US-China trade war to benefit Indian laminates manufacturers

Trump administration proposes 10% import duty on Chinese products, Greenlam and Responsive Industries stock up

Intensifying trade war between the United States and China, the Donald Trump administration in the United States has proposed 10 per cent import duty on Chinese products including vinyl flooring, laminates and furniture. Imposing such duty would benefit Indian exporters like Greenlam Industries and Responsive Industries.

In the latest spell of trade war, the Trump administration announced that the US is weighing imposing tariffs on a further $200 billion on import of Chinese products. The proposal is set to cover vinyl flooring, laminates and furniture. The United States imports in excess of $4 billion worth of these products from China of which vinyl flooring contributes $1.78 billion.

“We are going to be the biggest beneficiary of this move. We are not only largest player in vinyl flooring in the country and also export our products to USA and other developed countries like Europe,” said Rishabh Agarwal, Managing Director, Responsive Industries Ltd (RIL).

RIL exported vinyl flooring products worth of $54 million in FY18 and is expecting to ramp up exports to USA on an incremental basis by $10 to $15 million in contract sheet vinyl flooring alone.

“We have been strengthening our distribution network in USA to increase our high value added vinyl flooring products exports. The US and Europe contributes 50 per cent of global vinyl flooring sales. We are the only manufacturer and supplier of non PVC flooring in India with exports to USA,” Agarwal added.

With an annual turnover of Rs 11-bn, laminates maker Greenlam Industries aims to increase its sales to the United States.

“Greenlam exports around $5-6 million worth of laminates to the United States. At this point in time, it is difficult to assess the increase in exports, if any, being the US a large player branded laminates. But, there is a possibility of shift in consumption from bulk to the branded products which may benefit Indian players like us,” said Ashok Sharma, Chief Financial Officer, Greenlam.

Reacting to the news, however, share price of Responsive Industries jumped by 5.74 per cent to close on Friday at Rs 99.45 apiece. Following the move, share price of Greenlam and Greenply Industries also moved up by 1.54 per cent and 2.63 per cent to close at Rs 980 apiece and Rs 216.75 apiece on Friday respectively.

PROPOSAL MADE 

• In the latest spell of the trade war, the Trump administration announced that the US was weighing imposing tariffs on a further $200 billion on import of Chinese products
• The proposal is set to cover vinyl flooring, laminates and furniture
• The US imports in excess of $4 billion worth of these products from China, of which vinyl flooring contributes $1.78 billion