How Centuryply became a game changer
Century Plyboards India Limited (CPIL), the Kolkata-based plywood major, one of the top two plywood manufacturers in India, has carefully built strong diverse portfolios over the years, which includes the emergent MDF (medium density fireboard) business. Foresight and right business decision in plywood and allied products, coupled with its vast experience in interior and infrastructure products, have paid the company good dividends.
“CPIL is the leader in India’s wood panel industry,” says Sanjay Agarwal, co-founder & managing director. “So, it is natural and compulsory for us to be there in every product segment. Today, we offer complete solutions – be it plywood, particleboard, veneers, laminates, doors, fibre cement board, PVC or MDF.” However, plywood constitutes close to 60 per cent of the company’s total revenue. Innovation, adaptation of advanced technologies to improve quality and operational efficiency are the key issues to stay ahead, adds Agarwal.
A publicly traded company, CPIL achieved revenues of Rs3,758 crore in 2023-24. The company’s workforce of over 12,000, spanning R&D, manufacturing, branding, marketing, data sciences, finance and other key areas, have played a crucial role in keeping it relevant across market cycles.
CPIL was set up in 1986 by Sajjan Bhajanka and Sanjay Agarwal, both tracing their roots back to Tinsukia in Assam. The company started with manufacturing panel doors. This was the time when the government reduced the custom duty of imported veneer and timber from 200 per cent to 10 per cent, but retained 200 per cent duty on plywood. The duo found it was a great business opportunity and started manufacturing plywood from imported veneer. The blanket ban order on tree-felling by the Supreme Court in 1996 was a major setback for the industry. But CPIL raised its capacity and became a winner in the segment, with the duo putting their vast knowledge of the segment to good use.
Milestones galore
The company has achieved several milestones. As a pioneer in borer-proof plywood and boiling water resistant (BWR) decorative veneers and laminates to specially treated fire-retardant plywood, the company has created a niche in the highly competitive lifestyle segment. CPIL has changed the rule of the game through its innovation and has forced its competitors to change with time. The company ensured flexibility to customers’ needs and offering them maximum choice to fulfil their desire.
Bhajanka and Agarwal have allowed the next generation to take charge of the company’s day-to day operations and use their vast knowledge for the company’s macro-level management. Bhajanka’s son Keshav, a finance graduate, is responsible for new businesses, such as MDF, exteriors & flooring and supply chain, while Agarwal’s daughter Nikita Bansal, an economics graduate, manages the company’s sub brands Sainik and Century doors, while also heading the procurement and digital marketing strategies. Both are executive directors and successfully steering CPIL’s growth.
Today, CPIL is the unprecedented choice of architects and interior designers and enjoys a unique brand identity as the market leader, with offerings that are considered industry benchmarks. Its philosophy includes adding more value-for-money products and, at the same time, improving the existing product portfolio through extensive research and customer feedback.
The wood panel industry has witnessed a transformation in India since the late 1970s, when solid wood was ruling the furniture market. Gradually, solid wood was replaced by plywood, which is the most versatile and economical and adopted by the mass market. Subsequently, large, organised wood panel manufacturers have increased their portfolio in allied products to offer holistic solutions in terms of durability, aesthetics and affordability for homes, offices and commercial spaces. The entry of MDF has revolutionised the modern furniture market. However, close to 60 per cent of the population still consume plywood due to its inherent strength.
The use of MDF is gaining traction as India is slowly shifting towards readymade furniture, due to rising disposable income, rapid urbanisation and replacement demand. The culture of ready-to-move-in offices, retail outlets with low-cost modular furniture and interior decoration is also gaining popularity. The solid wood and plywood have been slowly falling out of favour, because of cost and long time-line in fit-and-finishes, compared to MDF.
People’s favourite
MDF is an engineered wood product, formed by breaking down hardwood or softwood into wood fibres, often in a defibrator, combining it with wax and a resin binder and then forming panels by applying high temperature and pressure. MDF is versatile and has many unique features, which have helped it become the preferred choice amongst people, who are using it compared to the other wood boards like chipboards, layer boards, hard fibre boards, etc. The range of applications of MDF is increasing because
of its qualities/characteristics and ease of working. It is eco-friendly, as it
is made from plantation wood. MDF is homogeneous in nature; hence, it is easier to carve. It has a smooth surface, with uniform density and is convenient to use.
To grow with the market, CPIL had set up its first MDF plant in Hosiarpur in Punjab in 2017, with an annual capacity to produce 200,000 cu m of material, managed by a workforce of 600. The top-end MDF quality of the plant helped the company become a runaway success as a new entrant. Subsequently, it ramped up production further, as the demand in MDF accelerated owing to purchase of factory manufactured furniture on e-commerce platforms. For fabrication of custom-made furniture at homes and apartments, online furniture shopping is preferred, which offers speed, convenience and the option of returns. To address the growing demand, the company had commissioned its second greenfield MDF facility at Badvel in Andhra Pradesh last year, which has a capacity of 313,500 cu m. This nearly doubled the overall MDF capacity of the company to 627,000 cu m.
