Demand and payment receipts are the two sides of the same coin. Demand has been slow during past 7-8 weeks and so have been the payment flow. Why and when is the question though very few are still maintaining the flow. There is lacklustre lifting owing to lesser spending by customers who are struggling with inflation, higher EMI’s and uncertainty of job fronts. The middle class spender has taken a back sheet owing to weak sentiments on earnings, increasing living cost, inflation and gloomy news all around. Although the demand in shuttering ply and doors segment is better than other materials. Liquidity is hit largely because small spenders are not spending on consumer durable items and hence demand in tier 4/3/2 cities is sluggish. The spending is even slow on daily need items and in same way, spending budget on interior of the house is being postponed temporarily by middle class.
The upper layer in middle income Group is still on with spending and so is reflected in sales data of brands in most of the home improvement segment. In fact their sales are also hit if we compare from the last year but they are performing better than the other average manufacturers in their product categories. Few top brands reported all time high sales in panel products and decorative segment though it’s only correct for a top few. The results of 3rd quarter did approve one thing that largely market is now being driven by systematic and quality worthy brands led by top players in panel industry. The indicators do suggest clear stagnancy in volume led plywood and laminate category on the whole. I believe the demand can be seen improving once easing up on interest rates comes in to effect.
The pressures on MDF and PB margins are also visible which was already mentioned by the Ply Reporter editorials in previous issues. Import of MDF, particle board and few decorative items is putting pressure of domestic producers. There is an oversupply scenario in every product category compared to ongoing demand in markets. Most of the mid segment manufacturers and whole seller is puzzled with a loss making business in ongoing period. The overall underlining fact is year 2023 will be promising but not for everyone. Clearer, Stronger, better equipped companies will forge way among the limping, unclear and unorganised players. The market is shifting from jugaad to standards, from unorganised to better organised as repeatedly written and said in previous years. The key to sustain in tough times is capital and quality.
The timber scarcity scene is visible across states and plywood manufacturing clusters are certainly up for a tough time. The next issue of ply reporter will be a special story issue which will carry a study on plywood demand and changing pattern. This will help the readers to plan their business in next financial year. Do not miss watching our regular Live shows and news mailers. Stay updated with ply reporter and our other regular publications.
Pragat Dvivedi
Founder Editor
Mail to “dpragat@gmail.com”, ( M) 9310612991