Greenply expects Rs 800 cr turnover from its JV with Samet by FY26

Leading plywood and laminates maker Greenply expects a turnover of Rs 750-800 crore by FY26 from its equal joint venture (JV) with Turkiye-based furniture hardware firm Samet, a top company official said on Friday.

Greenply expects 8-10 per cent volume growth in its core plywood business and 50-60 per cent in new medium-density fiberboard (MDF) business in the current fiscal, Joint Managing Director and CEO Manoj Tulsian said.

It also plans to set up one more plywood factory that may have an investment of about Rs 125 crore and enter new adjacent products through brand extension of Greenply, he added.

 

The Greenply-Samet JV has already commenced its manufacturing activities and commercial production at its Vadodara-based plant in Gujarat, which will not only cater to the growing domestic market but also explore export opportunities.

"We have planned an investment of close to Rs 250 crore," Tulsian told PTI.

The investment will be done in phases and only the first phase has been completed on March 30, 2024.

"We have a plan for phases two and three, coming up in 2025 and 2026," he said, adding, "So there is a ramp-up plan and we believe that in the next 4-5 years, we should be able to have around Rs 400-500 crore of turnover into this business."

This 50:50 JV will manufacture and market premium furniture hardware, including slide systems for wooden and metallic drawer systems, hinge systems, lift-up systems, and other products.

The JV will initially leverage the strength of existing sales and distribution channels of Greenply for the domestic market.

The segment is mostly dominated by Chinese players and Tulsian expects with its domestic manufacturing that the JV "will be very competitive".

Asked about the export potentials, he said Samet has a presence in 80 countries and it would be their call to import from the Indian JV for their respective market, depending on the cost of production here and in that country.

"It will totally depend on the cost matrix... they will look at their cost of production versus the cost of production that we would be incurring here," he said, adding, "if it is beneficial for them, they will start exporting to many countries from the Indian JV."

The Kolkata-based company reported a revenue of Rs 1,767.03 crore for the financial year ended March 31, 2024.

About the growth of Greenply, Tulsian said in the last four years, except the pandemic period, the company has grown at a compound annual growth rate (CAGR) of 20-23 per cent, helped by incremental sales from medium-density fiberboard (MDF). The company is also growing in its core business of plywood, he said.

"So, our overall target is that, as a company, to continue to grow at 15 per cent. I think now the time has come for Greenply to use the strength of the brand in terms of extending the portfolio, which we call a brand extension," he said.

Greenply will keep looking at new product lines, he said.

".... looking at the balance sheet and the capital allocation ratio, decisions will be taken in terms of where to invest or where initially to use the outsourced method of extending the product portfolio, and then when it starts making sense to invest into those line of business, also into the country," Tulsian said.

Asked about Greenply's expected growth in the current fiscal year, he said, "This year, we have already given some targets to our investor community. In the plywood segment, we are looking at a growth of 8-10 per cent in terms of volume growth and for the MDF business, we are looking around a 50 per cent-plus growth.