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Small laminate manufacturers face problems in procuring materials

Procurement of deco paper for laminates manufacturing is facing severe supply issues due to non-availability. The problem is being faced particularly by smaller unorganised manufacturers of laminates who usually buy smaller quantities due to working capital constraints. They face consistency issues due to smaller quantities purchase.

On the other hand, large manufacturers in the industry don’t face consistency issues as they usually buy in large quantities. They are also not impacted by the irregular supply of material as they purchase in large quantities and maintain sufficient inventory of raw materials. They also don’t face quality issues and get on time supply as they directly procure their requirement from manufacturers.

However, the industry is no longer facing any major supply issues on labour and logistics front. According to market feedback, distributors/dealers have started giving normal levels of credit to trusted clients, while they continue with cash and carry sales for newer clients. However, the manufacturers have not increased their credit periods to the distributors.

But the laminates manufacturers are facing steep rise in the prices of chemicals in last few months which has gone up by 70-80%. Also, the price of deco papers has gone up by 10-15%. To absorb the increased cost of materials, laminates manufacturers had to hike the price of finished products by 5-10% which has been well accepted by the market due to healthy demand scenario.

Demand for laminates in semi-urban areas has been better than urban areas as it is above pre-Covid levels in most areas. Demand is mainly coming from construction of new individual houses, renovation projects and absorption of real estate projects. Meanwhile, demand for laminates has shown healthy recovery in Metro cities as it is at 90-100% of pre-covid levels. Demand has improved mainly due to increase in renovation activities and healthy real estate absorption.

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