Century Plyboards will triple its MDF capacity by FY24

Century Plyboards is looking to triple its capacity of MDF (medium density fibreboard) to 1,800 m3 from the current 600 m3 per day through creation and brownfield projects for an estimated total investment of around ₹850 crore.

The company is also planning to set up a new plywood manufacturing plant in Punjab at an estimated investment of around ₹200 crore.

Sajjan Bhajanka, chairman of Century Plyboards, said the proposed plant will likely be the largest plywood unit in the country with a total capacity of 1 lakh sq.m. per day. “It will take place in two phases; in the first phase we will have 50,000 m² per day and in the second phase we will add another 50,000 m² per day. We are in the process of buying land for the factory,” Bhajanka said. Activity area.

MDF enlargement

The new MDF plant in Andhra Pradesh is expected to start operations by September 2023, while the brownfield project of its existing unit in Hoshiarpur in Punjab would be operational by September-October this year.

“We have purchased the land and machinery for our new factory in Andhra Pradesh which will likely entail an investment of around ₹600 crore. This is expected to happen by September 2023. We are also expanding our existing MDF unit in Hoshiapur by about 60% from 600 m3 per day to 1,000 m3 per day with an investment of ₹250 crore,” he said. declared. .

Apart from that, the company is also in the process of optimizing the capacity of existing factories. It had already increased the capacity of all its factories by more than 20% in the past year.

“As for MDF, whatever capacity has been available so far has been very well absorbed by the Indian consumer,” the company said in its recent investor presentation, noting the strong demand for the product in India. .

Increase in consumption

MDF consumption in the country is expected to increase further as a number of furniture parks are expected to spring up in the near future, he said. Century Ply’s MDF and particleboard segments recorded the highest EBITDA margin ever, with MDF and particleboard posting margins of 32% and 29% respectively in the fourth quarter ended March 31, 2022. This was driven by demand in both categories.

Despite continued input cost pressure in the core plywood and laminate segment, the company was able to alleviate much of the pressure on its gross margin by taking corresponding price increases, albeit with some lag. and also through its operating leverage, he said.

“We took three to four price increases last year and the total price increase was almost 8%. Also this year we are looking at a similar price increase,” he said.

Published on

May 31, 2022

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