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India’s biggest timber cluster at Kandla is staring at a dark future, with fears of production suspension, leaving workers in big numbers in the last two months due to the Covid-19 situation.

Indian wood products manufacturers fear suspension of production activity if the severe liquidity crunch caused by the disrupted payment cycle continues through May. The timber units in Kandla are presently working at 50% capacity.

Seventy percent of India’s timber requirement is imported in Deendayal Port trust (formerly Kandla port) and Adani Group’s Mundra port. The Indian plywood and sawmill industry around Kandla supply processed wood to the wholesalers in all over the country.

Navneet Gajjar, president of Kandla Timber Association (KTA) said: ”The usual cycle of payment is 60-90 days, but nearly 30% of the amount which comes to about Rs 200 crore is stuck because of lockdown-like situation and voluntary shutdowns by many industrial associations”.

”Banks on the other hand refused to extend letters of credit for our timber import, which has only added to the problems as nobody can afford to default on bank payment,” Gajjar said.

Mukesh Bhartia, a plywood factory owner, said: ” It doesn’t make any sense to have stocks when there is no demand in the market. If the situation continues for two more weeks, we will have to shut our units”.

The plywood and timber processed in India is used in the real estate industry, furniture, veneer, particleboard, toys, paper and others. The timber is imported from New Zealand, Malaysia, Africa countries, Latin America and European countries.

Hemchandra Yadav, vice-president of KTA added, ”The labour force which comes from regions have already started leaving for the fear of lockdown and reduced working hours”.

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