MR. AVTAR SINGH BHULLAR, NATIONAL SALES MANAGER–MDF/ PARTICLE BOARD DIVISION, CENTURY PLYBOARDS (I) LTD
Century Group’s MDF and Particle Boards division has reached its pre-covid sales, and has been utilizing its full capacity since July successfully. This division is hopeful to meet the last year’s sales numbers by March 2021. During interview with The Ply Reporter, Mr. Avtar Singh Bhullar, National Sales Manager, views that having a hit of 3 months of Covid period will probably not allow us to register growth in this FY and even if matches up the last year sales, it will be a great achievement. He also informed that Century PremiumPLUS and Pre-laminated boards demand ratio is improving because of increasing demand of readymade furniture from organized houses.
After initial two months of Covid phase, how was the recovery after May for Century MDF?
The month of May and June were at 30% of the normal sales. From July onwards we scaled back to 100% in both MDF and Particle Board. This recovery was quick because the imports of readymade furniture were hit, since these were largely sourced from China, Malaysia and other countries. Also Covid-effect led to spurt in demand of readymade furniture across the country and hence there was quick recovery in sales. The present demand of MDF & Particle Board is coming from big and organized OEMs. The traditional furniture making has not picked up yet but the organized furniture makers like Spacewood, Godrej, Pepperfry etc have revived quite well in terms of sales and the raw material demand.
But we see a dull movement in real estate, so from where comes the spurt in demand of furniture?
The demand is not from real estate, but from the individual household construction work, which was on hold due to lockdown. Another factor is that the leading IT companies have started “work from Home” culture and begin to provide their employees a basic work infrastructure at their homes. All these requirements pushed the demand for organized machine-based furniture making.
What is your view; whether this demand looks sustaining for long time?
The demand will sustain and grow as the domestic machine based furniture making is gaining pace and emerging as an alternate source against readymade furniture imports. Furniture has been placed into Non-essential goods category by the new government policy and the imports of furniture would become difficult day-by-day. This will give rise to local manufacturing resulting in increased demand of MDF & Particle Board in the country. With recovery in economic activities, I believe the demand will grow further in the coming months and years to come as well.
But more of particle board is used in furniture product, then why MDF demands grew?
The application of MDF is increasing in Wardrobe, Kitchen, Furniture, etc. by replacing commercial ply. Besides, the commercial plywood segment production was hampered during lockdown. Postcovid the plywood demand was affected and a chunk of this demand is shifted to high-end MDF like PremiumPlus of CenturyProwud. The network dealing in commercial plywood is now turning towards highend MDF, which is helping MDF sales grow, and a faster recovery.
PremiumPlus product gives retailer at least 10 percent margin. With the shooting up of demand for PremiumPlus, its production has reached to around 20 percent of our total MDF production, which was at 10-12% before Covid.
ply. Besides, the commercial plywood segment production was hampered during lockdown. Postcovid the plywood demand was affected and a chunk of this demand is shifted to high-end MDF like PremiumPlus of CenturyProwud. The network dealing in commercial plywood is now turning towards highend MDF, which is helping MDF sales grow, and a faster recovery.
How much quantitative change is noticed in PremiumPlus of Century MDF, in pre and post lockdown period?
There has been an increase of around 40%, in this category. The growth in this segment has been exponential due to commercial plywood replacement. Even the small plywood retailers are now asking for Premium Plus grade of MDF.
What is the difference in PremiumPlus & normal MDF?
PremiumPlus has far better properties in terms of High Moisture Resistance, Higher Density, anti-borer and anti-termite properties. Higher density properties of Premium Plus compared to normal MDF is being promoted against commercial ply in retail segment. Normal MDF is an OEM segment product, but PremiumPlus is for retail based distribution network and the retailers earn good margins in this category similar to what they earn while selling plywood. PremiumPlus product gives retailer at least 10 percent margin. With the shooting up of demand for PremiumPlus, its production has reached to around 20 percent of our total MDF production, which was at 10-12% before Covid.
What are the prospects in Pre-laminated MDF category?
PrelamMDF sales have also increased post-covid by 15 to 20% on an average. Again, most of the demand is coming from the organized furniture makers or OEM’s. My hypothesis is that the growth of engineered panel industry is due to increased demand by readymade furniture industry as a substitute to imported furniture. This is the reason the organized and mechanized furniture manufacturers are overloaded with demand. The demand for PrelamMDF, which used to be below 15% of total production capacity has also increased by 5 to 7%. We consider Prelam as a value added product compared to the plain MDF. This is a big shift in the market as the customers are getting high-end MDF as a replacement of commercial plywood.
So what is the prevailing scenario now?
