Voices from North India Post Covid 2.0

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Ply Reporter's e-conclave Voices from North India – post covid 2 powered by TANISH - Design for Décor organized on 25 May 2021 was live on Ply Reporter Facebook. North India has been instrumental in driving wood and panel business in India. Whenever there is a setback, North India’s entrepreneurs are seen proactively working to come over any crisis. In plywood it has presence of over 75% and in laminate approximately 50% with considerably good improvement in last five years. In MDF also it plays an important role and WPC, PVC laminate and edge band tape in every segment North India plays an important role as a driver of the industry because a large volume of supply is going on from this region. It would not be wrong if we say that north set a trend and decide the rate.

The panelists included: Mr. Sanjay Garg, Chairman, SRG (Sumitra Rajkripal Group); Mr. Manish Kedia, Director, Amit Decorative Pvt Ltd BHUTAN TUFF; Mr. Bobby Verma, Director, Amazon Wood Pvt Ltd; Mr. Gopal Bansal, Director, Savitri Woods Ind Pvt Ltd; Mr. Amit Goel, Director, GMG Plywoods Pvt Ltd along with Mr. Pragath Dvivedi and Mr. Rajiv Parashar from The Ply Reporter magazine.

ON IMPACT ON BUSINESS POST SECOND WAVE

Mr. Manish Kedia,: The activities in May were complete down as the market was not open anywhere. Although the Government has allowed continuing factory operations everywhere except in the city area. We were operating regularly but due to labor and raw material scarcity the production capacity was down. In May the demand was low but in the last week of May the movement was good. India is a vast country with huge population so despite of huge loss in recent lockdown it will recover soon. In a month or two the situation will be on track.

Mr. Sanjay Garg,: The lockdown impact on big cities are visible but in rural market the work continue so the nearly 40% demand was there in May also. We are expecting over 100% demand if the market opens from June onwards because the stock inventory was continuously going down due to slow movement of market in last two months. So, the losses occurred in last two months will be recovered till August.

Mr. Bobby Verma,: The demand is inevitable due to backlog in last two months. Only concern is that the supply chain has disturbed as the chemical demand is not being meet and the prices are going high. If we see the scenario of production in wood panel industry, it was nearly 30% because everyone has cut it by 50% and some of the factories were closed also. Despite that, the chemical price did not go down. If the production would have been at 100% the chemical prices would not have been in our reach. In coming time this is going to happen and we would not be able to run our factory comfortably. There is no benefit of demand if we are not able to get margin. Secondly, those who are selling and buying at cash will be winner. If you go on credit selling you have to buy on credit to survive that is not possible these days.

ON BUSINESS CREDIT SCENARIO 

Mr Manish Kedia: Commercial Face, Chemical and Timber are not available on credit at present time. The cash and carry culture is definitely possible that was visible after first wave of covid also. But, later we get back to normal and start practicing in old habits. It means if we will get strength and move amicably, being united the scenario will surely change for all.

Mr. Gopal Bansal,: We can do it, as it is all about your mind set. First of all preserve your cash then start purchasing on cash. Slowly, if you can make your product in such a way that’s demand gets created automatically, and then definitely you can sell on cash. But, if you go with crowd, you have to behave like them. We are working on 100% capacity till date. The best part of this second lockdown is that there was no stand still like situation as had happened last time. Everything was moving on slowly. Even market is also moving slowly. The organized projects are not stand still, so the demand is continuously coming up.

Mr. Amit Goel,: The opportunity is in all range of products, but the raw material price fluctuation is such high that a rate of product need to revise in 15 days. In PVC, the resin has reached to Rs 150 from Rs 70 . We are getting much impact of freight and raw material prices for our MDF plant also.

ON MDF & PARTICLE BOARDS VS PLYWOOD

Mr. Bobby Verma: There is no impact of Particle board on plywood. In my opinion MDF can impact plywood and in coming two months the scenario will change. We can see every shopkeeper start selling MDF also who are selling plywood which was not in trend two years before. Today HDHMR and others are having much more impact because its surface is smooth that give better finish. On the other hand plywood is costlier and do not offer such finishing. Yamunanager players are smart and they will chose to divert according to their choice.

If you can make your product in such a way that’s demand gets created automatically, and then definitely you can sell on cash. But, if you go with crowd, you have to behave like them. We are working on 100% capacity till date. The best part of this second lockdown is that there was no stand still like situation as had happened last time. Everything was moving on slowly.

Mr Gopal Bansal: I think the market now is getting to understand the uses and application of every product in wood panel industry. MDF, Plywood and Particle Board where it should be used or where not are getting its place now. MDF is in the market for over 10 years and slowly penetrating in the market, no doubt it is a good product and its acceptance is faster. When we introduced calibrated product there was issue in the market that it will be costlier, and market will not accept it. I said this is not the case, as where the calibrated plywood is needed will use calibrated plywood. Same is the case in other range of products and it will remain forever. Those who are not focusing on products according to future needs will definitely have to suffer

In rural market and small towns’ Particle board and MDF is not much appreciated. So, plywood has its own importance. Good quality plywood consumption is increasing day by day. MDF market become bigger similarly Particle board and WPC are also increasing.

