The entire business circle in Indian wood panel industry is curious to know the reason behind MDF demand. Is it replacing market of plywood? Is it creating a new market or its import factor? The wonder factor behind MDF sharp growth is actually happening due to one and only one reason, growing supplies from domestic manufacturing. Around 20% of MDF supplies had been fed by cheap imports which dried up eventually when sea freight gone up three times. The pent-up demand added another 15 to 20% growth supported by every article demand shooting up. A cumulative total filled up the excess capacity in MDF, that was literally idle since a year.
Today Capacity vs Demand equilibrium is in balance and the growth prospect created by HMR (High Moisture Resistance) grade has opened up a new horizon for MDF manufacturers. I never thought before, that ‘Action Tesa’ initiative of HDHMR will become a trend setter for the entire wood panel segment. In building material industry, examples like Action for HMR grade, Merino for MR Tuff, Century ply for PF and Virial, Green ply for Calibrated Quadra, Alstone for WPC etc are beautiful examples that proves that quality and hunger to give new product with changing needs can be huge growth driver for a brand.
This budget is certainly a booster shot, which will be evident with speedy growth. I am able to foresee around 16% growth in calibrated plywood and particle board, around 12% in Decorative laminate led by lower than 0.8 mm. Growth above 20% in MDF and stable outlook in decorative veneer category is expected this year. The next big growth is coming in Furniture and that will support every raw material supplier if he has created a healthy ecosystem for his company.
After Budget, the growing positivity in markets is helping the producers and traders to expand the product variety and network. The raw material prices are still high but selling prices have also increased hence industry and trade are upbeat. Manufacturers are filled with orders again after a dull phase of December and January. Payments are again slowly coming with increasing supplies and hopefully by May 2021, India market seems to be catching up like before after forgetting Covid memories.
Post Budget of 2021-22, what looks imminent is huge possibility of building material consumption with growth in construction of new highways and public facilities because government is committed to spend big with huge capital expenditure. Healthcare, Railways, Education, Warehousing and booming Industrial growth are going to be immediate demand drivers. Ambitious and visionary entrepreneurs will identify opportunities and take bold moves will create our stories for sure. This budget is certainly a booster shot, which will be evident with speedy growth. I am able to foresee around 16% growth in calibrated plywood and particle board, around 12% in Decorative laminate led by lower than 0.8 mm. Growth above 20% in MDF and stable outlook in decorative veneer category is expected this year. The next big growth is coming in Furniture and that will support every raw material supplier if he has created a healthy ecosystem for his company.
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