Greenply Industries Ltd plans to set up either a veneer or a veneer-cum-plywood unit in Myanmar.
Plans are afoot to float a local subsidiary in Myanmar for setting up the manufacturing unit.
According to Venkatramani, Chief Financial Officer, Greenply, the move would ensure a steady availability of wood from the country. Nearly 35 per cent of the company’s raw material is sourced from countries like Myanmar, Indonesia and Malaysia.
“Myanmar has been discouraging exports of wood and they are likely to ban it starting 2014. They want to export more of value-added products. If this happens, then our raw material sourcing will get affected. So we are setting up this plant to secure our raw material availability,” Venkatramani told Business Line.
Greenply will submit the relevant documents pertaining to its proposed project to the Myanmar Investment Commission by the end of February. It might take about six months for the local regulator to give its approval for the project, he said.
“The detailed project report is yet to be prepared. But, we are not looking at a very big unit there,” he said.
The company is hopeful of firming up a suitable location for setting up a greenfield project in Andhra Pradesh, to scale up the manufacturing capacity of Medium Density Fibreboard (MDF) within the next one month.
At present, it has one unit at Pantnagar in Uttarakhand which manufactures about 600 cubic metres of MDF a day.
Greenply’s brownfield expansion plans for value-added niche products like high-density MDF flooring and high gloss pre-laminated MDF boards at Pantnagar are on track.
“The commercial production is likely to start by the second quarter of financial year 2013-14,” he said.
Riding on the back of higher sales, Greenply Industries Ltd posted 107 per cent rise in net profit at Rs 29 crore for the quarter ended December 31, 2012, compared with Rs 14 crore during same period last year.
Net sales grew by 22 per cent to Rs 509 crore. Shares of Greenply closed at Rs 440.70, up by 2.98 per cent on the BSE on Wednesday.
On a sequential basis, however, profits dipped by about nine per cent from Rs 32 crore during the quarter ended September 30, 2012.