The beginning of the year 2022 was excellent for the particle board industry with rising demand from OEMs and ready-made furniture manufacturing. The demand was quite good for eight months, which motivated its expansion and capacity utilisation across the industry sector. Bagasse as well as wood particle board—both segments taken together are going to increase capacity by 20% in year 2023.
New PB plants are coming up in the northern, southern regions as well as in Gujarat and it is expected add nearly 4000 cbm of additional capacity per day in 23. Although the last three months of 2022 were not favourable for the particle board industry, as manufacturers were under pressure due to a drop in demand. With the change in scenario, the segment also witnessed a drop in price and margin. Imports of particle board have also increased significantly in the last six months due to decrease in sea freight costs. In the coming times, imports will be a factor posing challenge before the industry.
Post pandemic in the years 2021 and 2022, the demand for particle board suddenly went up due to the rise in demand for furniture like table tops, etc., supported by a work-from-home culture. The factories were working well to meet the requirement, and seeing that they also planned for expansion. With the return of normalcy in imports and the expansion of domestic players' capacity, pressure has risen over the last three months.
The industry is seeing very good growth in 2023 in terms of capacity addition, but the market is not showing such robust demand, especially in the retail segment. The ready-made furniture sector and OEMs will be supporting demand and capacity utilization. Overall, the particle board industry in India has a turnover of nearly Rs 8000 crore, with over 65 manufacturing units which is expected to reach Rs 10,000 crore by FY 24.