Century Plyboards (India) Ltd, a leading manufacturer of wood panel and decorative products, said its ₹550-crore greenfield factory project is proceeding well and the company is hopeful of commissioning it by FY25.
“The pace of work is good and we are looking to start the plant within FY25 and we are bullish on the particle board capacity expansion project,” Keshav Bhajanka, Executive Director of the company, told businessline.
The existing capacity of the particle board business is 72,000 CBM (cubic metre) per annum and the upcoming factory at Gummidipoondi near Chennai will have a capacity of 2.4 lakh CBM per annum. It will initially focus on serving the domestic market demand, as the capacity utilisation of particle board was 101 per cent in FY23 (102 per cent in FY22). The factory is likely to employ more than 300 people directly.
The company already runs a factory at Gummidipoondi and the new one is coming up on a 30-acre site, which is located about 30 km from the existing one.
Immense potential
The company sees immense potential in the particle board segment along with MDF (medium-duty fibre). Particle board, which is also known as low-density fiberboard, due to its low weight (compared with MDF). It is preferred for its ease of installation, light weight, environment-friendly properties, and uniformity.
The particle board industry size is estimated at ₹5,000 crore and has been growing at 10-15 per cent with a significant upswing in both commercial and residential real estate. Organised players account for about 35 per cent of the market and capture share from imports. However, a large part of the sector is unorganised or fragmented because of numerous small businesses, according to a report by the brokerage house Prabhudas Lilladher.
“We want to grow higher than the industry, going forward,” said Bhajanka. In FY23, particle board business accounted for 5 per cent of the company’s revenue of ₹3,632 crore. The company’s market share in the particle board industry was 3 per cent in FY23.
Century Plyboards embarked on a major capacity expansion involving an outlay of about ₹2,000 crore between FY23 and FY25. Of this, the majority of capex has gone into MDF and particle board businesses, and Chennai expansion is part of that programme. These two businesses’ combined revenue share in the company’s total revenue is expected to increase to 35-45 per cent by 2031, from 23 per cent in FY23.