Driven by revival in the housing segment, Century Plyboards expecting 20-25% revenue growth in FY24

From Bengal to Punjab and from Punjab to Tamil Nadu and Andhra Pradesh- Kolkata-headquartered Century Plyboards (India) Ltd is spreading its wings with its manufacturing bases with the clear intentions of emerging as the largest player in the country’s Rs40,000 crore wood panel industry. Number (both volume and value) does matter for them, but what is more important for them is to remain mission-driven. And the mission is ‘Sarvada Sarvottam’ (always the best). Speaking to Bizz Buzz exclusively, Keshav Bhajanka, a Warwick University alumnus and Executive Director, CenturyPly, spells out the company’s plans to make it to the topmost slot

How big is the overall wood panel business in India?

The total market size of wood panel industry comprising plywood, MDF, particle boards, laminate is estimated to be around Rs 25,000 crore. (There are some other reports which suggest that the market is even larger at close to Rs 40,000 crore- organised and unorganised sector put together.) Out of this MDF market is estimated to be nearly Rs 4,000 crore, Particle Board market is around Rs 3,000 crore, laminates market is estimated to be close to Rs 6,000 crore and the plywood market is around Rs 12,000 crore.

What is Century Plyboards’ current market share?

For the last three years, our market share has been over 20 per cent. Driven by a revival in the housing segment, the company is expecting 20-25 per cent growth in revenue this fiscal.

You are present in all the sub-segments of the wood panel industry. What are your capacity utilisations in all these sub-segments?

In the plywood segment, our capacity utilisation is around 75-80 per cent, in the MDF segment our capacity utilisation is almost 100 per cent (after 60 per cent capacity expansion, it will be 100 per cent), in the particle board segment the capacity expansion is 100 per cent and in the laminates business our capacity utilisation is nearly 80 per cent. We are looking to add 3,60,000 cubic metres (CBM) per annum capacity by FY25.

Where will this additional capacity come from?

Century Plyboards (India) Ltd is setting up a new greenfield unit for manufacturing particle board in Tamil Nadu at an estimated investment of over Rs 500 crore. It is looking to add 3,60,000 cubic metres (CBM) per annum capacity by FY25. Our existing capacity for particle board is close to 75,000 CBM per annum and the capacity utilisation for the year ended March 2022 was at 97 per cent.

We are also exploring putting up another MDF unit in Uttar Pradesh, very soon. In fact, we had decided to come up with a particle board unit in UP long time ago. However, it could not move ahead with the plan due to some licensing issues but that has now been cleared.

What about your plans at Hoshiarpur in Punjab and Badvel in Andhra Pradesh?

Yes, work on brownfield MDF expansion at Hoshiarpur in Punjab is in full swing and is likely to come on stream next fiscal. Our upcoming greenfield MDF project at Badvel in Andhra Pradesh is also likely to be commissioned by the second half of FY24. The greenfield project for laminate project in Andhra Pradesh is also expected to come on stream in Q2FY24. At Hoshiarpur, we are making an investment of Rs 320 crore, while in Andhra Pradesh investments will be made in phases. In the first phase, we will be coughing up nearly Rs 800 crore, which is our largest investment so far. Subsequently, in the second and third phases, there will be further capex investment.

The company is looking to triple its MDF (medium density fiberboard) capacity to 1,800 CBM from the current 600 CBM per day, and is looking to invest significantly over the next three years till FY25 in both brownfield and greenfield projects. So, we are on an overall expansion mode.

Where will CenturyPly stand once all these expansion plans get off the ground?

We have drawn up a clear cut roadmap to become the largest player in the wood panel industry in the country. We will be the market leader. But more importantly, we would like to be known as the ‘most respected player’ in the field. Mind you that we are always drive by the mission laid down by our chairman (my father, Sajjan Bhajanka), which is about Sarvada Sarvottam (always the best). To realise this, we can’t keep doing what we have been doing in the past. We need to do things differently, to try out new things.

Being a company from Bengal (from the East), what has been your experience of working in a greenfield project in Andhra Pradesh?

I would say it has been one of our best experiences. The local State government has been extra ordinarily supportive. Although it is a private sector project, at every stage we felt as if the State government has been there on a partnership mode. From clearing everything at a rapid pace, offering electricity connection to offering a dedicated pipeline- the state has played an extremely supportive role, all along.

How much do you export now and with the expanded capacity, would you lay more thrust on exports?

We export our laminates all over the world and the current value of laminate exports is nearly Rs 150 crore. We have lined up plans to take the figure up to Rs 300 crore within next two-three years. We have started exporting our MDFs to countries in South East Asia and Middle East and the current value is close to Rs 100 crore. We will be focusing more aggressively on these markets. To most of these countries, we export our products under our own brand name and in some countries we have joint ventures with some local partners.

How grave or what is the magnitude of the problem of fake plywood and what are you doing about it?

Remember that CenturyPly operates in a space where more than 50 per cent of the market is dominated by the unorganized sector. And the magnitude of the problem of fake plywoods is really large. Having said this, let me add that innovation often gets triggered by need. I felt the need to stop the use of fake plywood. There was rampant sale of fake plywood and customers had no way of identifying the fake from authentic ones. Necessity being the mother of invention, I wanted some mechanism to be there to identify the fake plywood. That’s how the Promise App came up. By scanning the QR code on each of our products through this app, a customer can identify a real product from a fake one.