The Hindu Business Line : Greenply plans to enter branded furniture sector

THE city-based Rs 254-crore Greenply Industries Ltd, one of the leading players in the organised plywood and laminates industry, is planning to make a foray into the branded furniture segment.

According to Mr S.P. Mittal, Chairman, the company has recently appointed a consultant to survey the furniture market in India. At present, there are only a few branded players in this sector.

The company is also negotiating with a number of foreign players with whom they might have an arrangement. Mr Mittal, however, ruled out any joint venture with the foreign player and added that the proposed furniture business would be a part of the Greenply Industries.

For the furniture business, Greenply Industries will have to set up a new plant. According to the Chairman, this new business, which would be a forward integration of its existing operations, would entail a fresh investment of Rs 60-65 crore.

Funds for the new business would be raised by way of debts from banks and financial institutions, and a fresh public or rights issue is totally ruled out.

Meanwhile, Greenply Industries is currently expanding its laminates factory, which is located at Behror in Rajasthan, from 2.40 lakh sheets to 3.20 lakh sheets per month.

Cost of the expansion project is Rs 16.5 crore and it has been funded through loans from State Bank of India and Allahabad Bank. The expanded plant will be commissioned by the end of June, this year.

During the last 10 years, Greenply Industries has grown by 1200 per cent. In 2002-03, the company's turnover and net profit was Rs 239 crore and Rs 4 crore, respectively.

In 2003-04, it is expecting to register a turnover of Rs 254 crore and a net profit of Rs 2.52 crore. Out of this, Rs 135 crore would be generated by the laminates business. The rest, Rs 119 crore, would be from the plywood operations.

"In the current financial year, 2004-05, we are hoping to record a turnover of Rs 300 crore. Our net profit will be around Rs 6.5 crore. Exports are likely to increase by 45 per cent to Rs 35 crore," Mr Mittal said.

The company is already exporting laminates to the US, Europe, Singapore, Taiwan and Hong Kong. Greenply Industries is now planning to export its branded laminates to Syria and Vietnam.

Shares of Greenply Industries are listed in the Calcutta Stock Exchange and the BSE. As the promoters hold more than 70 per cent, the counter hardly witness any trading. Mr Mittal said that there are no plans to dilute the holding.

The company is revamping its marketing setup too and would be laying great emphasis on advertising. It has earmarked a budget of Rs 5 crore for advertisement expenses during 2004-05.

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