Iran-US tensions hit Yamunanagar’s plywood industry

The plywood industry of Yamunanagar district is grappling with a deepening crisis triggered by rising raw material costs. The war of Iran and the United States has also cast a shadow on the industry as the import of essential chemicals from Arab countries has adversely affected the production. The global situation has led to a sharp rise in input costs, threatening the stability of the industry.

According to experts associated with the industry, the supply of crucial chemicals used to manufacture plywood products such as formalin, phenol and melamine has been severely affected. The cost of chemicals has surged after global tension erupted due to war between Iran and the United States. Similarly, the prices of other key inputs, including poplar wood have risen steeply, putting immense financial pressure on factory owners.

“The price of the formalin is Rs 33 per kg at this time, which was Rs 18 before the outbreak of war between Iran and the United States. Similarly, phenol which was previously available at Rs 85 per kg, has now reached to Rs 160 per kg. Now, the rate of melamine is Rs 115 per kg, however it was Rs 80 per kg before global tension,” said Anil Garg, senior executive member of the Haryana Plywood Manufacturers Association.

As per available information, these chemicals, largely imported from Arab nations, are essential for producing adhesives to prepare plywood products and the availability of these chemicals has declined sharply. The conflict has affected the movement of cargo ships, leading to delays in arrival of imported materials. The traders say that even when orders are placed, there is no guarantee of timely delivery, further complicating planning and production schedules. Moreover, domestic production of these chemicals is limited, leaving the manufacturers with few viable options.

“After the ease of geopolitical tensions, the supply chain will take time to return to normal,” a trader said, adding that the current crisis has forced many plywood factories to operate at reduced capacity.

Ajay Garg, owner of Shri Hari Plywood, Jagadhri, said the production had slowed down in most of the plywood factories of the district. “The sudden increase in prices of raw materials, mainly poplar wood cost, is making it extremely difficult to sustain production at previous levels. We are forced to cut down production,” said Ajay Garg.

As per market sources, the rate of poplar is Rs 1,600- Rs1,700 per quintal this time. “The weak supply chain and rising operation costs have compounded the challenges, pushing the sector into a precarious situation,” added Ajay Garg.

The shortage of chemicals and the rising costs are affecting the livelihoods of thousands of families directly and indirectly dependent on the industry. Workers, transporters and small traders are among those hit the hardest. The plywood industry provides livelihood to thousands of people and if the current situation persists for a long time, it may lead to sharp rise in unemployment.

Assam and West Bengal Assembly elections have also adversely affected the plywood industry of Yamunanagar district. The labour work at most of the peeling units are done by the labourers belonging to Assam and West Bengal. “Due to the Assembly elections of Assam and West Bengal, the labourers have gone back to their home districts, therefore the acute shortage of labour has affected the operation of most of the peeling units in Yamunangar district,” said a plywood manufacturer.

Yamunanagar district, widely known as a hub of the plywood industry in India, is home to about 350 plywood factories, along with nearly 400 peeling units and several other allied industries.