The price rise scenario is signifcant in the Plywood, Particle Boards and Laminates industries in March April 2022. The situation arising before the manufacturers has compelled them to increase the price on a regular basis. Till date it has increased many times and is also expected that no relief is visible in near future. There are numerous factors for that such as timber scarcity, fuel and chemical price, labour scarcity and much more. The related associations across the country are regularly monitoring the industry scenario and issuing letters to their members guiding them to get involved in Price Increase, fair practices and tightening the norms for timely payment for the industries sustainability.
PLYWOOD AND FILM FACED SHUTTERING PLYWOOD
On the 2nd April, 2022 HPMA (Haryana Plywood Manufacturers' Association) revised the price and issued a notice after the meeting on account of exorbitant wood and fuel cost increment. This meeting was more important as it was among the prominent manufacturers apart from executive members. Their observation was that the situation is compelling to further increase the price of products.
They discussed the matter and unanimously decided to increase the price of plywood, block board and flush doors by 10% from immediate effect. Besides, the corrections in the trade and dealings have been observed like Rs. 10 per quintal will be charged extra in bill on loading. Remittance i.e. bank charges will be on the buyer account and all sales have to be on cash & carry basis.
Earlier, Haryana based Film Faced shuttering plywood manufacturers had increased the price once again and the decision was taken in a meeting of film faced shuttering plywood manufacturers held at Yamuna Nagar on 16th March 2022 under the chairmanship of President of AIPMA Mr Devender Chawala. “Due to rising price of timber, chemicals and other raw materials along with labor and fuel cost the input cost has increased due to which the price rise of product is necessary,” said Mr Devender Chawala, President, AIPMA. During the meeting the industry stakeholders discussed the current supply issues of raw material like timber, face veneer, phenol and formaldehyde and decided to increase the price which was implemented with immediate effect.
According to their decision the minimum sales prices of shuttering plywood was as follows: 30kg @ Rs 23.50 and 34kg @ Rs 25.50 with Ex factory and GST charged extra. All the members unanimously agreed upon to increase the sale price in phase manner. They also instructed the trade fraternity to get the payment strictly within maximum 30 days.
Punjab Plywood Manufacturers’ Association (PPMA) on April 01, 2022 called up an executive body meeting to discuss the situation of the surge in all kinds of raw materials viz. Wood, Core, Chemicals etc as the situation is unbearable for the manufacturers and only with cooperation of all stakeholders can the manufacturers tide out of the situation. In view of this, the following has been decided: The immediate price increase of 10% on all product ranges (Plywood, Block Board, Doors etc.) and all supplies to be carried out on immediate payment basis. All the previous outstanding to be promptly cleared and paid to the manufacturers as a gesture of support.
And dated 03 April, 2022 in the executive meeting of Delhi -NCR Plywood Manufacturer Association (DNPMA) the price lump in all kinds of raw materials viz Wood, Core, Chemicals, Firewood etc was discussed. They also said that the situation of the industry is getting worse due to shortage of timber and the cost of finished product is going higher and higher which is not bearable by the manufacturers. So, the rate of plywood, block board and flush doors to be increased by 10% from immediate effect. It has been decided with consents of all members and they said that all the sales should be on cash & carry basis. They also request the dealers to clear the previous dues as early as possible as a support to the industry.
Gujarat based wood based industry also increased the price from 16 March. In order to survive they opted to increase the price of finished product with immediate effect which was as follows: All grades of Plywood price has been increased by 8%, Block Board by Rs 3 per sq ft, Flush Doors by Rs 5/- per sq ft. The decision had been taken in a meeting of the Plywood & Veneer Committee held on 16 March 2022 at Timber Bhavan (K.T.A) Gandhidham to discuss the current scenario of Plywood Industries in Kutch.
During the meeting they discussed the increasing input cost due to the sharp increase in raw material cost like Timber, Resin and Chemicals which has resulted in the high increase in the manufacturing cost. Moreover, considering the prevailing market situation it has also been decided to sell all the material on cash and carry basis. If the current scenario persists they will be reviewing the situation again in the month of April.
All Kerala Plywood & Block Board Manufacturers’ Association (AKPBMA) on 01 April called up all plywood dealers extraordinary general body meeting at Perumbavoor, Kerala, considering the hardships faced by the plywood manufacturers due to the unprecedented increase in raw material prices such as timber, resin, face veneer, diesel and other expenditures like labour, transportation charges etc and decided to increase the price of all plywood products in the following manner. Plywood having thickness of 6 to 9mm to increase the price by Rs 2 per sq ft, 12 to 19 mm by Rs 3 per sq ft and for the Block Boards and Flush doors to increase by Rs 3 per sq ft.
