The margin for particle board plants are affected with unfolding rainy season and escalating raw material cost. Specially the wood based particle board units of Gujarat are feeling the hard pinch with sharp rise in raw material prices. The PB industry was showing a decent pace throughout during last year is now witnessing a dull phase. Hence many firms are losing their profit margins because market selling prices of Particle Boards are falling at the same time raw material is shooting up rapindely during last 3 months.
Manufacturers view that timber prices have increased above 25% and the import based timber availability is also getting costlier with continuous rising price of imported wood. On the contrary the prices of finished goods are not increasing despite the efforts made by associations. In Morbi the prices of Neelgiri have shot up, where as in North too, eucalyptus prices have been on the rapid rise. Gujrat based Particle Boards manufacturers say that there are both side pressures on the industry; as on the one hand the raw materials such as timber, formaldehyde, Melamine prices have been continuously rising. On the other hand, the demand has dropped in June and July.
It is to be noted that the Particle Board segment was running at full swing post the first wave of Covid in 2020. The emerging furniture makers’ demand with more capacity addition had supported the industry. Now the situation is different with rising input cost and decreasing prices of finished goods.
Besides, there is capacity addition on the way as there are already around 6 mid-sized lines of approximately 250 cubic meters per day capacity on average in the pipeline. Some big houses are also considering entering into Particle Board manufacturing of over 400 plus cubic meter per day capacity
The reports say that ‘Particle Boards makers had plenty of orders from the furniture and retail sector due to rising demand for readymade furniture but the price realisation of finished products are not there. The import restriction of readymade furniture from China, Malaysia had also helped the domestic producers run at full swing leading to the growth of Particle Board manufacturing capacity