Falling trend of TDI (Tolylene di-isocyanate) is continuing, thus bringing cheers to the mattress manufacturers. TDI accounts for nearly 30% of the raw material cost for the mattress makers and fall in its price will have substantial positive impact on the cost of production. From a peak of Rs 335/kg in February 2018, TDI price has retreated Rs 255/kg in July and now further down to Rs200/kg. However, this may not bring any good news to the final consumers as the branded mattress manufacturers have hiked the prices of their products to account for general inflation. For example, Sheela Foam, makers of Sleepwell mattress hiked the price of its products by 5% in October.
While TDI price is falling, polyol, another important raw material, price has witnessed inflationary pressure due to depreciation of Indian rupee. It should be noted that majority of the polyol is imported and depreciating rupee will directly affect the price of polyol. Polyol prices have averaged Rs130/kg due to rupee depreciation in the second quarter as against Rs109/kg during the same period in the previous year. According to mattress makers, rise in polyol prices will offset some gains from reduction in TDI prices.
The Indian mattress market comprising rubberized coir, polyurethane foam and spring mattress is primarily dominated by unorganised players accounting for nearly 65% of the market share. And now the war is on to grab this market share. Reduction in GST rate on foam and spring mattresses from 28% earlier to 18% currently gives competitive pricing advantage to organised players. Also, as the economy shifts to a more formal setup when GST and e-way system fully plays out, the organised players in the mattress industry are expected to see increase in market shares.