The general body also decided to form a disciplinary action committee and to initiate actions against those manufacturers and dealers /agents who are acting against the decisions of the Association especially with respect to price increase. Disciplinary actions committee has been also entrusted to look into various complaints against dealers/agents for non payment to manufacturers within the stipulated time and to black list them at the State level and to circulate those names among the members of All India Plywood Manufacturers Association. All stakeholders requested for the cooperation and support for the cause.
Kunnur District Plywood & Block Boards Manufacturers Association on 21 March 2022 in their executive committee meeting took the decision and the same was informed to the members that prices have been increased on doors by Rs.4 per square feet, Block Board by Rs.3 per square feet and Plywood by 8% for all grades. The rates have been made applicable w.e.f. 01 April, 2022.
They also instructed that in case the dealers are not able to agree with the decision of the Association, the Organization will SHUT DOWN the factories in Kannur, till a certain period of time. It shall come into effect from 15th April 2022 onwards. They suggested that if any dealer who has got long term payment due to any of the association members, clear that amount within the date by 31 March, 2022. And those who fail to clear that amount within the above mentioned date the Association will forcefully add them as in the BLACK LIST of All Kerala Plywood, Block Board & Door Manufacturers.
PARTICLE BOARDS
All India Particle Board Manufacturers increased the prices of both wood and bagasse based particle boards by 15% with immediate effect due to high input costs f its raw materials in a meeting of "All India Particle Board Manufacturers Association' held on 12.03.2022 at Ahmedabad, Over the last few weeks, the raw materials pricing and other operative expenses uptrend continues & become more intense than ever. The price hike was happened in many raw materials, like Bagasse, Wood, Paper, Chemicals, etc. and there were no signs of reducing it in near future. The current scenario was discussed in length and has been decided to increase sale prices with immediate effect.
The members had decided to charge extra premium also for Texture and Glossy finish. The next review meeting had been called in the first week of April. The meeting was attended by more than 40 Particle Board Producers from all India such as Mr. Amrit Patel (Levis Signature), Mr. Rakesh Verma (Onze), Mr. Amit Agarwal (G Mica), Mr. Vikas Agarwal (Salasar Particle Boards), Mr Sanjiv Gupta ( Trenox Laminates), Mr. Mandeep Bajaj (Krifor Ind), Mr. Kamlesh Patel (Navkar Particle Boards), Shikhar Gupta (Flabicon), Jinesh Shah (Aukriti PB) etc.
HIGH PRESSURE LAMINATES
During last week of March, the laminates brands such as Merino, Greenlam, Century Laminates etc has announced the price increase in entire thickness, followed by other organised brands. Industries say that they are compelled to increase the prices due to high prices of different raw materials such as paper and chemicals.
In the year 2022 the 2nd price rise in laminates were observed within a month. According to the Indian Laminate Manufacturer's Association (ILMA) the high prices of raw materials have pushed the laminates prices up again within 30 days. As per the report, there has been an unprecedented increase in the prices of all the raw materials only in the month of March in addition to the previous recommendation made on 10.02.2022. The industry has also seen substantial increase in the cost of fuel and transport and this has resulted in an increase in the overhead cost of production.
ILMA being the representative body of laminate producers across the country had assessed the tentative impact of increase and issued advisory to all the members based on prevailing market; so that members can take appropriate decisions and suitable actions. As per recommendation dated 8th March, 2022, the prices of 1 mm, 0.9 mm, 0.8 mm and 0.7 mm increased Rs. 50, Rs. 40, Rs. 30 and Rs. 20 respectively. Hence the prices of 1 mm and 0.8 mm have gone up to Rs 90 and Rs. 70 respectively within a month.
PVC LAMINATES
PVC laminate price has been increased by Rs 50 per sheet as per the respective basic price list for all series due to the recent hike in all raw material prices, fuel and other expenses. The decision has been taken in a meeting of the member of All India PVC laminate manufacturers Association held on 05 April 2022. The letter issued by them on date 07 April 2022 the channel partners and retailers have been requested to support for the industry for its sustainability and service continuation. The brands belong to the PVC laminate manufacturing include: Skydecor, Meraki, Allcor, Crystal, Stanley, Royal Glow, Nusmart, Sparrow, Eurobrite, Crossbond, Kaliedo, Flexibond, Alstone Multidecor, Kairos, Black Cobra, Silken, Singhlam, and Advance.
