Sarda Plywood Industries Ltd (SPIL) is celebrating its successful 60 years journey in Plywood manufacturing. Its flagship brand DURO is known for offering high quality premium plywood products and has stood among top 5 plywood brands in India. With Rs. 220 Crore annual Turnover, SPIL is currently operating from 2 units with the largest being in Rajkot, Gujarat with a capacity of 24,000 NA per day. The second unit is in Jeypore, Assam with a capacity to do 12,000 NA per day. The company produces range of Plywood, Block Boards, Flush Doors and Decorative Veneers. The company posts 10 % growth rate year on year, having strong market presence in North India. However, in the last few years brand Duro has increased its presence in Maharashtra, Andhra Pradesh, Karnataka, Madhya Pradesh and Odisha.
The company has been maintaining its growth story under able guidance of Mr. Jaydeep Chitlangia (JC), who is very dynamic person in this industry. The Ply Reporter interviewed him on the occasion of successful 60 years journey of SPIL, which is worth read for wood panel industry and trade people.
Q. The memorable moments of success and failures? (How & what did you feel e.g. at the time of Assam closure or fruit of Success like when you came across DURO brand recognition in markets.)
A. (JC) Closure of Assam factory in 1996 was one of the toughest periods for this company and the industry. However, we managed to come out of those times. At that time we did not know what would happen and how things would turn out. But this year we have celebrated our 60th year. That in itself is a huge success.
Q. What are the changes have you observed in last 10 years?
A. (JC) The industry has changed from being a sellers’ market to a buyers’ market. As a result there has been a lot of innovation and improvement in processes. Despite decline in the real estate segment of this country, our Industry has still managed strong growth, which goes to show that the fundamentals of this country and our industry are strong.
Another big change I have seen is that the new generation of dealers, retailers and distributors, are not inclined to join this trade. This is extremely worrying and the root cause for this phenomenon is that the industry continues to be driven by the shadow economy. We hope that with GST and the soon to be implemented E-Way bill will curb this menace.
Q. You are on Key Position at FIPPI and represent ply industry on various government platforms on different occasions, what are the opportunities that you feel is missed and the opportunities that was availed? How shall plywood industry aim to get support from government on the issues of plantation timber, technology & R&D support etc?
A. (JC) This industry does not receive much support from the government as it is treated as a negative industry due to the dependency on wood as a raw material (an incorrect assumption). This is also reflected by the fact that the parent ministry is MOEF and not part of the ministry of commerce.
We are very confident that GST will be a major boost for this industry and especially for the organized sector players. However,m the current GST slab of 28% is hurting this industry. Till such time that is not corrected and E-Way bill is not implemented, the true benefits of GST will not be known.
Q. What made you go for Public listing and the changes you witnessed after that?
A. (JC) We went for public in 1984. It was a very long time and I had just joined business then. I think we are very expanding capacity and we needed capital for the same.
Q. Do you see any opportunity in capacity expansion in next 1-2 years?
A. (AK) Yes. We have very strong growth and expansion plans. Despite its very strong popularity and brand value in North India, there is no manufacturing unit there? Don’t you think, you have missing on a spot where other brands have been better placed?
(AK) Yes, especially for growth in Medium and Low segment we have missed that opportunity. However, with strategic tie-ups we are looking to now bridge that gap.
Q. What impact do you see on Plywood business after GST?
A. (JC) We are very confident that GST will be a major boost for this industry and especially the organized sector players. However, the current GST slab of 28% is hurting for this industry. Till such time that is not corrected and E-Way bill is not implemented, the true benefits of GST will not be known.
Q. Why did not you choose to enter in any overseas factory set up so far, despite other organised players saw big opportunities?
A. (JC) We never felt that to be a long term option for us. Many of these countries are still developing without strong forestry norms and thus have a lot of instability in their policies. We have seen in the past two decades, governments across these countries change their policies overnight and that brings about a lot of uncertainty, as is evident.
