The plywood market in India is on an upward trajectory, driven by a surge in demand stemming from the country’s booming infrastructure projects and a shift in interior design preferences. As a vital component in everything from construction to furniture making, plywood’s versatility is being recognized more than ever.
Projected to hit a value of ₹306.5 Billion by the end of 2028-29, the industry is blossoming at a compound annual growth rate (CAGR) of 6.74% from FY23 to FY28. But what’s behind this growth? For a deeper dive into the dynamics fueling the expansion of the Indian plywood industry, continue reading.
Glimpse of plywood industry
Plywood is a versatile and durable material used in the construction and furniture industries. It is highly acclaimed for its strength and adaptability. Created by glueing together thin slices of wood veneer, it offers a remarkable blend of durability and adaptability.
It can consist of a variety of wood kinds, such as teak, maple, mahogany, oak, pine, cedar, and spruce. Available in a spectrum of varieties such as tropical, aircraft, ornamental, flexible, and marine plywood, it caters to a diverse range of applications.
Its resilience against humidity changes makes it a preferred choice for furniture-making and interior designs, offering both cost efficiency and dimensional precision. It is used to make beds, tables, chairs, shelves, cabinets, and other furniture. It is also used to make moulds for concrete constructions.
Plywood industry in India
The plywood industry is a significant player within the broader economy, deeply intertwined with several key sectors, particularly real estate and furniture manufacturing.
With real estate expected to contribute about 13% to India’s GDP by FY25 and reach $1 trillion by FY30, the momentum gained in 2022 post-pandemic recovery has significantly impacted the demand for plywood.
India’s standing as the fifth-largest furniture producer globally, coupled with its position as the fourth-largest consumer, underlines the vital role of plywood in the domestic market. The domestic furniture market is projected to grow to $32.7 billion by 2026, with a CAGR of 10.9% during 2020-2028. This growth is driven by rising disposable incomes and a shift in consumer preferences towards affordable yet aesthetically pleasing home decor, making ready-made furniture increasingly popular for its convenience and low maintenance.
The plywood industry in India faced various challenges during the COVID-19 pandemic such as an interrupted supply chain and a decline in the construction sector. But the sector swiftly adopted digital and e-commerce solutions to deal with the new reality.
The plywood sector witnessed a spike in demand for furniture such as tables, laptop tables, and office chairs as work-from-home situations and hybrid work models became the norm.
As a result, the industry witnessed a strong recovery driven by an increase in home furnishing and the gradual revival of the housing market. Hence, the Indian plywood market saw a significant growth phase during the FY23 period, with an estimated value of ₹208.5 billion.
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Growth drivers
Here are the factors driving the growth of the plywood industry in India.
- Urbanisation: By 2047, India’s population is projected to reach 1.7 billion, with approximately 51% living in urban regions. To meet the needs of this urban demographic, India will need to construct around 230 million housing units by 2047. Increasing urbanisation contributes significantly to the demand for plywood, used extensively in both construction and furniture making.
- Construction and renovation projects: There’s a growing trend towards using sturdy and durable materials in construction, alongside a surge in home renovation projects, fueling the need for quality plywood.
- The popularity of semi- and fully-furnished apartments: The rising demand for ready-to-move-in apartments, which typically feature extensive use of plywood in interiors, is a key growth driver.
- Government housing initiatives: Schemes like the Pradhan Mantri Awas Yojana aim to promote affordable housing, indirectly boosting the plywood market as these projects require substantial amounts of construction materials, including plywood.
- Consumer demand for premium and eco-friendly plywood: There’s a noticeable shift in consumer preferences towards premium quality and environmentally friendly plywood variants, emphasising aesthetics as much as functionality.
The competitive landscape
The plywood manufacturers in India are primarily composed of two types:
- Organised
- Unorganised.
Small-scale manufacturing and regional companies comprise the unorganised sector, which dominates due to its affordability and ability to cater to a variety of market needs.
There is a noticeable shift in consumer behaviour towards seamless experiences in discovering, researching, and purchasing products in the post-pandemic era. As a result, organised players with branded products catering to modern preferences are seeing advantages.
Here are the top 5 plywood manufacturers in India based on market capitalization as of March 6 2024.
| Market cap (₹ cr.) | Net profit (₹ cr.) | |
| Century Plyboards | 14624.53 | 361.51 |
| Greenlam Industries | 6770.97 | 142.57 |
| Greenpanel Industries | 4432.4 | 181.8 |
| Greenply Industries | 3216.17 | 52.67 |
| Stylam Industries | 2618.47 | 117.62 |
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Future outlook
The prospects for the plywood sector in India seem promising because of innovation and technological developments. The introduction of advanced manufacturing technologies is expected to boost productivity and quality. Examples of these technologies include computer-controlled cutting machines and automated production lines.
Innovations such as fire- and water-resistant plywood are broadening their uses and satisfying a variety of consumer demands.
Additionally, adopting eco-friendly methods like employing sustainable materials draws in customers who care about the environment.
Nonetheless, issues including a shortage of competent labour and high-quality raw materials continue to exist. The industry is concentrating on creating effective supply chains and funding personnel training in order to address these issues.
Bottomline
Strong growth is being seen in the Indian plywood industry as a result of urbanisation, building projects, and changing consumer tastes. The industry is set for future growth because of eco-friendly initiatives and cutting-edge technologies.
Despite challenges such as labour and material shortages, coordinated efforts to improve supply chain efficiency and skill development offer hope for long-term growth. As the industry continues to adapt and innovate, it remains a key player in India’s infrastructure and furniture sectors, catering to diverse needs and preferences while contributing to the economy.
