Accurate Assessment of Actual Cost is Essential

What is the biggest cost-related problem in the plywood industry?

The biggest issue is that many manufacturers are not accurately calculating their costs. They sell products without including depreciation and incidental expenses. This leads to price imbalance in the market and affects the long-term stability of the industry.

Any industry must keep operating continuously, whether there is a rise in raw material costs or fluctuations in market demand. Ultimately, the burden falls on the industry itself. If this situation continues for a long time, it can lead to a serious crisis.

What impact is increasing competition having on dealers?

Due to intense competition, dealers are adopting unethical practices to maintain their margins. For example, falsely labeling MR plywood as BWR, BWP, or 710 grade. Even misleading marking in the name of Fire Retardant Ply is becoming common, which confuses customers.

What is the impact of incorrect marking on the industry?

False and misleading marking not only deceives customers but also forces honest manufacturers and dealers to adopt unfair practices. This results in a loss of trust across the entire market.

How is the delayed payment affecting the industry?

Many dealers are diverting funds from their core business into investments like the stock market and real estate. This leads to a shortage of working capital, causing delays in payments to manufacturers.

It is important to note that manufacturers also have limited working capital. Faster capital flow in business benefits all stakeholders and contributes to the growth of the industry. Therefore, everyone should pay special attention to this issue.

How  is the demand for calibrated plywood?

Calibrated plywood is facing strong competition from MDF and Particle Board. These alternatives are often cheaper and more easily available, which is affecting the demand for plywood. Although plywood is generally stronger than these alternatives, increasing competition is making it difficult for manufacturers to maintain profitability.

Do industry can gain by increasing production capacity?

There are two main reasons for increasing production capacity: either demand consistently exceeds current production capacity, or manufacturers aim to reduce overhead costs. However, due to rising competition, they are forced to lower prices. This traps them in a “vicious cycle,” where even higher production does not lead to profits.

Raw material costs is increasing gradually?

The rise in freight costs for importing wood and core has increased pressure on local raw materials. Additionally, the prices of imported chemicals such as methanol, formaldehyde, and phenol have also surged significantly. This has increased production costs, creating a major challenge for the industry. The ongoing Iran–America conflict has further added uncertainty, making it difficult to predict when the situation will stabilize. Until then, stability in the industry seems unlikely.

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