Marred by uncertainty
Despite being self reliant, the plywood industry face a hard time
With the ongoing protest in Tarai, the plywood industry is facing a hard time. Ninety per cent of the total factories are not operational for a month now due to continuous bandh. With low production, the market is gradually witnessing a shortage of products. The industry which was going through a difficult situation since the earthquake, is further marred by the Tarai unrest.
Moreover, the sluggish real estate industry, stagnant economy and political instability have led to a dip in demand.“We face difficulties in distributing products in the market as our factories are not operational due to the strike,” said Devananda Sarawagi, Managing Director of Sarawagi Ply Industries. He further added, “The economy is stagnant and the real estate business is not doing very well.
Also, the plywood market is competitive. All these factors add to our burden.” Citing that they used to export plywood to India, he said, “With the existing situation and other problems, we have not been able to export for a year now.”
Sarawagi stated that political stability is must to spread positivity in all industries. He further said, “The industry also faces problems of
labour and load shedding that ultimately hikes the cost of production.”Utis tree which is regarded as soft wood is the main raw material for plywood manufacturers.
These trees are generally found in Ilam, Phidim, Panchthar, Dhankuta, Hile, Sindhupalchowk, Dolakha among others. Additionally, other needed raw material and chemicals are imported from India.
“We are witnessing a growth in demand of five to six per cent every year. However, this year, we feel that the business will face losses due to the political instability,” said Pradeep Chaudhary, Vice President of Nepal Plywood Manufacturers Association (NPMA).
Citing that the plywood industry is self reliant, he said, “Domestic manufacturers are producing various grade products such as A, B, C and D as per their usage. And three per cent of total production is exported to
According to the NPMA, there are 50 plywood manufacturing factories which directly employ 10,000 employees. Chaudhary further informed that five other companies are in the pipeline for investment in the sector. Citing that there is unhealthy competition in the market, he stated, “Duplication of logos is the main problem.
Many companies copy from established brands and sell low quality products at low price which creates
imbalance in the market.”
According to him, the industry has Rs seven billion turnover annually while still operating at 60 per cent of installed capacity.
Lack of skilled manpower, problems of trade union and load shedding are other hassles faced by the industry. “We have a severe crunch of skilled manpower in the country. Every year we have to import skilled manpower from Bihar and Uttar Pradesh,” he informed.
“The business of plywood has dipped by as much as 50 per cent at present due to the ongoing strike in Tarai and as an effect of the earthquake,” said Ganesh Pokharel, Proprietor of Shikar Trade Link. He said that as the government has banned the construction of residential buildings, it directly affected the demand for plywood.
According to him, plywood is basically used for manufacturing furniture and shuttering while constructing buildings. Citing that the supply has also dipped, he said, “The demand for furniture has gone up but we could only fulfill 30 per cent of that due to the bandh.”
According to him, earlier they used to supply five trucks of plywood a month.Pokharel said that Kathmandu comprises 51 per cent of the market for plywood business and other parts of the country account for 49 per cent. Stating that customers are not aware about quality, he said, “Customers seek affordability rather than quality.
This allows many unprofessional players to penetrate the market.” There are branded products such as Duro, Mayur, Sagun, Surya, Greenply, Himalayan et cetera and local products in the market as well which differ in price by 40 per cent.