“The brand Century is the strongest that the industry has ever seen,” says Keshav, who was instrumental in setting up the MDF business of the CPIL. “So, people have confidence in our quality and our ability to service those products the best way across the segment. The expansion in MDF was facilitated by Centuryply’s proactive approach in addressing demand, capitalising on brand recognition and established quality”.
The company has invested Rs700 crore for this new highly modern MDF plant in Andhra Pradesh, spread across 100 acres, and uses German technology. “This is the most technologically advanced line, with the lowest cost of production. Our biggest USP would be the production of an entire range – from 1.3mm to 40mm thickness – of MDF, as well as pre-laminated MDF in the same line, involving minimum time for shifting,” claims Keshav. The MDF growth has been 30-40 per cent quarter on quarter, he adds.
The company sources renewable agro-forest eucalyptus timber from within 250 km radius of the plant from farmers. Eucalyptus trees are grown in agro forests. “The company has also taken up plantation drives by distributing saplings at subsidised rates to farmers, resulting in increasing area of agro forestry. Farmers bring their produce directly to the plant,” says Rama Ganapathy, plant head, CPIL.
“The quantum of agro forestry grown in India is phenomenal, which has helped the environment, livelihood, as well as industry,” says Agarwal. For MDF production, plantation timber can be used after three years only. It is now a lucrative cash crop for the farmers, fetching good returns, clarifies Agarwal.
The Badvel plant caters to the entire south Indian market – Tamil Nadu, Kerala, Andhra Pradesh, Karnataka and Telangana, as also Maharashtra, Madhya Pradesh and Assam. MDF’s market in India is touching Rs6,000 crore and growing by 15-20 per cent. CPIL is the third largest player, after Action TESA and Green Panel. In the next one year, Keshav is confident of CPIL becoming the number one player in the industry.
Full range of products
Centuryply is synonymous with plywood, though the company has extended its presence across a full range of products too during the last two decades. Plywood still continues to dominate in the industry and forms 57 per cent of the company’s revenue. The company has pan India manufacturing facilities that include six plywood units, two laminate units, two MDF units and one unit of particle board. These plants are located in Joka (West Bengal), Guwahati (Assam), Kandla (Gujarat), Chennai (Tamil Nadu), Karnal (Haryana), Hoshiarpur (Punjab), Roorkee (Uttarakhand) and Bavel (Andhra Pradesh), while the overseas unit in Gabon is managed by a subsidiary company. CPIL possesses a strong distribution network of 3,924 trade partners across 28 states and seven Union Territories.
CPIL has an 8 per cent market share in plywood segment, with a 6.6 per cent growth It has an installed capacity of 399,600 cu m per annum. The guesstimated size of total of the wood panel market in India is close to Rs50,000 crore, of which the plywood segment is of about Rs25,000 crore. However, only about 20 per cent of the manufacturing of plywood is with organised players.
The company offers a versatile range of plywood sheets, be it for a residential or a commercial project. The manufacturing of products is controlled through research, backed by technology, offering a blend of strength and aesthetics.
Centuryply provides product solutions for every pocket – from Sainik plywood at the most price-sensitive end to Club Prime at the highest level, available in more than 21,000 SKUs. Sainik is the success story in the economy segment. “Sainik 710 has revolutionised the plywood industry with its ‘One India, One Price’ initiative, being the first to introduce MRP across the country, because of its extensive reach. This has ensured consistent pricing, protected dealer margins and built trust with customers,” says Nikita.
The company has invested heavily in brand-building, through strategic advertising. It now enjoys leadership position in the economy segment, controlling almost 15 per cent of the market in the Rs90-120 price category, growing 4x. The company is developing special products for the OEM segment, Nikita adds.
CPIL is the third largest producer of laminates, with a capacity of over 9.6 million sheets per annum after commissioning (2 million pieces) the latest plant at Badvel in Andhra Pradesh at an investment of Rs220 crore. In Bengal, the company has the largest single-unit facility in the country, with eight presses, having a capacity to produce 8.77 million sheets per annum. It uses a unique technology, in which special resins impact extra strength to its laminate sheet, making it highly resistant to scratch and abrasion. The company’s exotic range of decorative laminates is characterised by higher colour fastness; it is also carpenter-friendly.
The company has not seen any significant growth, compared to last year in laminates. “Previously, we didn’t have the capacity to keep up, which limited our growth. Now, we expect to see movement with the new plant at Badvel,” says Shripal Jain, president, laminates, CPIL. The new laminate plant’s layout will allow the company to effect further expansion. It has plans for additional lines too, when volumes grow.
