Indian Particle Board manufacturers have been adding capacities and bringing dawn selling prices with each addition of a new line. Be it bagasse or wood, capacities in both the segment have yielded increased material supplies and reduction in selling prices. The particle board prices have been floating at the lowest level during last three years where further capacities or plant addition will bring down whatever remaining as margin for majority of players. Organized brands feel, that particle board segment prices have bottomed out on present levels, where as possible new entrants are planning for new plants in south India, Punjab, Haryana and other places where licenses are not an issue.
In past couple of years, more than a dozen of manufacturing units have started their commercial production, on the same time particle board prices have seen a correction by 8 to 10%. Gandhidham, Morbi and Rajkot region of Gujarat have led in production capacity expansion followed by North India. The new capacity additions in particle boards has been highest in Gujarat, Maharashtra where wood based plants have reported higher inventories compared to bagasse ones.
As per reports 10 new particle boards operations would begin in couple of month among, three units are coming in Morbi-Rajkot, three Bagasse Based units are coming in Maharashtra and rest in North and South India. Although these all are mid and small sized capacity manufacturing units but it will add 1000 cubic meters per day capacity in 2020 and 2021, if their plans materialize. According to sources, organized brands are also mulling new particle board lines in North and south region for which study is being conducted. Organized wood panel and decorative brands such as Century Ply, Green Panelmax, Merino and Greenlam are also eyeing the opportunity of growth in this sector because a major part of particle board market belongs to unorganized players.
Although the bottom line price of Particle board is suffocating manufacturers due to very low margins, thus few producers are adding 6 ft sizes presses to serve the demand of OEMs and stay out of rat race. In recent additions, Morbi based company, Wood Pulp' and Chennai Based 'Oswin Ply' are commissioning 9x6 ft size manufacturing lines and plan to serve good quality prelam particle board also known as melamine chip boards to furniture manufacturers and OEMs. The prices of prelam boards are not seeing any upward trend despite of rising timber cost and with recent aggressive line, there is no imminent respite visible for manufacturers says industry veterans.