Kolkata, March 19 (IANS): As Myanmar's ban on the export on Gurjan wood remains in place, Indian plywood major Centuryply is exploring options of sourcing logs from countries in Oceania as well as Europe.
"We are exploring options of bringing logs from Papua and New Guinea and the Solomon Islands. However, logistically these are difficult sources to work with and the grading system is far from satisfactory," company managing director Sanjay Agarwal told IANS.
He said countries in EU have large quantities of temperate hardwood in their natural forests which are managed sustainably.
"We have conducted technical studies and found that the plywood property from such timber (in EU) is equivalent to those from Gurjan in terms of durability and strength. As a long-term measure, we are exploring usage of hardwood from sustainable natural forests," he said.
Myanmar had banned the export of Gurjan logs in April 2014 to conserve its rapidly depleting forests.
According to the data available from Myanmar's forest ministry, the country's wood cover depleted to 47 percent of the land area in 2010 from 58 percent in 1990. However, the country earned more than $1 billion by exporting 1.24 million cubic tonnes of timber during 2012-13.
Although the forests were given their due protection, the ban had upset the Indian plywood industry.
"The Indian plywood industry is dependent on Gurjan since the early 1990s as a ban was imposed by the Supreme Court of India on harvesting forest timber. Since the ban was total and not in a phased manner, it created a lot of confusion in the mind of plywood mills, which are mostly in the unorganised sector," Agarwal said.
According to the plywood maker, the price increaseed by 25-50 percent in some cases just after Myanmar barred export of the said logs.
Except a few value-added grades requiring tough usage conditions like marine applications and others, most of the plywood manufactured in India use plantation timber like eucalyptus or poplar for the internal layers.
"Gurjan is used primarily in top and bottom surface of the plywood as face veneer. In plywood making, the overall contribution of Gurjan in real terms will be less than 10 per cent, but it is the most value-added component and has tremendous notional and aesthetic appeal," Agarwal said.
The company said the plywood market in India is estimated at Rs. 16,000 crore ($2.5 billion) while the laminates and decorative veneers markets are at Rs. 3,400 crore and Rs. 800 crore respectively.
"The market is growing at 7-8 percent and is expected to continue such growth. However, in the Indian economy, only 30 per cent of the ply industry is organised and the rest is in the unorganised sector," Agarwal said.
According to the firm, the demand is high in southern India, especially in Andhra Pradesh, Karnataka and Tamil Nadu.
The company thinks that the Goods and Services Tax (GST) roll-out needs careful implementation as the industry is plagued by unethical practices.
"Since there is a huge unorganised sector at play, the GST has to successfully work towards stopping unhealthy practices in indirect tax," Agarwal said.
The company is expecting to close the current fiscal March 31 at Rs.1,500 crore and reach Rs.1,875 crore during 2015-16.