This acquisition will reinforce Greenlam to be at India's leading position in the laminate industry with the overall capacity of 24.521 million sheets.
Greenlam Industries acquired Bloom Dekor, a laminate manufacturing facility of Gujarat. This laminate manufacturing facility has an installed capacity of 3.4 million sheets per annum. The deal comprises acquisition of entire land, building, plant, and machinery of laminate division of Bloom Dekor. The total consideration to be paid for the deal is Rs 36 crore and the company expects to operationalize the plant by Q2 FY23.With this acquisition, Greenlam will now have four strategically located laminate manufacturing facilities in India, situated at Behror (Rajasthan), Nalagarh (Himachal Pradesh), Naidupeta (Andhra Pradesh - Under Construction) and now Prantij (Gujarat).
This acquisition will open new horizons for Greenlam to expand its offerings to the market by entering mass market segment of laminates. It will also allow expansion of network in semi-urban and rural areas and give leverage to its current offerings. The location of this plant offers a demographic advantage as Gujarat is a hub for the raw materials and being closer to port cuts down on logistics cost and time.
This segment will have fewer stock keeping units (SKU), which shall result in lower working capital requirements albeit at similar return on capital employed as for the existing business.
Greenlam will further be upgrading the plant and expanding its capacity. This upgradation will take the current plant production from 3.4 million laminate sheets to 5.4 million sheets annually.
Saurabh Mittal, managing director & CEO of Greenlam Industries said, "With the acquisition of Bloom Dekor's manufacturing facility, we will further strengthen our market leadership in laminates and penetrate into the mass market segment which forms a significant share of the overall category. In addition to this, we also announced issuance of fresh equity shares on preferential basis to the extent of Rs 195 crore, on June 20, 2022. With the earlier announcement of capex to invest Rs 950 crore over a period of 2-3 years, towards setting up of third laminate plant and entry into plywood and particle board business along with fund raise and this acquisition, Greenlam is well poised to embark on the journey to the Next Orbit."
Greenlam Industries provides high-quality surface solutions that are designed to transform and beautify residential and commercial spaces. Its brands include Decowood, Mikasa, NewMika, Greenlam Clads, Greenlam Sturdo and Greenlam.
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On a consolidated basis, net profit of Greenlam Industries fell 17.4% to Rs 25.56 crore despite of a 11.6% rise in net sales to Rs 463.39 crore in Q4 FY22 over Q4 FY21.
Shares of Greenlam Industries closed 2.29% higher to end at Rs 319.40 on the BSE.
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