Shirdi Industries to invest Rs 100 cr in Tamil Nadu
Medium density fibre board facility to be set up at Gummidipoondi.
Suresh P. Iyengar
Mumbai, May 30
Shirdi Industries plans to set up a medium-density fibre (MDF), thin MDF and laminated particle board manufacturing facility with an investment of Rs 100 crore at Gummidipoondi, near Chennai.
The company currently has two manufacturing units at Pant Nagar in Uttaranchal and Coimbatore in Tamil Nadu.
Mr Rakesh K. Agarwal, Managing Director, Shirdi Industries, said the company has acquired 13 acres and placed orders for critical machinery which take longer period for delivery.
Promoters, who own 100 per cent in the company, have decided to dilute 27.3 per cent equity through a public issue to fund the new project.
The upcoming unit at Gummidipoondi will have capacity to make 280 cubic metres (CBM) of MDF boards, 100 CBM of thin MDF and 12x6 feet laminated particle board.
The company will also set up a decorative laminate line of 7 million sq mt per annum, besides printing and pre-lamination lines.
The company has also proposed to set up a 10 MW captive power plant.
Focus on South
“The new unit will help us to tap the southern region more efficiently as it contributes about 35 per cent of our total turnover.
Besides, by placing our manufacturing unit closer to the consuming centre, we would save on logistic cost and transition time,” said Mr Agarwal.
Ample availability of good quality wood in Tamil Nadu and bordering Andhra Pradesh has made Gummidipoondi an idle location for the new unit, he added.
Though the cost of wood has moved up substantially in the last few years to Rs 3,000 a tonne, it is comparatively cheaper at Rs 2,000 a tonne in the South due to good supply.
The company also plans to enter commercial plantation as the next stage of expansion.
On power shortage in the industrial belts of Tamil Nadu, Mr Agarwal said “scarcity of power is going to be one of the major issues not only in Tamil Nadu but across the country.
Unlike other states, Tamil Nadu is shade better as it switches of supply on scheduled basis,” he said.
The company plans to shield all its units from vagaries of erratic power supply by setting up captive power plants.
The Pant Nagar unit has recently become self-reliant as far as power is concerned with the new power plant going on stream.
Shirdi Industries will also set up a manufacturing facility at Bhiwandi, near Mumbai to manufacture edge solutions for wood-based furniture products.
The company recently set up a 20,000 sqft at Bhiwandi showroom to display furniture made at its factory.
The expansion comes at a time when the country dependency on imports for MDF and particle board has grown many fold in the last few year, said an industry analyst.
“On an average, India imports about 60,000 to 70,000 CBM a month of MDF and particle boards to meet its burgeoning demand. The country produces about 20,000 CBM per month,” he added. “Our investment in modern infrastructure and ability to achieve optimum capacity utilisation through manufacturing processes contributes to economies of scale,” said Mr Agarwal.
MDF and particle boards (PB), made of refined wood fibres, are cheaper as compared to plywood.
MDF utilises close to 90 per cent of the tree as compared to plywood, which uses only the centre portion of high quality logs leading to about 60 per cent usage of the tree.
MDF and PB can be pre-laminated at factory, whereas plywood requires lamination at site with the help of decorative laminates.
The cost of pre-lamination for MDF board is Rs 10-12 a square feet as against over Rs 30 to 50 a sq ft feet in case of plywood.
Despite various disadvantages, furniture made from plywood currently accounts for about 95 per cent of the industry sales with MDF and PB accounting for the rest.
Plywood is popular amongst the housing industry while MDF has gained approval in the commercial use.