Mr. Ajay Agarwal, Managing Director, is leading ACTION TESA, one of the forerunner brands in the country, a pioneer in many ways. Action TESA launched the first thin MDF/ HDF plant in the country as well as the most massive Particle Board Plant. The company is known to be the pioneer of manufacturing true HDF based Laminate Wooden Flooring. Born in 1970, Action Group has emerged as a multi-dimensional company with a strong presence in diverse sectors. The group of companies anticipated long ago the lucrative future market demand for MDF/HDHMR & Particle Board and related products. Hence, they created Action TESA as the brand name to cater Pre-laminated Particle Board, MDF, & HDHMR, HDF Laminate Wooden Flooring, Embossed HDF, UV Coated Panel, Acrylic Hi-Gloss Boards, HDHMR Doors. Excerpts from his interview with The Ply Reporter.
Q- Why is the MDF thicknesses decreasing day by day.Is it an ethical practice or people are taking undue advantage of the situation?
A- To be honest, in a way it’s unfair. For example, you are required to use 2.3mm thickness and you apply 2.1mm instead as a cheaper option. But on the other hand, we are making one or two more thicknesses available in the market.
This is causing a lot of chaos in the market and I am afraid the industry will face a lot of trouble in the times of come.
Q- What is the current capacity vs utilization at Action Tesa MDF and Particle Board amidst struggling markets?
A- We increased our Particle Board capacity from 280 cubic meter to around 340 cbm, and presently using 100% of our capacity. We are in the process of upgrade at particle board plant that will further increase capacity to around 400 cbm or so. MDF market is currently tough due to lot of expansions and competition from lower priced options. At the moment, our total capacity utilization for all 3 products is around 70 percent. I believe, it will likely take us about a year or so to have complete utilization at MDF. We are growing at around 25%, with growth in MDF, HDHMR, Flooring, UV panels and other value added products.
Q-You are the one of the oldest and strongest player in particles board and MDF domain? Where does Action Tesa stand in this whole market of particle board and MDF?
A- Yes, I think we have around 20% market share when it comes to MDF in India. We are selling about 1000 cubic meter and total sales in the country is said to be around 4000 cbm, depending on imports, when it comes to MDF. In Particle board its in single digit as lot of fragmentation has happened.
Q- What kind of other shifts/ changes do you see in the market today?
A- I would say that plywood is stagnant or not growing and to a larger extent, Plywood market has been taken by HDHMR. We were the first one who lauched it and it was hit in the market in such a way that people would now ask if they have to buy a cheaper HDHMR.They would say “Action wala HDHMR chahiye, we have become synonyms with our many products”. At Action Tesa, we will continue to create changes and push things towards quality products and organised working.
I believe the MDF market is growing at 22-25% and that is why our capacity is getting absorbed. As per data around and in your magazine, the Indian Plywood market is pegged at around 40000cr and the MDF market currently is around 3500cr so I do see a lot of scope here.
Q- So are you saying HDHMR has dented the market in a way?
A- Yes definitely, even MDF has dented the Plywood market for both interior and exterior products. At the moment, our total capacity utilization for all 3 products is around 70 percent. I believe, it will likely take us about a year or so to have complete utilization at MDF. We are growing at around 25%, with growth inMDF, HDHMR, Flooring, UV panels and other value added products.
Q- Do you think Furniture manufacturers and good quality buyers are losing faith in the Indian manufacturers due to this thickness issue?
A- Thickness play is mostly done by smaller companies, when it comes to big brands , we do not follow these practices, we cannot give all the thicknesses and we do not want to cheat our customers. But the issue is, when everyone starts offering a certain thickness, after a time, we have to do that too otherwise we lose out business. But this thickness competition will be a big trouble for the industry.
Q- Why is it not the case for Particle Board?
A- Very good question. I will not say its not there but its comparatively less and according to me, because we sell laminated particle board, maybe thats why all kinds manufacturers who were small in one point of time, may be buying two trucks or four trucks from me who have doubled their capacity so it is very wrong to say that it is not growing. In fact, both these products are growing 20- 25 %, Particle board and MDF and where it is taking is the market of plywood so it is bound to happen 5 - 10 years down the time. I would not say that this would reverse in 10 years like China I have been told the percentage is around 60 % MDF 40 % plywood. In India, also I am assuming 5, 10 years down period, we may also become a 50- 50 kind of a player. Working class people don't want have that hassle of putting the carpenter and getting their house done so this is happening. Also, increase in custom duty on import of furniture will boost domestic furniture industry which in turn should help Indian panel manufacturers.
Q - You have recently started a awareness campaign with ‘studio on wheel’ how it is helping the industry?
A- This is the one thing that we have done best in our promotion career of Action Tesa. We have phenomenal response, moving entire product range in a luxary coach extends a platform where we can reachout to people at their place. We have covered many small cities and have got many dealers, architecture, contractors coming and seeing the bus.We would be displaying in India-wood also.
Q- Is ActionTesa continue to remain on the top position in new age composite materials?
A- Yes, we are and luckily we are not just an MDF company like many of our competitors, we are whole one stop solutions in new gen product so internationally if you will see all these bigger companies than expand their range, so we have flooring, UV coated, Doors as well as HDHMR. At Action Tesa is we are not in plywood and laminates, we are purely focusing on future with a clarity that whatever has happened there in developed countries, almost bound to happen here in India with its growth and progress and hence our products are fututuristic, environmental friendly and affordable for mass production too.
Q- What is the message for retailer community, dealer community in 2021?
A- My message for the dealer and the retailer community is, “ future is MDF for them and future of panel products lies with new generation products,” so anybody who is in the plywood segment as soon as he shifts to MDF business of who so ever brand. I request the dealers to know the benefits and aware people about MDF benefits so that people switch to this new generation products, it will also help them to become leaders of the future furniture industry for sure.
At Action Tesa is we are not in plywood and laminates, we are purely focusing on future with a clarity that whatever has happened there in developed countries, almost bound to happen here in India with its growth and progress and hence our products are fututuristic, environmental friendly and affordable for mass production too.
Q- Your comment on the present demand and economy scenario in India?
A - During last couple of years, the sentiments are not that good when it comes to GDP number or economic growth or real estate.But I would say, this government is working proactively, be it taxes,income tax and fast decision making so there is somebody who really wants to push forward the growth. Please don't forget, we have two massive reforms in our country one was demonetization one was GST. It was like an earth quake for the economy but for the betterment for the economy the government has come up with these which has curbed malpractices to an extent. I feel these efforts of our honourable Prime Minister would give results in the long run and surely would help MDF and particle board industry.
Government is doing lot of measures when it comes to real estate, highly focusing on affordable housing, infrastructure and I am clearly seeing the scenario changing.