Region-wise national agro-forestry plan on the anvil

By Ashwini Kedia

Costaa Woods is a multi-disciplinary wood enterprise based in Kolkata, with production facilities spread across the width of the country. Our manufacturing units are located in Arunachal Pradesh, Meghalaya, West Bengal and Gujarat.

Our primary principle is to procure wood from sustainable and renewable forest resources only, and then convert it into various products such as veneer, lumber, door frames and flush doors, plywood and blockboard, solid wood flooring, outdoor decking and wooden industrial pallets.

We use approximately 15,000 cubic metres of wood each month to produce various products across different units. All our units have state-of-the-art manufacturing facilities and we strive to grow sustainably together with all our stakeholders: employees, suppliers, clients and service providers.

We also run a sports infrastructure building company called Costaa Sports, where we take up turnkey projects to build courts for squash, basketball, lawn tennis and badminton.

Cautious re-start

All our units commenced business immediately after the ‘Lockdown 2.0’ got over on 22 May, taking care to implement all possible precautions against Covid-19 infection. The start was extremely slow with uncertainty looming large on management’s and employees’ heads; but it has been only upwards since then.

Most of the projects which we had already commenced before the lockdown are getting completed slowly since the unlock process has started. The time lines have changed drastically, but none of the ongoing projects got canceled.

A lot of thinking went into our business strategies to meet the vagaries of the ongoing pandemic and its disruptions across the globe, among them:

•         lower credit periods to our dealer and distributor network;

•         volumes to remain stagnant but margins to increase;

•         standardisation of product lines and shifting fully to certified wood;

•         enlisting our products on e-commerce platforms;

•         fresh focus on digital marketing; and

•         creating a complete value based eco-system.

Supply chain

From what we have experienced since business restrictions began easing globally, there has been no major disruption in raw material supply from Europe (Germany, Belgium, France, Belarus or Russia) or from the Americas, or even West African countries.

The volumes are definitely much lower than pre-Covid times; but lower volumes perfectly offset the lower demand and avoid any over-supply and ruining the market!

Yes, a lot of our panel processing lines and components were imported from China until now. This would definitely change or stop because a lot of Indian manufacturers are stepping up to provide us with required infrastructure here.

One of our main objectives has been to recover money which was stuck due to the unprecedented Covid-19 disruption. However, I must say that money inflow has eased considerably with our trusted dealers and distributors behaving with utmost responsibility and maturity.

We have kept our expansion plans on hold. After a fair and a more clear understanding of how the markets recover, we will decide how and where to take forward our expansion plans.

Support to MSMEs

For organisations and companies that have had a clean track record with banking liabilities, I don’t see any challenge in obtaining fresh finance for capacity building or expansion. There are various finance schemes launched by the Union and state governments, especially for micro, small and medium enterprises (MSMEs).

Banks and non-banking financial companies are all loaded with excess liquidity and are looking for good strong new projects to support.

Industry associations – especially the Federation of All-India Timber Merchants, Saw Millers and Allied Industries, which is the parent body of all wood-based industries – has been extremely proactive in representing grievances and requirements to various government departments.

Thankfully, the Centre has taken note of various representations made by the federation and has clearly highlighted that furniture manufacturing in India will be given a major boost and relevant support.

During the Covid-19 lockdown more than 150 scientists and technocrats from leading research agencies (Forest Research Institute, Institute of Wood Science and Technology, Indian Council of Forestry Research and Education, and Indian Plywood Industries Research & Training Institute) collaborated to formulate a region-wise national agro-forestry plan. This is under rigorous discussions and deliberation before being adopted.

The focus will now shift to agro-forestry for more industrial wood production and consumption. Furniture manufacturing hubs and clusters will be developed all across the country. Our dependence on China for furniture requirements has to go down considerably.

‘New normal’

The various legislations on sourcing timber in India, I would say, are broadly adequate; but some regulations need to be relaxed considerably. The Transit Pass system for timber/lumber that is imported or sourced from ‘trees outside forests’ must be abolished.

In India 95% of wood supply is either through imports or from plantation timber. The draconian Transit Pass system was put in place to check illegal felling of trees from forests; but it amounted to just 3% of wood supply!

Yes, the focus now should be on plantations of different indigenous tree species across the country, thereby greatly reducing our dependence on imported wood and saving valuable foreign exchange.

With respect to consumption of timber I certainly feel optimistic! There will be a surge in single-owner facilities such as work stations for the father and (working from home) mother, children’s furniture suited to online classes, etc. Even though offices and commercial properties face a slowdown, in time there will be a demand for furniture re-oriented to accommodate physical distancing!

Market expectations are changing and certainly will change furthermore. People will look for innovation in functionality of furniture design; and we are already working on creating panel products which have virus-resistant surfaces. So yes, a lot of new and interesting things are lined up for the near future.

Advantage wood

Consumption of wood and allied products will only increase gradually and steadily. After banning wood for 27 years, the Central Public Works Department recently rescinded it order – the first sign that the Union government is recognising the carbon sequestration quality of wood!

According to various reports from Indian and global research agencies, The family of Corona viruses remains very little time on wood surface compared to glass, aluminium or any other metal surfaces. So wood as a raw material for building and furniture making has no major challenge, except its easy availability!

Going forward, our websites will become our business card, showroom and product store; working spaces (offices and workshops) may become increasingly flexible, multi-functional and technologically advanced spaces.

However, furniture that is made from carbon-neutral material, comes from certified sources and is user-friendly will always prevail over others. All we need to do is work smart and make adequate provisions for any unforeseen business circumstances in the future.

 

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