Published on July 28, 2014

The long spell of slow down is never been in favor of any country. Low demand, over supply, vulnerable raw materials and liquid crunch etc have collectively created big burden on every Laminate producers and traders that has affected their profit margins.

In the month of June all the Laminate players seemed settling down as once again market shown a luke warm activity. The plywood demands returned to similar demand scenario where plant was running 50 to 60 percent of their capacities during Jan to April months. The decorative Laminate segment seemed more affected as majority of manufacturers in Gujarat expressed very weak order line up.

For the better spread, sales growth and margins, many producers have opted to switch to direct ‘Dealer model’ or their own warehouse setup and moving away from present distributors which will enhance their balance sheet outlook.

Report said that since last month phenol prices have gone up to 15 percent which has created a burden on laminates and phenolic grade plywood producers. Producers are facing liquidity crunch and bad payments, and recent jump in phenol prices put some extra burden on balance sheet. On the other side, the weakening price of formaldehyde is providing mitigate to laminate producers. Market players said that Indian ports have sufficient volume of inventories and stock of methanol so the prices of chemicals will be breezy in near term.

Overall recently the Laminate industry operated at half of its capacity with tremendous pressure on payment. Source said that market expect that September onwards markets will bounce back and it will grow gradually with resuming of halted projects. The recent policy change by government in budget 2014-15 will fuel the demand for quality products.