Century Plyboards, a leading manufacturer of plywood and MDF, may hike MDF prices by 3% soon. The company has recently hiked the price of particle board by 3% to cover the increased cost of production. Increasing demand for medium density fibreboard has encouraged the company to go for price hike.
CenturyPly’s MDF segment has seen 20% growth in the second quarter over the same period in the previous year. On the other hand, plywood and laminates divisions of the company have registered negative growth during the quarter. Further, the company’s MDF segment has done even better during October. According to the company management, demand for MDF has grown impressively post June 2020 driven by sharp increase in demand for modular furniture. The ready-made furniture (OEM) market has been booming post COVID and the demand from this segment is structural and is likely to remain for longer period.
Further, MDF prices in South East Asia have increased by USD15-20/CBM in recent weeks. Shipping freight too has gone up by similar quantum post COVID. These factors too have further encouraged the domestic manufacturers of MDF to go for price hike.
MDF Demand in South India is higher compared to North India while realisations are lower in South India as compared to North India. However, with government announcing restrictions on imports and levying ADD, this scenario is likely to change in the coming days and realisation in South India too is likely to improve.
Meanwhile, CenturyPly has not yet decided on its proposed MDF capacity addition and may take a final call on the same by next month. The company is now looking at two options – Sitapur in UP or South India for incremental capacity addition. In other words, the company has ruled out brownfield expansion at its Hoshiarpur plant for the time being.