The Rising Relevance of MDF by Shobhan Mittal Joint MD & CEO Greenpanel
The Rising Relevance of MDF by Shobhan Mittal Joint MD & CEO Greenpanel Part of Greenply Industries Ltd
As per a World Bank report, Asia is one of the largest consumers of furniture, with India accounting for a major share. Moreover, the Make in India initiative is encouraging domestic production of furniture. The WB study states India’s organised furniture market is expected to cross $32 billion by 2019, growing 20% per annum between 2015 and 2020. Simultaneously, its luxury furniture market is projected to reach $27 billion by 2020, growing at a CAGR of 4.1% during the same period.
Like many industries in India, the furniture sector too is primarily unorganised, with handicrafts comprising almost 85% of total furniture production. A new segment speedily making its presence felt is online home furnishings, which is expected to gain greater market share in the coming years as digital penetration gathers pace. Another emerging global trend in furniture making is the steady rise of MDF or medium-density fibreboard. An engineered wood, MDF comprises hardwood fibres bonded together with synthetic resin and wax under high pressure and temperatures rising up to 240⁰ Celsius. MDF has high, uniform density, ensuring it is strong, durable and environment-friendly. Top-quality MDF comes with unique fiber-interlocking technology lending high bonding strength and rigidity to these boards. Such boards have homogenous construction and zero percent latex, making them ideal for painting and polishing.
Add to this the functional features of the new-age MDF like the termite, fungus, and borer resistant, all of which ensures the boards are perfect for contemporary and carved furniture as well as indoors panelling. Besides, pre-laminated MDF is moisture-resistant, scratch-free and extremely easy to maintain. In the days ahead, India’s furniture market is poised for greater growth due to the collateral benefits from official programmes. Recently, FDI inflows in the realty sector have gathered momentum. Programmes such as the creation of 100 Smart Cities and Housing for All by 2022 are poised to increase urbanisation. Naturally, these initiatives will spur growth in the furniture industry. The entry of global DIY furniture brand IKEA is also bound to drive demand for MDF, given its ease of usage in CKD (completely knocked down) furniture. In fact, IKEA is the biggest consumer of MDF worldwide, which in itself is the biggest testimony to the quality and durability of MDF.
Additionally, increasing demand in retail, tourism and hospitality, as well as the hospital sectors, also drives higher sales in the furniture industry. Demand for residential, commercial and office realty also leads to higher sales in the furniture industry. Universally, MDF and particle boards account for 80% of wood panels used, while plywood barely has 15–20% share. The situation in India is, however, the opposite as plywood continues dominating the market with about 80–85% consumption. Nonetheless, there is a rising awareness about the limitations of plywood and the advantages of MDF, especially the latter’s speed, flexibility and convenience in furniture making.
Furthermore, thanks to the Centre’s labour-promoting initiatives such as MGNREGA, labour rates have jumped sharply in India. Plywood entailing a labour-intensive process, its costs have risen too. What’s more, in the digital era, people no longer have the patience to hire a carpenter and wait for months as their plywood is transformed into customised furniture. The craftsmanship of carpenters working manually with plywood is also not assured. Today, people seek speedy installation and generally want to see their house furnished in days. In such situations, MDF is a perfect choice. The rapid popularity of online entities such as Urban Ladder and Pepperfry, among others, is also facilitating faster growth of MDF since the machine-made furniture sold in these outlets is primarily MDF or particle board, with plywood trailing a distant third. Although the MDF market in India is only around Rs. 1,700 crores presently, it is growing between 17% and 20% annually. It’s a matter of time before MDF captures the largest share in India’s furniture market – just like in the rest of the world.
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