In this intense 28-minute conversation, Century Plyboards executive director Keshav Bhajanka shares with me his views about the impact of the unfolding government policies for furniture. We also talk about how Century is preparing for a revitalised furniture industry, with its massive capex and smart marketing moves. The company is the largest and most diversified manufacturer of plywood and other panel products in India.
Keshav Bhajanka has been watching the dynamics of the furniture industry from the frontlines, by virtue of being the largest supplier of wood-based materials in the country, and also being part of the policy formulation process.
During July-August this year, the Department of Promotion of Industry and Internal Trade (DPIIT) released quality control orders (QCOs) that make BIS certification compulsory for resin-treated compressed wood laminates, wood-based boards, and plywood and wooden flush door shutters. A draft QCO, which was floated in August 2022 for certain categories of furniture, is awaiting finalisation pending consultations.
“The QCOs were much awaited. We have been part of the discussions and the setting of relevant standards. This is a very very good step taken in the right direction for curtailing sub-standard products. Going forward these steps are going to benefit the organised sector,” he says.
Bhajanka is categorical that the furniture industry can look forward to a long period of rising demand, in view of the growing prosperity in the country. “After food and clothing, housing is the next necessity. And government policy, coupled with rising disposable incomes, is ensuring that there will be sustained demand for all forms of housing and home improvement in the foreseeable future.”
A revised forestry policy under consideration, which could take steps to encourage agroforestry, is equally important for the industry’s growth, Bhajanka asserts. “Rising timber demand would encourage the commercial growing of more trees. Backed by such an approach, the revitalised furniture sector would facilitate an increase in the green cover of the country, which would eventually safeguard the environment.”
The increased pace of new furniture OEMs coming up across the country is a sign of how the industry is shaping up, he adds. The scale of operations is also changing. “For instance, earlier MDF plants in India had a capacity of 150 cbm, but now the smallest unit starts at 800 cbm. The scale of operations is changing, as we have to be competitive vis a vis China and Vietnam. I am sure this will start happening in furniture as well.”
While confirming that Century is fully compliant with the new quality norms, Bhajanka says that the company is in the process of investing heavily in capacity and category expansion. “We will be investing close to Rs 2,000 crore over the next three years. This is more than 2x of what we have invested in the entire 35-year history of our company.”
Century is setting up several greenfield facilities simultaneously. A composite facility is coming up for MDF, PVC boards and laminates in Andhra Pradesh. A new plant is coming up in Hoshiarpur, Punjab for laminates, and another in Chennai, Tamil Nadu for particle board. The major portion of the capex investment is allocated to MDF (Rs 775 crore) and particle board (Rs 550 crore).
We also discuss how Century is showing the way in premiumisation with the launch of its Manish Malhotra range of designer laminates. “This initiative reflects our ethos concerning our customers. We want them to be able to bring good design home and enhance their lifestyles. Manish Malhotra is among the most respected fashion designers in the country. His range of designs will now be available on laminates that will adorn the interiors of consumers. With this collaboration, we are helping our customers fulfil their aspirations. Our motto is mass premiumisation.”
Kitchens, wardrobes and other forms of cabinetry are the most significant constituents of the home furniture market, according to a recent IKEA report. Bhajanka says that this market reality is reflected in Century’s revenues. “The category expansion into MDF and particle board is our response to a growing market that requires materials at various price points. Our diversified portfolio gives us the ability to supply a particular design of laminate on all types of prelaminated panels. And it gives the OEMs the ability to woo their customers, besides making their logistics and inventory management more efficient.”
However, Bhajanka admits that the industry would grow sub-optimally unless it addresses the challenge of skilled manpower availability. “We must treat this as an industry issue and not an individual issue. The entire industry must come together, to not only create avenues for skilling but also make the woodworking profession more aspirational. At Century we have been at the forefront of all initiatives that are being taken by the industry, be they through formal training, recognition of prior learning (RPL) programs, apprenticeships, or other forms of institutional support.”
ALSO READ: Formica is Making a Comeback in India
Century Plyboards clocked revenues of Rs 3,484 crore in its wood-related business during 2022-23, achieving a growth of 21 per cent over the previous year. The mainstay plywood business grew 27 per cent, while the laminates, MDF and particle board categories grew 14 per cent. Plywood accounts for 58 per cent of the company’s wood-related revenues.