CenturyPly enters into joint venture with Chinese company Goldea
CenturyPly has entered into a tie-up with a Chinese laminated door manufacturing company, Goldea, for making flush and panel doors.
According to Sajjan Bhajanka, Chairman, CenturyPly, the joint venture company Century Goldea Ltd will be incorporated after receiving the requisite approvals from the Registrar of Companies. CenturyPly will hold 60 per cent stake in the joint venture, while Goldea will hold the rest. The total investment in the first phase will be to the tune of ₹80 crore.
“The commercial production on the first phase of the project, where we will produce around 2,000 doors a day, is likely to begin by September 2018,” said Bhajanka here on Friday. The capacity is likely to triple to nearly 6,000 doors a day in the second phase of the project.
The company has already put up a 198,000 cubic metre medium-density fibreboard (MDF) facility at Hoshiarpur in Punjab, at an estimated investment of ₹400 crore. MDF will be used as the raw material for manufacturing the doors, he said, adding that the company is in the process of acquiring some more land near its MDF plant for setting up the new door plant.
“We will require about 10 acres of land for this plant, we are on the lookout,” he said. The company will target the affordable-housing segment for its flush and panel doors. With an estimated requirement for five crore houses by 2022, there is likely to be a robust demand for such doors, which will be “reasonably priced”, he added.
The investment in this joint venture will be a part of the company’s bigger plan to foray into the manufacturing of MDF-based value-added products such as laminated MDFs, flooring and decorative veneer. The estimated investment on creating capacity for value-added products would be close to Rs. 200 crore, he said.
“We are looking at forward integration by manufacturing value-added products such as laminated MDFs, flooring and doors, among others. All these products are likely to be on stream in the next 12 months,” said Bhajanka.
The implementation of GST would help shore up the share of the organised sector in the Rs. 20,000-crore plywood market. The share of organised players, which currently account for just about 25 per cent, will move up to close to 50 per cent in the next two years, he observed. Bhajanka, however, said the industry is hoping the GST Council would consider its demand for bringing down GST on plywood to 18 per cent from the current 28 per cent rate.