Mr. Shobhan Mittal, Executive Director, Engineered Panel Division
Q: India's business climate today is relatively favourable as compared to the gloomy weather of recession which has hit badly to furniture industry in Europe & USA. What are your opinions about the current state of Indian furniture and related industry, in this light?
Ans: Mr. Shobhan Mittal: With increasing urbanisation, India is seeing a sea change in the building and construction areas with Interiors and furniture industry being one of the fastest growth segments. In the furniture segment alone
the demand for ready-made furniture is growing tremendously as people increasingly find themselves short on time and convenience to have customised furniture made by carpenters.
The rapidly developing urban centres are giving the necessary boost to demand in this industry. Affordable housing and the culture of ready-to -move-in offices/retail outlets, with low-cost modular furniture are comparatively new to India
and its growing upwardly mobile middle class.
Time constraints on projects and shorter completion schedules due to high cost of finance have also led to a preference for machine- made furniture made from engineered panels like MDF and particle boards. In all this, MDF with its more attractive pricing and versatility of surface which allows carving, curve etching, laser cutting and high gloss finishes, is bound to see greater usage in the residential, commercial and retail sectors.
Growth in this segment is inevitable.
Q: As on today most of the domestic requirement of engineered panels is met by Imports. In last two years a good number of
MDF / particleboard manufacturing plants are started in India. According to your analysis, what will be the challenges for MDF/Particle Board plants which are recently launched?
Ans: Mr. Shobhan Mittal: The challenge to us mainly comes from the Imported products which have been and will continue to be imported into India. With no major local players in this area the demand for MDF has been largely controlled by foreign players, especially in the thin MDF market which is completely controlled by foreign products currently.
One of the main factors in providing an edge to the foreign suppliers has been the differentials in pricing between the local and imported material due to costing of raw materials. Our pricing of timber against foreign suppliers can be different.
Many foreign producers even purchase ready-made resin from specialised chemical companies unlike the conventional in house production by Indian companies, mainly due to lack of resin providers in our country. Other factors such as quality of electrical supply etc. add to higher overheads. Interest loading on the cost of the product also comes with the higher cost of finance and substantial import duties on machinery in our country. All these factors contribute to differential costing of MDF between foreign producers and us. However, now Anti dumping duty has given some breathing space to domestic producers in
terms of capacity utilisation and pricing.
Q: India's business climate today is relatively favourable as compared to the gloomy weather of recession which has hit badly to furniture industry in Europe & USA. What are your opinions about the current state of Indian furniture and related industry, in this light?
Ans: Mr. Shobhan Mittal: With increasing urbanisation, India is seeing a sea change in the building and construction areas with Interiors and furniture industry being one of the fastest growth segments. In the furniture segment alone
the demand for ready-made furniture is growing tremendously as people increasingly find themselves short on time and convenience to have customised furniture made by carpenters.
The rapidly developing urban centres are giving the necessary boost to demand in this industry. Affordable housing and the culture of ready-to -move-in offices/retail outlets, with low-cost modular furniture are comparatively new to India
and its growing upwardly mobile middle class.
Time constraints on projects and shorter completion schedules due to high cost of finance have also led to a preference for machine- made furniture made from engineered panels like MDF and particle boards. In all this, MDF with its more attractive pricing and versatility of surface which allows carving, curve etching, laser cutting and high gloss finishes, is bound to see greater usage in the residential, commercial and retail sectors.
Growth in this segment is inevitable.
Q: As on today most of the domestic requirement of engineered panels is met by Imports. In last two years a good number of
MDF / particleboard manufacturing plants are started in India. According to your analysis, what will be the challenges for MDF/Particle Board plants which are recently launched?
Ans: Mr. Shobhan Mittal: The challenge to us mainly comes from the Imported products which have been and will continue to be imported into India. With no major local players in this area the demand for MDF has been largely controlled by foreign players, especially in the thin MDF market which is completely controlled by foreign products currently.
One of the main factors in providing an edge to the foreign suppliers has been the differentials in pricing between the local and imported material due to costing of raw materials. Our pricing of timber against foreign suppliers can be different.
Many foreign producers even purchase ready-made resin from specialised chemical companies unlike the conventional in house production by Indian companies, mainly due to lack of resin providers in our country. Other factors such as quality of electrical supply etc. add to higher overheads. Interest loading on the cost of the product also comes with the higher cost of finance and substantial import duties on machinery in our country. All these factors contribute to differential costing of MDF between foreign producers and us. However, now Anti dumping duty has given some breathing space to domestic producers in
terms of capacity utilisation and pricing.
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