Q. Your top 5 regrets &Top 5 positive decisions that made you what you are today?
A. (JC) Everything is positive and there are no regrets.
Q. Brand that you love to consider as an ideal and why?
A. (AK) Apple for the way they market. The best things with Plywood, which will be advantage over other alternate panels? (JC) Its overall strength and durability will be an advantage.
Q. How do you see scenario of timber supply for Plywood Industry in coming future? What are the changes do you observe after Gurjan face shortage (specially for the branded plywood segment)?
A. (AK) In our industry, we are fascinated with “Gurjan”. And the trade assumes that all that is Red is Gurjan. We have to realize that there is a world beyond Gurjan. Gurjan is no longer economically viable and available in the correct quality. It is just a matter of time before we see a change. Those who will move early will certainly have an advantage.
Q. In a recent development, the central government has made some changes in guidelines of MOEF to free the wood panel industry from licensing (except peeling/ large band saw/slicer). What impact do you see in coming years?
A. (JC) It should not really matter. It is always about Demand and Supply. If there is excess capacity, players will exit the market. If there is shortage, people will enter into the market. I really don’t see the above makes any difference other than making it easier to expand / enter into this industry.
Mr. Akhilesh Chitlangia, MD, Sarda Plywood Industries Ltd (SPIL)
A. Mr. Akhilesh Chitlangia, 3rd generation entrepreneur of SPIL, has joined the company in 2010 after completing Bachelor of Arts in Economics from US. He looks after marketing and Sales and has successfully been expanding the Duro brand other states such Andhra Pradesh, Karnataka and Maharashtra. He has brought significant changes in Marketing and product placement in last 7 years and is taking on to every new challenge to turn them into an opportunity. Akhilesh Chitlangia (AK) was present during the interaction with MD and answered those questions.
Our core strength has been in the premium segment of the market and majority of our growth has come from here. We have recently launched Tower brand of Plywood and Block Board for the branded economical segment in a few markets and that is driving our growth as well.
Q. Which are the most successful products/ strategic changes that has brought revenue growth or strengthened the brand value of DURO during last 7 years?
A. (AK) Our core strength has been in the premium segment of the market and majority of our growth has come from here. We have recently launched Tower brand of Plywood and Block Board for the branded economical segment in a few markets and that is driving our growth as well.
Q. How do you see natural decorative veneers growth rate with respect to growing laminate demand?
A. (AK) I think both will grow. Both products have created their own space in the market. The segments in which both products compete on a broader scale is very different.
Q. How do you see the impact of growing market of MDF and WPC? What is your view on “the plywood demand will get negative impact after 6-7 years once acceptance of readymade furniture will spread deeper”?
A. (AK) I don’t think there will be a negative impact on the Plywood industry. The industry may not see the type of high speed growth but there will be a growing demand.
However, to survive and grow, innovation will be required. If we continue giving the same product for years, then we will be caught out. That is why we have invested and successfully marketing
Duro Techply – which is made from 100% European Beech. The product is technically more advanced than regular plywood and gives the user the added advantage of semi decorative plywood.
Q. How do you see the doors industry growth in the area of Decorative doors and high end readymade doors?
A. (AK) Flush Doors is an extremely strong growing segment. For many years, Doors have been thought off as a secondary product, but it’s now going main stream. There are units coming up across India that are only focusing on Flush Door segment. There has also been a lot of Value
Addition in this segment.
Q. Do you see any fund raising possibility when equity market is so bullish on organised wood panel industry?
A. (JC) Yes, but investors are very much variable about this space because of trade practices.
Q. Your view on ‘Ply Reporter role for the panel industry & trade during last 10 years’?
A. (JC) Simple words cannot do justice to the amount of value Ply Reporter adds to the Panel Industry. Ply Reporter is the voice of calm in the ocean of chaos in this Industry.
What makes Ply Reporter very different from other trade magazines is that it speaks the hard truth. The level of detailing and research that is done is quite remarkable. A big kudos to Pragat ji, Rajeev ji, and the entire team of Ply Reporter for always pushing this industry to be better day-by-day.