Century Plyboards (India) Ltd, a leading manufacturer of wood panel and decorative products, has opened its new ₹1,000 crore integrated wood panel manufacturing plant over a 100-acre site at Badvel, YSR Kadapa district in Andhra Pradesh and the company has planned to invest another ₹1,000 crore.
The new factory, which is the company’s largest integrated wood panel production complex, was inaugurated by the Chief Minister of Andhra Pradesh YS Jagan Mohan Reddy on Saturday. Before the launch of the Badvel facility its biggest greenfield project was in Hoshiarpur, Punjab where it incurred a capex of ₹325 crore. “South India itself is a huge market for MDF (medium density fibre) and availability of raw material is very good in Nellore and adjoining districts. The location of the plant is very conclusive as it is very well connected by road network to most parts of the country, particularly the South and East where we are looking to grow our business. Also, port connectivity will help us grow the laminates business. Overall, we chose this place due to the market, raw material security and the strong government support by way of dedicated water pipeline and electricity,” Keshav Bhajanka, Executive Director, Century PlyBoards (India) Ltd told businessline at the factory.
The company invested close to ₹1,000 crore in this greenfield project for new capacity of laminate, MDF and PVC. The first phase of production comprises 2 large-size press of laminates, which is operational. The MDF unit and PVC Unit are in the advanced stage of commissioning.
The new unit will increase the company’s production capacity in the MDF plant by 950 cubic-metre, which will double its footprint in MDF. “We have planned more investments in this location. In the second phase, we will invest another ₹1,000 crore in further capacity expansion,” said Bhajanka.
Catchment area
For raw material, the ₹3,621 crore company has identified a catchment area of 125-150 km and within this, the raw material for the factory production will be sourced. It has already started distributing saplings and, so far, the company has distributed saplings for more than 1,500 acres. In the current phase, it will be distributing saplings for 3,500 acres. “Next year, we will be supplying 1 crore saplings to the farmers. Overall, it will cover 10,000 acres within this region,” he said.
In the next 3-5 years, this project is expected to generate direct and indirect employment for more than 2,000 people.
While most of the company’s businesses are growing in double digits, MDF is growing faster at 20 per cent plus and the scope for growth is seen as quite substantial.
India’s MDF industry is valued at ₹5,000 crore and is growing at a faster pace than others. Organised players account for 65 per cent of the market and capture share from imports. Currently, MDF, the plywood ratio across the world is nearly 70:30, whereas in India it is ~20:80 expected to become 50:50 soon thereby indicating strong growth potential for this industry. MDF is increasingly used as a substitute for low to medium-quality plywood, as it is 30-35 per cent cheaper, according to a report by the brokerage house Prabhudas Lilladher.
(This correspondent was at Badvel at the invitation of the company)