Century Plyboards expanding across every single segment we are present in: Executive Director, ET RealEstate

September 9, 2023

Keshav Bhajanka, ED, Century Plyboards, says, “we are the first in the world to come up with a branded designer laminate. So the objective has always been not just to do well, but to try and elevate the category. And this is our first step towards doing that with Century Laminates by Manish Malhotra.”

Lus talk about markets. And before that, I want to talk about the ad, which has a tip that Century Plywood is the best tip. How did you strike on that idea, quite innovative actually.
I think that we are always looking to do something a little different. And this just felt correct. It felt like something that went very well with the brand philosophy. Because whenever we speak to you, you say think about the long term.

You are moving into now, designer plywoods, right? I thought it was always a very sensitive market. Now you have got a designer range there.
It is not really a designer plywood, it is a designer laminate. But again, the objective was to do something a little different. And we are not the first in India, we are the first in the world to come up with a branded designer laminate. So the objective has always been not just to do well, but to try and elevate the category. And this is our first step towards doing that with Century Laminates by Manish Malhotra.

I am sure that designer collaboration comes with a hefty price tag as well. Are you seeing premiumisation even when it comes to veneers because that is the trend pretty much across the board?
Yes, whether you look at laminates or veneers, there is a trend towards premiumisation. People are becoming more expressive with their home, especially post Covid. It will definitely lead to premiumisation in decorative products going forward.

When we spoke to you last, you were sounding not very excited about the demand trends. But that is a conversation which happened let us say three-three and a half weeks ago. Post that, now that festival season is nearing, from cautious have you become excited or are you still cautiously optimistic?
I would say I am cautious in the short term. And I am very optimistic in the medium and long term. I would not say the scenario on ground has improved too much. But we have been able to do far better than the market has been. Going forward, whenever you speak to the channel, when you speak to customers, when you speak to architects, there seems to be a function of the interest rate hikes. Once that is established, because now there are no further hikes, and considering the quantum of real estate sales that are taking place, it is a question of when rather than if. And I think when is going to be sooner rather than later.You have already invested about Rs 7.6 billion in the last two years. What kind of capex outlay do you have for the next two to three years?
We have a substantial capex outlay. We are coming up with the largest plant in Andhra Pradesh at a total capex of Rs 900 crore plus; Rs 700 crore towards MDF, and Rs 200 crore plus towards laminates. We are also coming up with the particle board plant in Chennai with a capex of Rs 500 crore plus, and a new plywood unit in Hoshiarpur with Rs 100 crore plus. We are expanding across every single segment we are present in and this is just a start.

The management of Kajaria Ceramics sounded very confident about the tiling demand and his logic was that the real estate built up now will translate into real demand for tiling. I would imagine the same cycle should also be at play for you and in the last two years, we have seen a surge in bookings. How come you are not feeling the advantage of that cycle because the Kajaria management was very clear that the cycle is not very favourable?
I think it could be a difference in the timing of purchase for the customer. If you look at tiles, if you look at the sanitary, if you look at other products, they are normally much earlier than a plywood. A plywood or laminate would be a little later when a customer makes a house into a home. At that point in time, demand for products comes. But when a building is being finished, at that point, the demand for tiles or the demand for faucets and sanitary ware etc. is strong. So I think it is about timing. Maybe our demand would come two to three months later but that is the delta or the difference that could take place. Otherwise, in the medium term, we are fairly confident.

How would you map the competitive landscape for us? You had a huge advantage because the unorganised market became an organised market and that added to your numbers. But now the unorganised guys are also getting efficient and managing their cost well and are coming together as small groups. Is the huge tailwind of unorganised becoming organised still on or has the speed of the tailwind got diluted?
It is highly positive for the industry that the unorganised are trying to become more organised, whether they are successful or not is a different question. And at the same time, you see today, we are the most efficient manufacturers with the highest price sellers. If you look at it, we have economies of scale, we have every single advantage. The advantage that the unorganised had was poorer quality and that is advantage. Now that is getting corrected. We are very bullish that the roadmap for us becomes even stronger.

In the next three years, what is the big announcement I should expect from you?
We are going to do more of the same and we are always working on giving our customers products that they have not been able to experience till date. So, you can expect some more announcements on the product side. And we are fairly confident that we will be able to deliver greater value for customers.

Do you think the second half will be better or significantly better than the first half?
From our previous conversations, I am an optimist. But definitely, the second half is likely to be far better.

How do you think the second half of this year will be comparable to the second half of last year?
Last year, in the first half we had a huge advantage from delayed demand. If you look at last year then Q4 of last to last year was hit because of Omicron and because of Covid still being prevalent. Then last year, the advantage of the spike that we got in H1, has not been felt this year. There was no delayed demand, there was no additional demand caused by previous lack or deficit. This year’s H2 compared to last year’s H2 was a Covid-free time period and this year, hopefully, again, it will be a Covid-free time period and we are expecting very strong growth compared to last year’s H2.

  • Published On Sep 9, 2023 at 09:02 AM IST

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