After a wait of more than a year, Century Plyboard has now decided to go for a Brownfield expansion of its Hoshiarpur MDF manufacturing facility instead of setting up a Greenfield project in Uttar Pradesh.
Earlier the company was planning to invest Rs 400-500 crore in Uttar Pradesh in Greenfield MDF (600 CBM per day) and particle board (900 CBM per day) manufacturing units. The company expected certain benefits in setting up units in UP like a tax holiday by the state government and low transportation cost in the region. In addition to this, there is huge market available in the state. Though the state government had given go ahead for the project, the green bench had later on quashed all recently issued licences by the UP government for wood-based industries.
As a result, the company decided to revert back to its original plan of Brownfield expansion of Hoshiarpur unit. CenturyPly’s board of directors has approved proposal for expansion of the MDF Board unit in Hoshiarpur, Punjab. The total time needed to set up the plant would be less than 12 months and the estimated capex is Rs 200 crore. The existing operating capacity of the plant is 600 cbm per day, which is expected to be increased to 1000 cbm per day. However, margin for the newer capacities is likely to be 3% lower than current levels due to higher raw material costs.
Apart from this, the company is also evaluating south based locations for greenfield MDF project which is likely to have 700+ cbm per day capacity, and would be requiring 18 months for commencement of commercial operations from the date of finalisation the site.