Plywood and laminate - maker Century Plyboards is looking at a Rs 300 - crore capex as it plans to expand manufacturing capacities across medium density fibre - board (MDF) and particle board segments. While Rs 150 crore is expected to be invested for Particle Board factory at Sitapur in Uttar Pradesh, an equal amount will be spent towards expansion of capacities at its MDF unit in Hoshiarpur, Punjab.
According to Keshav Bhajanka, Executive Director, the company has a strong cash flow of around Rs. 175-180 crore which will be used for expansion plans. “Expansion plans through a mix of internal accruals and debt,” he told BL. The Sitapur Particle Board unit will have a capacity of 500 cubic meters per day; nearly three times the size of its present particle board manufacturing capacity. Century Ply’s existing particle board manufacturing capacity stands at 180 cubic meters per day. Work on the factory is expected to start soon.
According to Bhajanka, the expansion of the MDF unit (at Hoshiarpur) is because of increased demand. The existing unit has seen a capacity utilisation of around 85 per cent. “We have to ramp up capacity in order to cater to the rising demand. Unless we do so, we lose market share,” he told.
Century Ply will enhance capacity by another 75 per cent or by 450 cubic meters per day. Its present capacity stands at 600 cubic meters per day. So far, Rs 350 crore has been previously invested in the Hoshiarpur unit.
Century Ply reported a near flat net profit for FY19 at Rs 159 core; while its revenue from operations stood at Rs 2,264 crore — a 15 per cent increase.