“The decorative laminate should be considered as fashion industry but, in India, it is sold as commodity. But the concept is expected to change,” points out Dilip Sinha, plant head, CPIL. The company on-boarded celebrity designer Manish Malhotra and launched a designer product called ‘Century Laminates by Manish Malhotra’. This launch was in line with the need to match evolving consumer tastes, enhance product ‘vibe’ and deliver a superior performance.
Today, India has three large players in the laminate business – Greenlam Industries, Merino and Century. Greenlam is the market leader, followed by Merino, which was the first mover in this segment. Century is the third largest, with an estimated market share of 8 per cent of the Rs7,000 crore laminate market.
Saraswati Ply in South Kolkata has been associated with Centuryply since 2006 and is a prime dealer of the company. “Centuryply is the leader in the country with strong brand recall in the market,” says Dilip Kumar Agarwal, who owns the dealership with his brother. “The company has ability to introduce new products for all segments of customers. It is an ethical and transparent company. Dealers have direct access to management if any issue is not resolved within 24 hours.” However, Agarwal feels the company should emphasise more on the interior and architect level.
Strong balance sheet
Despite substantial capex investments in the last 3-4 years, the company remained largely unleveraged. “We have one of the strongest balance sheets, with a debt/equity ratio of just 0.31,” says Vinay Ganeriwal, general manager, finance, CPIL. Pointing to CPIL’s road map to achieve Rs12,000 crore in the next 6-7 years, Ganeriwal adds: “The optimism is also derived from the fact that India’s wood panel capacity could be half of what China’s capacity is today and that would still translate into a ten-fold growth and a 25 per cent CAGR for the sector, making it one of the fastest growing not only within the interior infrastructure space but across all sectors in India. Also, the company’s investment in the new plant will start adding to the topline in full-fledged from 2025-26. So, the company will be able to achieve the target of Rs12,000 crore by 2031.” Overall, the company is growing well and has delivered the highest ever topline in the recent quarter.
CPIL has reported revenues of Rs3,758.57 crore in March 2024, as against Rs3,539.66 crore in March 2023. It has achieved a net profit of Rs314.73 crore in March 2024, as against Rs348.86 crore in March 2023. Its market cap is over Rs18,666 crore. CPIL’s current stock price is hovering at Rs835-855 on NSE.
“A quality player, Centuryply is our competitor in MDF. It is a good company, which has maintained an impressive growth and has always adopted good strategy for the growth,” says S.P. Mittal, chairman, Green Panel Industries, and also a veteran in wood panel industry.
“Century Plyboards’ diverse product portfolio caters to a wide customer base, supported by a robust distribution network, innovation and strong financial growth solidifying its position,” says Pankaj Singhania, founder, Lakewater Advisors, who has been tracking the company. “Opportunities include tapping international markets and benefiting from policies like ‘Make in India’. Yet, threats from intense competition, regulatory changes and economic slowdowns persist. Strengthening financial stability and leveraging growth opportunities will be key to sustaining leadership.
CPIL’s container freight services (CFS) represent modern day infrastructure, invested with capital and modern IT systems. It is poised to transform into logistics parks, as it is anticipated to gain momentum from increased maritime trade, catalysed by trade pacts, e-commerce, digitalisation in container shipping and demand for specialised containers.
The company has transferred its container freight station business to its wholly-owned subsidiary, Century Infra Limited. This decision aims to boost concentration and effectiveness for Centuryply and Century Infra. The subsidiary will empower the company to concentrate on primary operations, while empowering Century Infra to attract investment. As a dedicated CFS player, Century Infra can leverage its specialised expertise to enhance operational efficiency, improve service and explore innovative solutions. Century Infra is poised to attract investment from domestic and international sources, transforming it into a comprehensive port operation capable of serving as a key hub for national and international trade.
Agarwal believes that, while MDF and particle board are the future for the industry, there will be always a market for plywood, though the usage pattern will change. “Today, the usage of MDF in handicraft is almost 60 per cent, because it is cheap and gives better finish than plywood,” he points out. “Similarly, in some areas, plywood is a better option, because of its inherent strength which will last long.” There is an opinion that MDF may eat out the shares of unorganised players in plywood in future, because it is cheaper.
As more and more affordable houses come into play, MDF and the particle board will find acceptance and grow fast. Keshav is bullish on growth. “CPIL will continue to explore new avenues, as we have no frozen capex,” he says. “The potential of our industry is unlimited. Hence, as a group, we have decided that we have to do everything possible to ensure sustainability, wherever we operate.” The company is looking at setting up a unit for plywood either in Hosiarpur in Punjab or Sitapur in UP or in Odisha. It is expected to commission the plant in the next one year.
CPIL has established markets, as also new markets, new businesses and immense scope to leverage. With all these favourable factors, the company is expected to retain its dominance in the field in the years to come.