By Rushil Thakkar
India’s plywood industry is expanding due to a rise in demand by the nation’s rapidly growing infrastructure projects as well as a change in consumer preferences for interior design. Plywood, which has a huge market demand from furniture manufacturing to constructing buildings, is seen as a potential industry.
The industry is growing at a compound annual growth rate (CAGR) of 6.74% from FY23 to FY28, with a projected value of Rs 306.5 billion by the end of 2028–2029.
Plywood sector overview
The furniture and building industries use plywood, which is a strong and adaptable material. Its strength and versatility have won it great praise. It is made by glueing together thin wood veneer slices and provides an amazing combination of flexibility and durability. It may be made of teak, maple, mahogany, oak, pine, cedar and spruce, among other wood species. It serves a wide range of purposes and comes in a variety of kinds, including tropical, aircraft and decorative, flexible, and marine plywood.
Because of its resistance to variations in humidity, it is a highly favored material for furniture construction and interior design, providing economical advantages along with accurate dimensions. Beds, tables, chairs, cabinets, shelving and other furniture are made with it. Additionally, moulds for concrete structures are made with it.
Quick glance of plywood industry in India
The plywood sector is one of the big contributors to the overall economy and is closely related to a number of important industries, including real estate and furniture production. With real estate predicted to exceed $1 trillion by FY30 and contribute around 13% of India’s GDP by FY25, the post-pandemic economic momentum from 2022 has had a major influence on plywood demand.
Given that India is the world’s fourth-largest consumer and the fifth-largest manufacturer of furniture, plywood plays a critical role in the domestic market. With a compound annual growth rate (CAGR) of 10.9% from 2020 to 2028, the domestic furniture industry is expected to reach $32.7 billion by 2026. The growing disposable incomes and a shift in consumer choices towards reasonably priced but attractive home furnishings are driving this expansion. Also, ready-made furniture is becoming more and more preferable due to its easy use and requires minimal care.
During the COVID-19 epidemic, the Indian plywood industry encountered a number of difficulties, including a disrupted supply chain and a downturn in the construction industry. However, it quickly embraced e-commerce and digital solutions to deal with the new veracity. The demand for office chairs, laptop tables, and tables increased significantly in the plywood industry as work-from-home arrangements and hybrid work models gained traction.
Consequently, the industry had a robust rebound propelled by a rise in home furnishings and the steady resurgence of the property market. Therefore, with an estimated value of Rs 208.5 billion, the Indian plywood market had a considerable development phase during the FY23.
Factors that provide impetus to the plywood industry
Below are some of the factors that can be categorized as main growth drivers of plywood sector in India.
Growing urbanization: It is anticipated that 1.7 billion people would live in India by 2047, with over 51% of them residing in urban areas. By 2047, India will require the construction of almost 230 million residential units to meet the demands of this urban demographic. Growing urbanization is a major factor in the demand for plywood, which is utilized widely in furniture manufacturing as well as building.
Building and remodeling projects: The need for high-quality plywood is being driven by the rising popularity of employing strong, long-lasting materials in building as well as a rise in home remodeling projects.
Rising demand for semi and fully furnished flats: One of the major growth drivers is the increasing demand for ready-to-move-in residences, which usually include a lot of plywood inside.
Government housing schemes: Programs such as the Pradhan Mantri Awas Yojana are designed to encourage the development of affordable homes, which in turn stimulates the plywood market because these projects need large quantities of building supplies, including plywood.
Demand for premium and ecologically friendly plywood: There has been a growing demand from consumer for aesthetics over utility, towards premium grade and environmentally friendly plywood variations.
What lies ahead?
Thanks to technical advancements and innovation, the plywood industry in India appears to have bright future potential. It is anticipated that the use of cutting-edge manufacturing technology would increase output and quality. Automated manufacturing lines and computer-controlled cutting machines are two examples of these technologies.
Technological advancements like plywood that is waterproof and fireproof are expanding its applications and meeting a range of customer needs.
Furthermore, using sustainable materials and other eco-friendly practices attracts environmentally conscious clients. However, there are still problems, such as a lack of skilled personnel and superior raw resources. To solve these challenges, the sector is focusing on developing efficient supply chains and providing funds for employee training.
(The writer is the Director at Rushil Décor Ltd)
