As an industry, plywood sector is facing tremendous pressure from all sides. Timber prices have been a cause of concern since a few months but war led volatility has flared up all chemicals and fuel. The raw material cost is set to put pressure on manufacturing sectors across wood based and decorative surface industry which will force the trade to enter in a volatile state again. But so far, trade and markets are not yet implementing the new rates which will have to be.
The industry related to iron, steel, cement, glass, roofing sheets, ACP, PVC etc, all have seen sharp price increase but the same is not yet evident in wood panel sector. Wood based Industries, being largely fragmented and unorganised, find themselves in throat cutting competition, thus the profits of ply-lam sector is under pressure for this quarter as well as till stability is assured. But looming energy crisis especially in Europe shall further accelerate RM cost.
The ongoing scenario is certainly bad for any businesses because it dent consumers’ clarity and bring in doubts on trade people. The crucial factor will be intelligent and informed decisions, made by business owners during these volatile times.
In last 1-2 months, the input cost of plywood is impacting in such a way that require to increase around 12 to16% in sales prices depending upon core width, but market is not passed on the full effect of RMC so far. In weeks to come, plywood, laminate, PVC laminate, ACP etc all categories will see further price rise announcement and no one can prevent that.
The ongoing scenario is certainly bad for any businesses because it dent consumers’ clarity and bring in doubts on trade people. The crucial factor will be intelligent and informed decisions, made by business owners during these volatile times. Prices are set to rise else there will be direct cash losses especially for SMEs and mid size units in particularly plywood and laminate category.
The present scenario in markets is better on demand front. Offices too have started opening up, that is driving demand for wood products. Covid is no more a worry hence a boom in hospitality sector, i.e. hotels, events, restaurants etc is also warming up in the country. The demand on domestic front is certainly getting better which will be visible in FY 2022-23. FY 2022-23 is going to be very-very booming and healthy although profitability will remain a matter of chance. The exports will be impacted which might shake some numbers for Indian export driven companies. On the whole, the WBI & trade are on a tight rope for now.
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Pragat Dvivedi, Founder Editor
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