Greenply Industries Ltd, one of the largest plywood makers, is likely to announce a price hike in April to offset the rise in input costs. The company had earlier this month had revised its product prices by three per cent .

According to Manoj Tulsian, Joint Managing Director and CEO, Greenply Industries, the ongoing geo-political tensions had led to volatility in raw material costs. The price of timber and certain chemicals have already increased by nearly 15 per cent over the last 10-12 months and the current conflict has further affected the supplies.

“It is a volatile situation. There is a cost side pressure, we took a price hike of around three per cent in March and we will again evaluate the situation in April. If raw material prices do not come down then we may have to go in for another round of price hike,” Tulsian told BusinessLine.

To maintain a margin, the company passed on a large portion of the input cost increase to its customers over the last 10-12 months.

“Though there is a time lag between the increase in input cost and the resultant price hike, overall we have been able to maintain our margins. Our margin was close to 9 per cent last year, and this year we expect it to be around 10 per cent,” he said.

Enhancing production

Greenply has earmarked ₹200 crore to scale up plywood and allied products production in Uttar Pradesh. The company is setting up its own manufacturing facility in Hardoi in UP at an estimated investment of ₹110 crore. It also planning an additional ₹80 crore investment on a joint venture basis across three units (one in Hapur and two in Bareilly). The combined annual capacities of these units would be 31 million square meter.

Of these, two are already operational, and the one in Hardoi would commence production by Q1FY23 and the other at Hapur by Q3 of the next fiscal.

MDF boards biz

The company is also investing around ₹550 crore for foray into the medium density fibre (MDF) boards business. The greenfield manufacturing plant, with a capacity of 800 CBM per day, will come-up at Vadodara in Gujarat and is likely to be operational by the Q4 of FY23.

The company is hopeful of earning additional revenue of around Rs₹600 crore once all these units commence production.

Association with sports

Greenply has associated with the first-ever team from Uttar Pradesh in the T20 tournament, namely Lucknow Super Giants as associate partner of the franchise. UP being the second-largest plywood market by value, the association will help the company enhance its brand and business presence across the state and nationally, he said.