Leading plywood manufacturer Century Plyboards (India) Ltd has tied up with Chinese company Goldea to form a joint venture (JV) for manufacturing doors at Hoshiarpur in Punjab, a company official said on Friday.
“We have made some arrangements with a Chinese company, Goldea, to form a joint venture to manufacture MDF door. Our share will be 60 per cent while the Chinese company will hold 40 per cent in the JV – Century Goldea Ltd. Under this arrangement, we plan to put up a plant at Hoshiarpur in Punjab,” company’s Chairman Sajjan Bhajanka told reporters here.
The city-headquartered company has already put medium-density fibreboard (MDF) facility in Hoshiarpur with an investments of Rs 400 crore. The MDF would be used as the raw materials for the manufacturing of the doors, he said, adding that the company is in the process of acquiring some more land nearby its MDF plant for setting up the new door plant.
According to him, the JV will be investing Rs 80 crore in the first phase of the project.
The MDF plant, with a capacity of 1,98,000 cubic metre, has started the trial production and the commercial production is expected to begin soon.
“There are planning for forward integration in the plant by manufacturing value added products such as laminated MDFs, flooring and doors in the next one year. The investment for the forward integration would be around Rs 200 crore,” Bhajanka said.
With the implementation of Goods and Services Tax, the company is expecting the share of organised sector in the Rs 20,000-crore plywood market would be close to 50 per cent in the next two years from the current share of just 25 per cent.
Bhajanka, however, said plywood falls in the 28 per cent rate category in the new indirect tax system which is quite high and the industry is hoping that it could be brought down to 18 per cent in the next GST council meet.