The reports coming in during August and September first week, there are around 100 plus plants in Northern India are reportedly struggling to run. In Yamuna Nagar alone, there are reports about 85 units under idle state. The units are not running because they have either no fund or there is lack of confidence and preparedness between partners after Covid 1 blow and more during covid 2 impacts.
The present selling price of 18mm commercial plywood is Rs 2 cheaper than the cost and if a factory is selling on such prices that simply means, they are not willing to pay the debtors money. Speaking on the scenario, senior industrialist said to the Ply Reporter that if timber availability and m conditions will not improve in terms of increased rates and payments, more plants will become weak during 2022. The year 2022 is believed to be the tough year for plywood manufactures because of rising cost and falling margins, increasing over heads as well as tightening on taxation and GST rules.
The factories in Yamuna Nagar have continuously suffered in last 1 year due to lockdown related issues, exorbitant rise in raw materials cost and lack of funds from the markets. The informal way of business has added to their woos because the banking support is not available due to lack of credible financials.
Diesel price hikes and Raw material like timber, face, phenol and Melamine cost pressures has been the prime factor to keep the plywood factories under extreme stress. The increased formaldehyde and phenol prices are also one of the main spoilers, impacting the entire wood panel industry as it pushed the cost of glue and resins which are key raw materials for the industry.
The need of fine balance is required in such times which is currently emerging between the nature of demand, production, preparedness to offer an economical and affordable product that fits in to Indian aspiring yet middle class.