The plywood industry in India has started reaping the benefits of BIS, partially in terms of arrival of core veneer and timber because the surplus timber and core veneer is now readily available to Indian manufacturers which have stabilized their pricing costing of core. This is the core reason why Indian producers are now upbeat and taking steps to reach out to different pockets in the market.
It has been almost a month since the BIS- QCO implementation is in full force. The scene, observed in markets is not as per anticipation, there has been huge inventory gathered by importers in the markets is still full fling the availability although the flow of material from Vietnam and Nepal has reduced drastically. This kind of effect has definitely upped the sentiments for Indian manufacturers in Yamuna Nagar, Rajasthan, Uttar Pradesh and even in Kerala. Owing to Vietnam and Nepal there was a pressure on domestic manufacturers as imported plywood was posing as a checkpoint and the same has happened in particle boards industry as well.
The plywood industry in India has started reaping the benefits of BIS, partially in terms of arrival of core veneer and timber because the surplus timber and core veneer is now readily available to Indian manufacturers which have stabilized their pricing costing of core. This is the core reason why Indian producers are now upbeat and taking steps to reach out to different pockets in the market. So, prima facie the first impact of QCO is visible on domestic plywood manufacturers in terms of little ease up of margins, oversupply and hope in the market. Margins have improved, hopes have come back and raw material availability has also improved.
So, in the current scenario when there is reduced supply from imports and supply from Indian producers is rising, the market is set to witness more of ISI marked material made in India. As per an estimate, there are 70% of companies who will witness mandatory QCO in the month of July.
On the contrary the shortage of labour is evident in every plywood industry clusters whether it is Punjab, Bareilly, Yamuna Nagar, Delhi NCR, Gandhindam, Coimbatore, Parambur, Kannur or Mangalore. It is expected that workers on the floor will return in the month of May end or June after harvesting their crops in villages which will certainly create a balance of material availability in the markets.
There are many teething troubles in the adoption of mandatory ISI mark in terms of rules, norms, amendments in certain standards, sample drawing practices, stop marking practices, rejected material dilemmas, treatment dilemmas, which are hovering on the plywood industry. But the industry is hopeful that things will ease out in due course stipulating that both stakeholders and BIS officials work in tandem.
There have been murmurs of dissatisfaction due to arm twisting approach adopted by BIS officials while drawing of samples or while passing of the samples. Consequentially, associations have mutually decided to write letters to concerned authorities for cooperation and creating a transparent system for drawing of samples in various places to put a noose on the illicit practices so that the vision of Make in India remains on strong footing and Indian manufacturers can prepare themselves for exports as well.
The first month of this financial year, April, started on a muted note, but later on the demand seems to be picking up. Although MDF prices witnessed correction, but demand remains fair enough. In the decorative laminate segment, prices of decor paper and craft paper are on upper levels, which may result in an increase in price increase announcements by laminate manufacturers in the coming few weeks. On the contrary, the oversupply scenario in MDF sector has brought down the prices of interior grade MDF by around 3-4%, although there is no possibility of further drop in any grade of MDF prices.
In particle board segment, demand has started picking up following speed in consumption of demand of office spaces. Many government projects, institutional projects have also started, which has begun supporting the particle board industry. Following the steady demand and pendency of order, particle board industry is hungry for some breathing space. We believe that in this financial year, post second half, the prospects for particle board industry will improve.
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Pragat Dvivedi, Founder Editor