Wood Panel Industry and trade have been struggling due to slow payment but they have been managing the operations somehow amidst many defaulters\buyers disappearing over night. After GST, the market scenario is turning in favour of those buyers whose books have been strong and cheques are made to companies on time. According to market feedback from dealers’ side, those counters who are cheque rich and paying within decided time are getting extra price discount than usual. The GST regime is compelling everyone to get tight on payment schedule on the contrary slowdown is affecting the rotation in the trade.
As written a year ago in The Ply reporter, Now Cheques have become the new cash. “The definition of cash payment is termed in immediate cheque payments,” says a manufacturer from Delhi-NCR region. The distributors, who has been practicing fair means in trade are smiling because they are receiving extra discounts running up to five percent, reports the Ply Reporter correspondent from Mumbai. Reports from Bangalore, Hyderabad, Delhi, Pune and Surat confirmed that cheque-rich dealers are buying materials with similar discounts on market prices.
The effect on the whole scenario post GST has become very curious because the plywood traders who use to make cheque payments in 4-6 months are making efforts to bring it within month schedule. The buyers in tier-2 cities are making preparations to deal directly with factories by arranging debts from banks and saving on the price to pay the interest. The lack of cheque payments in the building material industry has been a long pending issue but with very nominal interest rate, market is moving towards mortgaging owns property and borrowing from banks on the basis of books. It is certain that banking transaction will be a major catalyst for traders’ growth story in coming years. At present the winners are those whose have sufficient work capital and large supply base to overcome the rising overheads.