2017 witnessed mad rush to put up a plywood, board or Door industry with an aim to either expand the capacity or new entrant. The race to establish plywood factory was so high that hot press manufacturers remained packed throughout the year. The state-level committee of the wood-based industry has approved 814 applications from Yamunanagar district for grant of licences to set up industrial units. The committee issued a letter of offer to successful applicants, giving them 45 days to deposit the required fee. These new licenses for setting wood based units pulled many aspirants to this line who believes that ply manufacturing is a good business. The government too allowed the setting up of such industries with an objective to attain farmers’ preference for planting more trees under farm forestry and achieving the goals of Haryana Forest Policy.
Apart from new entrants, established plywood manufacturers wanted to gain the advantage by expanding their production capacity jumped in the race to put up a new modern plant. The established manufacturers are expanding with a view that after GST, big and modern manufacturing plants will help them to be established strongly and help them to become organized brands in volume driven market. Many of these players are looking at capacity to produce 200 trucks material per month. New factories in Delhi-NCR, Punjab, Haryana were added or in process of starting soon are already adding pressure to existing manufacturers hence adding fuel to further competition. Year 2017 was the year of new factories which will turn 2018-19 in to a year of excess availability and lesser margins.
The plywood manufacturing activity in the state is expected to grow by double and relatively the demand of Poplar and Safeda timber is growing rapidly. ‘Hundreds of new plywood manufacturing units in Haryana, Punjab and other capital adjoining states’ is a termed as one of the turning point of 2017 because it will influence the demand-supply equilibrium of plywood, boards and doors in markets and will also push up timber prices. It will create unhealthy competition if real estate markets does not improve and wood panel industry margins will be very close to marginal causing a bumpy road ahead.