To add to the woes of the plywood industry, re-constituted boards such as MDF, HDF, WPC (wood plastic combination) boards and particleboards are increasingly replacing plywood.
Rising costs and competition with substitutes are eating up profitability in the plywood sector. Competition in the
woodbased panel sector is shifting in favour of the composite boards as prices are very competitive and the quality of the panels now available is so much better than in the past because of improved manufacturing technologies.
The reconstituted panel manufacturers have moved downstream and are now laminating panels within their own plants thus cutting out intermediary companies which previously handled the lamination. These boards from the panel mills now go directly to manufacturers of furniture, doors etc.
These changes are bringing very competitively priced products to the consumer. Recently the Ministry of Public
Works and the Military Engineering Services have permitted the use of reconstituted boards in public sector works thus reducing the share of plywood in this market
segment Laminated boards have also affected consumption of solid wood for doors. In India today flush doors are becoming more popular in up-market homes.
Currently there are around 85 plants producing veneered flush doors, laminated flush doors and moulded flush doors with PVC membranes. Because Indian carpenters find wages better in the Gulf States Indian producers of solid doors are having to increase wages to keep carpenters but this means there products become more expensive and they find themselves priced out of the market.
India has introduced an employment scheme under which a worker when employed must be guaranteed at least 100 days employment. This has reduced labour mobility and caused a scarcity of workers. The scheme applies to unskilled and skilled workers.
This welfare measure introduced by the state is a problem for plywood mills which are more labour intensive than the sophisticated reconstituted board factories.
Because of labour shortages many plywood mills have had to limit production to one shift.