Greenpanel Industries’ MDF plant at Rudrapur is expected to resume normal operations from December 16, after a gap of nearly a month. The Plant had been closed since November 11, 2021 due to a delay in import of refiner component from Sweden.
The company has an insurance policy which covers loss of profits beyond 14 days from the date of breakdown but would have to incur Rs. 4 crore on account of fixed overheads.
Meanwhile, Greenpanel is expanding its capacity from 540,000 cubic meters to 660,000 cubic meters which will be available from Q4FY2022. It expects capacity utilisation to be at 90-95% during Q4FY2022 on the expanded capacity. The company expects full capacity utilisation on expanded capacity during H2FY2023. Further, by end of Q4FY2022, it would also chalk out its next phase of expansion plans.
For MDF and plywood manufacturers in general and for Greenpanel in particular there is good news in the form of improving demand for real estate in the main markets. The pan-India residential market has rebounded strongly during Q3CY2021 after Q2CY2021 getting hit by covid second wave. The top seven cities (NCR, MMR, Bengaluru, Pune, Hyderabad, Chennai and Kolkata) saw 98% y-o-y rise and 78% q-o-q rise in new launches in Q3CY2021. Sales saw a robust 113% y-o-y jump (156% q-o-q) during Q3CY2021. Despite the strong sales, the inventory reduced by 8 months q-o-q. The average property prices have risen by 2% q-o-q (up 3% y-o-y) due to an increase in price of construction raw materials. Analysts expect the MDF and Plywood demand to remain strong driven by strong pick-up in launches and sales since Q3CY2020.