Century Plyboards to expand plywood production capacity by 30%

Wood products maker Century Plyboards plans to expand its plywood production capacity by around 30 per cent in the next 12-15 months, with a capital expenditure of around ₹140 crore.

The planned production capacity expansion will involve both greenfield and brownfield projects. The Kolkata-based company, which is the market leader in the country’s plywood industry, is working on setting up a new facility with an investment of around ₹100 crore.

“Currently, we are working on setting up one new facility. It will be either in Punjab, or in Uttar Pradesh, or in Odisha, or in Andhra Pradesh. The decision on the location of the new facility will be made on commercial viability. Alongside that in all our existing facilities, we are going for brownfield expansions. We are looking at augmenting our capacity at existing facilities by adding balancing equipment and new machinery,” Century Plyboards (India) Executive Director Keshav Bhajanka told businessline.

In the Plywood segment, the company currently has a production capacity of 339,600 CBM per annum. In the first quarter of this fiscal, capacity utilisation stood at around 75 per cent.

The plywood market is presently estimated at around Rs 27,500 crore with around 30 per cent of it being operated by organised players. In the overall plywood market, Century Plyboards garners around 8 per cent share. In the organised segment, the company controls anywhere between 25-30 per cent market share.

The organised plywood market is growing at a high single-digit rate annually. The company expects the country’s plywood industry to double within the next six to seven years.

“Overall our objective is that we are going to grow faster than the industry. So we are targeting more than 10 per cent growth. Definitely, our market share is only going to increase from here,” said Bhajanka.

Due to the sharp rise in input costs, the company hiked prices in the Plywood segment twice during this fiscal year --around 2 per cent in both the first and second quarters. In Laminates, it hiked prices once-- around 3 per cent in the second quarter.

“Two-three years ago, the bulk of the raw materials used to come from domestic agroforest. But during the recent past demands have outgrown supply. Because of that, prices have shot up in the domestic market. Because of this there is more viability to import core veneer from countries like Vietnam and Brazil,” the executive director pointed out.

In the Rs 8000-crore Laminates industry, the company has a market share of around 8 per cent. During the last financial year, the Laminate segment contributed around 17 per cent to Century Plyboards’ total revenues. Among its product portfolio, the company exports its Laminates only.

“In the last financial year, the company’s exports of Laminates stood at around Rs 150 crore. And within the next three years, we are going to double this to Rs 300 crore,” Bhajanka added.