VIEWS OF THE PRESIDENTS OF ASSOCIATIONS
Mr JK Bihani, President, Haryana Plywood Manufacturers' Association: The price rise is due to timber scarcity, fuel cost and transportation cost. Generally the tree felling decreases every year in the harvesting season of April and May but this year it has been affected more due to Ramajan also. Besides, with rising prices and getting a positive sentiment the holding capacity of farmers has increased significantly in expectation. After two three months we are expecting that timber arrival will improve due to higher cost of timber. Also the price of plywood has not increased in the last two or three years so the vacuum created has given space for price rise and its realisation with demand and scarcity of timber.
Mr Indrajit Singh Sohal, President, Punjab Plywood Manufacturers Association (PPMA): There is no wood availability in Punjab. The land covered under plantation ten years before is not even half today. On the other hand the numbers of factories are increasing and production capacity has also increased significantly. The scenario is getting worse day by day. The need for timber in Haryana is also being fed by UP. In Punjab also the timber started to come from UP. In a very short time the timber availability in UP will also vanish if something positive has not been done to make a sustainable approach for timber availability.
The solution for this is to go for contract farming and the industries have to take initiative for plantation making a group of people of industry players. Today we are facing the consequence of uprooting of poplar by the farmers when the price was all time low at Rs 300/ tonne.
There is no other factor for the price rise of wood products as the fuel price rise and other raw material cost is negligible in front of timber scarcity. For the next three years the timber scarcity is going to continue. We have to find solutions otherwise we must be ready to face more aggravated consequences. We are going to have a meeting with the Govt of Punjab, Farmers and Industry Association on April 7, 2022 to discuss the plantation and its sustainability. The industry initiative for plantation would work well and for that the government has to restrict more industry to come into play and remove the licensing and give tax rebate for wood based industry.
Mr Vikas Khanna, President, Delhi -NCR Plywood Manufacturers’ Association (DNPMA): There is uncertainty of timber availability and this is going to continue for next three years. The timber price which was at Rs 900 has reached to Rs 1200/tonne. Also the manufacturers are not able to get the required volume of timber so the factories have come to 8 hour operation in 24 hours. It gradually decreased from 24 hours to 16 hours (by shutting down the night shift) and now 8 hours. The price of input cost increases every week and to fulfil the previous order we have to pay from our pocket. Previously the difficulty in price realisation was due to good availability of goods in the market but this time there is no availability of raw material.
The solution for this is to go for contract farming and the industries have to take initiative for plantation making a group of people of industry players. Today we are facing the consequence of uprooting of poplar by the farmers when the price was all time low at Rs 300/ tonne. There is no way out other than to take initiative for plantation by the industry body. We have started to work on it and shortly we can see the result but during the gap of three to four years we have to suffer.
Mr Navnit R. Gajjar, President, Kandla Timber Association (KTA): The import cost of timber has increased much more despite that the price of end products has increased only by 10 to 15% in the last two years. The pine wood which was below 115 dollars has reached 180. The price rise has been seen across the world, so its ripple effect will definitely come to the end products. There is no relief in price rise being seen in near future. In the last financial year 38 lakh cbm timber was imported in FY 21-22 which is much more than the import in the pre-covid era it was 37 lakh cbm. The price rise will not be affecting the demand. There is no issue in realisation of the price rise of goods.
MM Mujeeb Rahman, President, All Kerala Plywood & Block Board Manufacturers’ Association (AKPBMA): This is because the timber and chemical price including all raw materials are increasing. Timber shortage is there everywhere because the latex price is high so the tapping of rubber plants is going on and tree cutting has decreased significantly this is the reason rubber shortage is there for industrial use. We are expecting that this will continue for five years.
We are informing the manufacturers to reduce and control the production, make only good quality and sell it at a good price only. That is only the way because the price rise would be a regular scenario. The Kerala government is taking initiative to plant new wood. We are also planning to distribute Malabar Neem (Melia Dubia) saplings free of cost during the rainy season.
Dr Narayanan TP, President, Kunnur District Plywood & Block Boards Manufacturers Association: Timber wood price is increasing day by day. It was Rs 4500/tonne one year back is now Rs 5700/tonne. Mahogany wood price has also increased by 40% within three months. The rubber wood cutting has decreased due to other industry aspects. The chemical price has increased by 25%. And with the increase of labour cost and transportation cost the input cost has increased very much. With it the margin has dropped to just 5% now which was nearly 20%. So the price increase has been sought for the sustainability of the industry.