Shadow of weak lifting due to slow project and poor demand is covering Film Faced plywood segment. For six months film face demand was good but since beginning of November it has witnessed dullness. The increasing supply of film face plywood and shuttering ply materials is also said to be a key factor. Due to a dozen new addition of presses that too of 16 daylight plus presses installation in Yamuna Nagar, Punjab and surrounding regions is said to be one of the major factor of dullness. The inventory buildup in plywood factories has compelled the film faced plywood producers to reduce prices by Rs 1 per square feet during December second week but it is not helping the demand.
Industry people accept the weak demand scenario which is in tune to almost 50 % duringsince last 8 weeks hence many producers are forced to cut the production by half. Film faced plywood producers acknowledge to have reduced prices because of drop in phenol prices and pressure of clearing inventories.
There are reports from all the states which reflect the fact that payment collection has become challenging post Deepawali or October. Manufacturers are also facing demand issue as it is difficult for them supply materials on prolonged credit basis. On the worrysome note, the film faced plywood segment continue to add capacity and has witnessed an increase by 40.0 % in production capacity in just last one year. Yamunanagar, Uttar Pradesh, Punjab and Southern India are building new factories or adding presses which may further cramp the ease of orders.
The high capacity addition coming up in UP is said to be areason of worry for existing producers and sellers as margins does not look promising without creating an image of quality and brand assert market experts.