Indian wood panel and decorative panel industry normally rely upon imported raw materials from China, Indonesia, Europe, Africa, Iran, USA, Taiwan, Burma, South Korea etc. The ocean freight charges, and less availability of containers has actually broken down the supply chain management in raw material side. In addition, Suppliers are blaming Port authorities and Government officials for lengthy checking process and unwarranted queries, extending more delay in receiving raw materials.
The imported raw materials cost have gone up in range of 20 percent to even 100% percent in last 5 months due to plant shutdowns and covid pandemic led shutdowns. But shutting down of large shipping lines has led to steep jump in Ocean freights, lesser availability of containers with delays at ports. It is directly impacting the capacity utilization of Indian laminates companies, PVC Board producers, PVC laminates, Decorative veneers etc. The Aluminum composite panel producers and even hardware and adhesive industries are finding hard to stay running with sudden rise in chemicals, commodities and aluminum coils. The dependency on imported face veneer and melamine has already blunted the recovery momentum of Indian plywood industries.
The disturbance in procurement of imported raw materials is not only causing uncertainty but also making many smaller players pushing out of the game. To maintain uninterrupted supply the organized brands and big players work on 1 to 2 month raw material forward booking, but that grace has also exhausted now. The wood panel industry and trade recovery post covid lockdown was going positive but import blues are another blow for every stake holder.