The Ply Reporter interacted with thousands of people during the IIR conference and concluded a few briefs during MATECIA 2022. The summary below can be helpful for the trade.
The timber and resins input cost does not add up to sales price for plywood hence the production is down by 40-50% in most of the industry clusters. The small scale plywood industry is in fragile state where as branded and organised plywood industries are operating on very low margins with steep timber cost.
The Indian plywood industry is reeling under tremendous pressure on sales volumes and price mismatch. The growth for plywood industries is expected to remain flat during FY 22-23. Untill the timber prices come down and sales price go up, the plywood sector is heading for a negligible profit this year.
The demand in particle board sector is better compared to plywood as demand and supply equilibrium is in balance. The particle board sector is growing steady with double digit growth thanks to rising domestic demand and growing consumption in furniture sector. The wholesalers in metros too are getting in PB trade that's a sign of expansion of product reach.
In decorative laminate sector, the large industries with quality and brand focus are now edging out the unorganised players though the supply in laminates have improved with easing up prices of raw materials. The scenario looks good for laminate sector as interior work is picking up again. With laminate exports up by 17% with 2.7 bn dollars and indigenous demand for organised players growing, the Indian laminate sector is doing very fine so far. It is evident that Indian laminate industry will register a double digit growth again this year..
In MDF, domestic demand is growing every month and so is the supply. The production from domestic facilities are up by around 20% where as imports too have started full speed. If we see the data, last year MDF imports were in tune to 3% of Indian market, we can say almost negligible but suddenly by June-July 22, the volumes are able to touch 8-9%. In months to come the MDF imports might be reaching to 2019 levels or more, if domestic timber prices continue to rise.
The recent fall in Freight costs for SE Asia to India route, is fuelling imports once again mainly from Thailand and Malaysia. With ongoing global slowdown fears, there could be flurry of cheap imports in India as south East Asian countries won't have much option. If the global slowdown fears come true, the cheap import will haunt the Indian wood panel industry during 2023.
At present the Indian real estate movement indicate upbeat activities at work in real estate supported by increased Property prices across segments due to record sales.
Year 2022 is proving decent for construction activity because of higher demand for apartments as well as commercial, data centre and warehousing spaces across metros in India. Despite of new projects, inventories in residential as well as commercial real estate in dropping that indicate very good prospects for interior and furniture sector growth.
I thank everyone for supporting our first edition of MATECIA 2022 at Pragati Maidan. The next year MATECIA 2023 is scheduled to happen in August 18-20, 2023 and we hope to see a larger gathering and focused knowledge exchange again.
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