As plywood manufacturer Greenply comes up with a new segment Greenpanel, V Venkatramani, its Chief Financial Officer (CFO) talks to BusinessLine on the company’s expansion plans, reason for introducing a new vertical and coming up with new business strategies. Excerpts from the interview:

What was the reason for the fall in your profit last quarter as compared with the same period of previous year?

The company had suffered currency losses of about ₹6.5 crore due to long-term borrowings for a new plant that has been set up in Andhra Pradesh. This impacted our results for the quarter. So, the primary loss was on account of this.

Also, since the company did not take part in the price wars, it took a hit on volumes which fell by 30 per cent in the Medium Density Fibreboard (MDF) segment and impacted total revenue.

Why did you come out with Greenpanel when you already had something similar in Greenply?

The company is currently reorganising the business. We are splitting the business into two parts. So the majority of the plywood business (around 70 per cent) will remain with Greenply. On the other hand, MDF business and Uttarakhand factory (which has both MDF and plywood) will move into a new company called Greenpanel.

We wanted to have an umbrella brand for maximum benefits from the single brand and that would also help us to get long-term benefits by spending less rather having different brands for different products.

What will be your focus areas for the current financial year?

We have taken steps to reduce costs and reduce wastage at the factory level. Hence, the company has introduced processes to reduce the chemical resin costs. For Greenpanel, MDF will be the key business going forward and chemical resin and wood are the primary raw materials for MDF.

What steps are being taken to increase the revenue in the current financial year?

The company is now deepening the network. Earlier, we had only one MDF plant in Uttarakhand so our interest was to sell most of the products in northern India. This helped us to reduce the freight cost and maximise margins. Now, since we have a new plant down south, we plan to expand our base in the southern as well as the western region.

We are also looking for ways to increase our exports — to 30 per cent of the total volumes in MDF from the current 10 per cent — in the next six months.

Can you elaborate on your expansion plans?

In Greenply, we are working on increasing the capacity of face veneer (which is manufactured in Gabon, West Africa) from 18,000 to 50,000 cubic metres.

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