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The Rs 1,600-crore Greenply Industries Ltd plans to double the manufacturing capacity of medium density fibreboard (MDF) to 1,200 cubic metres a day. The company currently has one unit in Pantnagar, Uttarakhand, which manufactures about 600 cubic metres of MDF a day, said Venkatramani, chief financial officer, Greenply.
“Our Board has approved the setting up of a new plant in Andhra Pradesh. We are looking at adding another 600 cubic metres a day capacity through greenfield expansion project in Andhra Pradesh at an estimated investment of close to Rs 350 crore,” Venkatramani told Business Line .
Prospective partner
The company would look at both internal accruals and debt for mobilising funds for the project. The total land requirement is pegged at about 60-100 acres. “We will start with the process of land acquisition once we firm up our project details,” he said.
Greenply is in talks with 2-3 German firms for supply of machinery for its proposed plant in Andhra Pradesh. The company is hopeful of firming up its partner in the next three-to-four months.
“German machinery is more advanced compared to Chinese equivalents. The operational efficiency and capacity utilisation is also much better in case of German machinery. We hope to firm up our vendor by February or March 2013,” he said.
Value-added products
The company plans to manufacture value-added products at its existing MDF unit at Pantnagar.
“We are looking at manufacturing value-added products in the existing unit by way of introduction of high density and high gloss MDF laminated boards and flooring,” he said.
The doubling of MDF manufacturing capacity coupled with the introduction of value added products would help the company improve its margins.
Operating margins, which stood at 22.68 per cent during the July-September quarter, would improve by about 150 basis points in the next 4-6 quarters.
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