The government have proposed for restricting the import of Color TV ,Tyres, Sports goods , toys and also proposing to impose restrictions on Furniture as the Laminated HDF Flooring also falls in the category of furniture with different HSN.
The major raw material for HDF/MDF boards is Eucalyptus /poplar type of plantations grown by farmers under agro forestry projects all over the country in nonforest areas that results in increasing of the forest cover of the country and helps in achieving the objectives of National Forest Policy. This also helps the objective of doubling of farmer’s income in India. All the species consumed by industry are renewable crop.
As against the Eucalyptus/poplar grown by farmers are used in manufacture of HDF boards Whereas in China PR, Malaysia, Indonesia they uses Rubber wood which is BY- PRODUCT in these countries as and when the rubber tree stops giving rubber it is waste as the same cannot be burnt due to Environmental pollution so the same is used for producing MDF/HDF. Their government encourages use of waste rubber wood by these industries and provide the same at very lower price which is about 1/3rd of the price of eucalyptus/poplar wood Therefore, the cost of production of Laminated HDF Flooring is very low in these countries and the same are dumped to India causing hardship to the domestic industry.
According to study by the ply reporter the HDF/laminated flooring market stand around 625 crore annually. The HDF manufacturing association also considers the growth and level of acceptance among consumers in Laminated Wooden Flooring in India. With a CAGR of about 15% in laminated flooring segment, there is a big share is captured by unorganized importers where majority of material is coming from China.
The domestic industry has the production capacity to meet the domestic demand but due to cheap imports from China, Malaysia, Indonesia andVietnam the production capacity of domestic industry is running at 10% to 15% of the installed capacity which is much lower than the break even so the domestic industry is suffering losses. The domestic industry has made investment of about 150 cr. There are three manufacturers in organized sector. Action Tesa ,Greenply and surya panel and others are in unorganized sector .
According to data’s gathered and estimates done by the Ply Reporter, there are 3 HDF manufacturers are selling HDF flooring in India namely Action Tesa, GreenPanel max, Surya. The three players combined holds hardly 5 to 6% of market because of cheap Chinese import. There is also a strong presence of good brands from developed countries like Egger, Pergo, Euro floor, Tri square, square foot etc in different regions but quality product share is far below than what it should be. According to estimates, there are around 150 lac square meter material being sold in the country of which 85 % is imported at such a price that would go even below the cost price.
It is claimed by the Indian manufacturing companies that ‘Cheap quality of the Laminated HDF flooring is being dumped into India with inferior quality of Wooden/HDF flooring into India which are AC-3 quality which are not water resistant and also do not pass the abrasion test whereas Indian manufacturers are making AC-4 and AC-5 grade which are water resistant and are high abrasion resistant. The self-life of imported Laminated Flooring is very less than the Quality given by domestic industry.
HDF manufacturer’s letter mentions that ‘to fulfill our PM vision of Atmanirbhar Bharat (self-reliant India) for making India a self-reliant nation with his call for being “Vocal for our local Products and making them Global”
The HDF flooring manufacturers says that, flooring business is a labour intensive industry with great potential for employment generation with Direct and indirect labour. Their presentation requested that DGFT may through Notification, impose restriction on import under FTP as is being done for color TV and proposal for the same for furniture industry ,as Laminated HDF Flooring is also falls in the category of furniture with only different HSN so same be treated at par with furniture.
The HDF manufacturer’s letter mentions that ‘to fulfill our PM vision of Atmanirbhar Bharat (self-reliant India) for making India a self-reliant nation with his call for being “Vocal for our local Products and making them Global” we as an association need support to compete with China, Indonesia, Malaysia, Vietnam and SAFTA countries and make India self-reliant.
The HDF flooring manufacturers say that industry will be able to survive only if restriction be imposed for import of Laminated HDF flooring as is being done for Color TV and proposal for imposing on other non-essential items goods including furniture with aim to promote domestic manufacturing and achieving the goal of Atmanirbhar Bharat (self-reliant India) and “Vocal for our local Products and making them Global”.