Mr Amit Goyal: The mentality of urban culture has reached to tier two, three cities. You can see in villages there was no furniture few years back, but now they are developing like anything and consumption of plywood and panel products have increased there.

Mr Gopal Bansal: The furniture is going-on in organized way of manufacturing and has obtained nearly 25% organized culture which was just 5% few years back. In future it will increase as everybody does not want to bring the carpenter at home and get their work done. In coming few years everybody in the country will be thinking of clean environment and quick delivery of finished product, the market is moving towards that.

Mr Manish Kedia: The market of plywood is also expanding as its production has also increased. India is a vast country believing in quality, value for money and long lasting products. In rural market and small towns’ Particle board and MDF is not much appreciated. So, plywood has its own importance. Good quality plywood consumption is increasing day by day. MDF market become bigger similarly Particle board and WPC are also increasing. The marketing strategy of these products is also impacting the sales. But, plywood sales are increasing day by day.

ON TIMBER AND FINISHED GOODS PRICES

Mr Sanjay Garg: Domestically and internationally the price of timber will increase in similar way as it was increasing before. I would like to appeal the industry players that do not panic if the price of timber or raw material increases. Accept it in well manner and focus on product price acceptance as we have to survive anyways and industries remain functioning.

PAYMENT AND INVENTORY

Mr Bobby Varma: There is big difference in Particle board, MDF and plywood that Particle board and MDF have holding capacity and factories can have over one lakh sheets at its go-downs. But, in plywood we never had seen such stock in Yamunanagar. There may be some exceptional cases with organized working. But, if you look at small and medium players they are running hand to mouth.

Mr. Amit Goel,: We generally put our inventory into market with parties that are wrong. Maintaining inventory and controlled production is similar things. In terms of payment there will be trust factor deciding the further course of action. Those who are trusted players in trade or supply chain will get everything.

Mr Gopal Bansal: Those who are on terms should be given their share of materials and those who are not on terms should be avoided. You cannot be so hard in these times; you have to help them. Today is the time to invest, and if the market gets improved after six months you can withdraw your fund. Ultimately the sustaining the business is our prime objective. And we should dedicate our thought, willingness, and intent to revive them. You should be much vigilant to find who is trying to get benefit and creating un-necessary scarcity in terms of payment.

Since last two years there is no new establishment coming up in Particle Boards. Everyone has their settled sales but demand is increasing. Similarly, the market is also expanding. The most importantly, your product must be a quality then you will be able to get good customer and payment will also be on time.

Mr Manish Kedia: In India the business relation leads the way with trust and longevity, so to continue your business you have to sacrifice sometime. Those who are cheat or weaker will automatically escape out from the business. In this crisis time someone is sending their payment without any asking and someone is not willing to pay, while many of them are sending but in small amount. It all decides their intent and trust factor that pays in long term. Those payments are on time or a bit late are also not going to have any issue in future. But, those who can’t build trust will be suffering whether it is trade, manufacturing or material suppler. If we make balance of demand, supply, payment and production with patience everything will be in control automatically.

Mr Bobby Varma: There was a similar situation like plywood in terms of payment in Particle boards also. Since last two years there is no new establishment coming up in Particle Boards. Everyone has their settled sales but demand is increasing. Similarly, the market is also expanding. The most importantly, your product must be a quality then you will be able to get good customer and payment will also be on time.

ON EXPECTED SCENARIO DURING JULY TO SEPTEMBER

Mr Gopal Bansal: We will be back with 100% in this period and the market will also moving on with similar capacity. Who makes effort is getting the result. Everything has to settle down as last year the market picked up even after standstill. We should not think uncertain, now market is opening in an organized way and we have much more opportunities so observe them and move forward without wasting your time. Some of our dealers are working hard and getting good result while some of them are at rest.

Mr Bobby Varma: For a business in wood panel industry March, April and May is terms as good season that has been shifted to June onwards now. Last year also the market shoot up just after opening it, again this is going to happen and the demand will definitely be 100%

Mr. Amit Goel: After opening lockdown there will be a bull demand in the market as modular furniture and online furniture sales has increased many folds and it will continue post covid because many of the consumers are not allowing entering the carpenters in their homes due to fear of infection. The plywood sales will also bounce back when labor and carpenters will come back to market.

Domestically and internationally the price of timber will increase in similar way as it was increasing before. I would like to appeal the industry players that do not panic if the price of timber or raw material increases. Accept it in well manner and focus on product price acceptance as we have to survive anyways and industries remain functioning.

Mr Sanjay Garg: The US furniture market is at boom today and the sales are ten time now. They come at the top of the world in terms of covid causality. India market will respond in similar way and the losses occurred in these two months will cover-up in coming JulySeptember period. We take example of Kuchh that in 2002 it survived of earthquake people were thinking that there is no hope of revival if this region, but it revived and is an example of courage and strength to fight back today. We will definitely progress well month to month. Plywood will never lose its impact. If some parts of its application goes into MDF and Particle Board, its requirement at other application also appear. If you wish to work with good quality and material, and work well you have to pay on time. The slow payment schedule is not going to sustain much more in coming times.

Mr Manish Kedia: The pipeline is empty, and movement has already started, so this spark of fire will definitely convert into big one. July-September will definitely extraordinary in terms of demand, supply and payment as well. Everyone will have win-win situation.

 

 

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