Punjab's plywood industry in trouble

An acute shortage of raw materials and fluctuations in the rates of ply and board have played havoc with the plywood industry in Punjab.

And if the situation continues, about half the plywood manufacturers will have to close shop or shift to states like Himachal Pradesh where there is a tax holiday prevailing.

The rates of ply and board have increased by 20-25 per cent during the past few months. Plywood makers said the rise in timber prices was responsible for this, especially of poplar tree wood.

Over the past few years, farmers have shown less willingness to grow poplar. In 2001, they faced big losses due to a steep fall in the rates of poplar tree wood, which discouraged them to plant the tree.

Besides, cultivating poplar trees is a time-consuming business because it takes 4-5 years to grow one poplar tree, and hence the apathy.

"Over the past two years, the supply of basic raw material has come down by 35-40 per cent, which has created a huge imbalance between demand and supply," said Kulwant Singh, an industrialist from Kartarpur, a place famous for the plywood industry. There are more than 250 big and small plywood units in the state.

Asked why raw material is not sourced from neighbouring states, local industrialist Amrik Singh said it was not a cost-effective proposition because of increase in rates of transportation and fuel products.

He said another reason for the shortage of plywood was rising demand in Haryana.

"Jalandhar has the maximum number of plywood units and they are in a difficult situation. There is no alternative for them but to increase the prices of final products, but the customers are not ready to pay that much," he added.

He said he had cut production by 50 per cent as compared to last year.