Mahabir Agarwal

MAHABIR AGARWAL is the MD of GENNEXT PLYWOOD (P) Ltd
with HO in Kolkata and branches in all major cities, covering
every part of India.
Asean brand is one of the top popular brands
in India, having manufacturing unit at VPO Balisa

Production is Improving…..
Demand has reached to pre Covid period. Working capital is not a problem as financial institutions are eager to provide loans at attractive rates.

All raw materials are expensive by 50-80 percentage since October. Manufacturers have either absorbed the extra cost or passed it on to the customer by increasing the price very marginally. For those lower down the value chain the SME’s with wafer thin margins-the extra cost is impossible to absorbs. The raw material price increase has meant that some SME’s are working at minus margins. They have to be very selective when it comes to taking new orders. But how can we utilize our full capacity, when skilled labour is in short supply and the price of raw materials has gone up, affecting our bottom line.

Whether cost is recovered in finished goods?
Rate increment to meet up the cost is very much essential. Everyone is trying to push up with least success. North India Yamunanagar is particular, have to initiate. Another side of the coin is, we are relieved to get our customers back. We dare not raise our prices, for fear of demand shrinking again. We have to settle for a negative bottom line just to hold on to our customers.

What is the impact of running units on rent.
Working of industry and trading is altogether different. Running any industrial unit with trading style, may produce better results financially, in short run. But is affects negatively in long run. Industrialists play for a long game and not for short earnings.

Running a unit for a short period can never have an industrial mind set. Trading and industry have different working line and atmosphere. Marketing is disturbed when traders are involved in manufacturing for a short period.

Difference after covid?
Covid may not disturbs the market now on, I feel. Demand is increasing slowly but consistently. Unfair practices just for immediate profit from some of our brothers, impact the whole market, Who do not balance the parameters of quality and marketing. We can just hope.

What brand value means to you?
Brand actually means to bond manufacturers, dealers with actual customer, who are loosing faith in the products due to negligence in maintaining quality from some of manufacturers. Even W. Bengal has a 50% demand for economical grade plywood. Marketing on these rates, triggers for compromising an quality which ultimately diminishes our value.

Incentives from government?
Government spending on infrastructure projects is still awaited. The union budget 2021-22 announced many new road, rail, and port projects. These are expected to push up demand only when spending starts.
We expect to report either a flat or a marginal increase in growth in 2021-21. The uncertainty will continue until the government kick-starts the infrastructure projects that were announced in the budget.

Payment conditions?

There are still some dealers who are amused by cheating. Although market has improved after Covid, yet they are not committed to their words. We have to negotiate through court, in some cases, which should be avoided for a better culture. We praise good hearted dealers, who are the backbone of the trade.

Possibilities of indigenous face?

Fascination upon Gurjan face is not diminishing in Indian market. Even we can say that better rate are realized with gurjan face. Everyone in the industry is trying to change the scenario.