We are running our plant at a full capacity in Particle Board and MDF both. This will continue in future also as we are confident of having good growth in the next financial year. We are also thinking for expansion by adding more production capacity in the near future.
There are thicknesses sold at every half millimeter e.g. 16mm, 16.5 m, 16.75. 17.5, etc. That’s confusing and cannot be termed as standard practice. What is your view on this?
In the development phase of any product, there comes lot of innovations in which the product is first utilized, then optimization is followed by standardization. For example if someone used 8.0 mm thickness and later on realized that with reduced thickness, say 7.5 mm can also be good for the same application with no difference, then thickness change is accepted by the customers. This in reality is not a wrong practice but a part of product optimization and innovation. If you recall, earlier the Ambassador car was made with very heavy steel but later on cars became lighter and more efficient with innovation in steel technology.
we use Virokill in PrelamMDF or Prelam Particle Board as it is a kind of a finished product. Added advantage to the customer is that they are benefitted with Virokill technology, without price increase of our Prelam MDF and Prelam Particle Board.
Was it the requirement of the market or the manufacturers themselves did it?
Actually there was no such specific requirement in the market but the innovation has happened for optimization of the product. If the manufacturers observe that the strength of 18mm MDF made earlier can be given into 16.75 mm with new technology and innovation, the manufacturers will definitely go for it. Secondly, there is competition and hence optimization is inevitable.
Don’t you think, product standardization is must else it may create trouble and confusion for buyers sometimes?
I disagree a bit with respect to panel industry. In plywood also, the thickness is lesser than claimed. It is also because plywood is a natural product and when we compress it, the final product measurements are not exact. But MDF, which is a machine based product, when we say 16.75mm then it will be actual 16.75mm. Therefore, MDF has greater possibilities for optimizations. Whereas, there will always be a difference in the declared and claimed thickness of plywood, depending upon the species of wood used in manufacturing plywood.
What is the growth of MDF in other non-furniture category application like Routing, Jali, Shoes, Gift box, PU coating etc?
The growth is visible mainly in furniture category that also in machine based. There is no other operation like routing, jaali or other uses of MDF in these furniture manufacturing units. Coating and polishing is done after making furniture. Therefore the current demand of MDF from other segments other than machine based furniture manufacturing is less.
How is Century placed in thin MDF category?
Few players have higher capacity to produce thin MDF. Our production of 6mm and lower thicknesses is 40%. Century Prowud MDF range starts from 1.9mm thickness to 35mm. Thin MDF is majorly used in handicrafts and other local furniture manufacturing.
Is there any possibility of price increase in MDF?
Till date there is no such price increase but we expect it will be increased soon as it is due for a very long time. The cost of manufacturing MDF has increased many folds but the selling prices are constant for a very long time. Sometimes the market forces don’t allow you to increase price, but the industry is hard pressed and it would like to recover the increased manufacturing cost.
Century Group has launched Virokill technology that is available at present for Laminate, Plywood. Do you see it will benefit to MDF and Particle Board categories also?
Century Group has developed the Virokill technology in-house. Being part of Century Group it has benefited MDF & Particle Board as well and we have also developed Prelam MDF and Prelam particle board with the same formula. The Virokill technology is also being used in plain plywood but not in plain MDF because when we use MDF the surface is painted, coated or laminated and not left open. Thus, we use Virokill in PrelamMDF or Prelam Particle Board as it is a kind of a finished product. Added advantage to the customer is that they are benefitted with Virokill technology, without price increase of our Prelam MDF and Prelam Particle Board.
Do you see any sales growth after Virokill feature is added to the products?
Yes, we are seeing a good demand as the customers have become health conscious. With the use of Virokill technology the surface of the furniture is virus free and it is safe for families and friends.
In Century Prowud how many dealers’ network do you have at present?
We have about 1000+ stockists. We have avoided the distributor channel for this product as we want to interact directly with our customer base. MDF & Particle Board division has no warehouses and all supplies go directly from the factory. We have a PanIndia presence and our channel partners are spread across the country.
What are the plans for value added products like UV coated boards, embossed MDF, flooring etc?
We are offering embossed MDF, but its sales are mainly in low cost furniture making. We do not have any plan for UV coated board manufacturing and currently our existing capacity is fully sold out. Therefore, we are not experimenting with any other value added products, but certainlywith the new future expansion coming up we will introduce more value added products.
Is target sales for FY 20-21 till date has recovered the sales loss after the first quarter?
No, we have not recovered till date but hopefully by March 2021, we will meet the last year’s sales numbers. Hit of 3 months of Covid period will probably not allow us to register growth in this FY and even if we match up the last year sales, it will be a great achievement, as we will be selling the entire last year sale in the nine months of current financial year.