Golden Laminates in Rs 6 cr growth

Production to be scaled up this month

Chandigarh-based Golden Laminates Ltd, a company that manufactures and exports decorative industrial laminates (sun mica used for decorative purpose), is going to start the production of 10-feet-long sun mica sheets, in great demand in the international market.

The company has undertaken a Rs 6 crore expansion project in its unit at Panchkula near Chandigarh, which would be operational by the end of this month.

The managing director of the company, Satish Gupta, told Business Standard the expansion had been funded through internal accruals and financial assistance from banks.

"The company manufactures 8-feet-long laminated sheets, but considering the high demand for longer sheets in the global market, we have put up this new project," said Gupta. The press plates for the special finish have been imported for this project from Sweden and Italy.

The opening up of the Russian market is a big incentive for this new range of laminates because Europe, including Russia, has good demand for this superior-finish sun mica. The present facility is in an area of 10,000 square feet and the company is thinking over an expansion in Himachal Pradesh in the second phase.

The Gupta family started out in the seventies trading in construction material in a small town of Punjab. Their brand is "Stylam".

Gupta says the export potential is immense. About 80 per cent of their output is sold in the overseas markets and the important export destinations are the Far East, the Middle East, and Europe.

He said of late China was posing stiff competition with "cheaper products of inferior quality". "The Chinese competition is a threat mainly in the low-end markets of the Far East and the Middle East, whereas Europe is a high-end market," remarked Gupta.

The company registered a turnover of Rs 35 crore and exports of Rs 27 crore in 2004-05, and expects to clock in a turnover of Rs 50 crore and exports of Rs 35 crore in 2005-06. The company registered a gross profit of Rs 1.5 crore last year.

According to Gupta, the growth rate of Indian laminates in the global market is far higher than the products of other countries due to its competitive prices. The Indian companies have a low-cost advantage due to cheap labour. Some multinational companies had shown interest in outsourcing production to India, he said.

"Our company is contemplating a tie-up if some multinational comes up with a viable proposition," Gupta added.

He said infrastructure bottlenecks like congestion at ports and erratic and inadequate power supply as major obstacles to Indian companies coming up to international standards. He stressed the need of labour reforms, in which India is lagging behind.

According to him, 80 per cent of the market for laminates is served by the unorganised sector in India, whose products are "below par" while they earn high margins.