Mr Vishal Dokania, Director, Durian Laminates, Cedar Decor Pvt. Ltd. was in conversation with Pragath Dvivedi on 05 December 2021 on Ply Reporter’s BRAND BUZZ. Ply Reporter's Brand Buzz is special episodes, a video content platform that gives an opportunity to brands for sharing their USP, new features, innovation, latest updates, and important messages to business channel partners and industry. Mr Vishal Dokaina is heading Cedar Decor Pvt Ltd in Durian Industries laminates vertical. Cedar Decor is Gujarat based largest laminate manufacturing company with pan India distribution channels. They are also one of the fastest growing laminate companies with production of six lakh sheets per month. Here is a brief synopsis of the conversation.
How has been your journey so far and how do you feel in this industry now?
I have an interesting background and have lived in multiple cities in India and abroad. I was born in Kolkata, went to boarding school in Darjeeling and studied in the US for almost 9 years doing MBA and Computer Engineering. When I was finishing my MBA, my family members started a laminate plant in Ahmedabad, that really considering my entry in coming back and joining the family business. For me there was a jock in my family that “I turned from software to hardware.
What changes did you observe in the industry?
The competition is very tough now! If we see the history of 15 to 17 years, the number of companies have increase many folds. When the competition increases the creativity and innovation also increase. The complacency do not work, so you have to have a very good connect to the industry right from local suppliers, international suppliers, manufacturing companies, departments, pollution, ground water, etc, so, with everything the compliance has increased.
Now slowly the laws are being implemented effectively. In the frontend, to have a deeper connection with the customers (the dealers, distributors and end consumers) are much important because there are numerous companies competing against you. So, you have to on your toes for situational awareness. These are traits applicable to the entire industry fraternity as if at manufacturing level the competition has increased; similar is the situation at the distributors’ level.
Now the consumers have more choice which is good for them. At the benefiting point the consumers as well as the manufactures both are winners because now with competition the manufacturers have to innovate more and the customers have more choice.
How is the growth rate of Durian laminate and how do you see it in this changing times with competition?
Sixteen years before we had one press and every two three years we installed a press. Today we have six presses with installed capacity of 6 lakh sheets. We are very close to achieve its full capacity. The growth has been very good and consistent that is also in an organic way.
For expansion you did not start a new plant but acquired it, why it so?
Timing is the main factor, as today if you start a Greenfield project it takes at least two years to see its first output. We were definitely looking for expansion to add capacity for the purpose of exports and increasing volume in India. We were exporting but not as a keen focus on that. Then at a time the opportunity presented itself, an offer for plant come. We find it good after visiting there and within four days the deal was final.
Did you change the size in offerings along with expansion in capacity?
Mostly there are normal sizes of laminate in offerings but with current acquisition we have 7’x4.25’ size press also. Also we are working on not just laminates and door skin but ready doors also under the name of DURIAN DOORS with lot of creativity there. The demand for ready doors has risen quickly.
Is it the laminated door or an entirely different segment in doors?
Definitely it is a backward integration of Durian as DURIAN DOORS, but the door skin laminates market is also very good. Again this is optimisation, as a lot of people are making 8x4 ft doors that are wastage of material by 20%. This is more of optimised product for the choice of people who want laminated doors. They can use 7x3.25 ft laminate and get the price as well as cost efficiency.
In last two years we have seen in door skin that prices have become a big issue and competition has grown. Isn’t it like liner laminate segment?
No, absolutely not! As it has lot of value addition and creativity especially with addition of digital door skins. We have observed almost 800% growth in our door skin demand in one and half years. So, the growth is accelerating. It is definitely not a commodity or cheap product.
Do you think that there is a change in designs in laminate sector also? What is the next trend?
If we talk about high end segments’ laminate like architects’ and interior designers’, the design did not fluctuate very much. For example, the European printers – the leaders in the world bring their collection once in every two years, so the day to day design change is not there in this segment.
There was a slight shift in solid colours which was slow at a moment, people were looking for softer solid to look little warm to the room or space. Yes, in retail segment there has been change especially in lower thicknesses people still like the jazzy and fancy stock. In higher thickness there is shift towards natural veneers and more natural look are in greater demand.
In laminate segment the folder is a pain point. Do you think that people are doing justice with it?
If we see five years before and toady the awareness for the safety and proper use of catalogue is more now. Earlier on an average at every 30 to 35 sheets one catalogue was sent that time its cost was also less. A good size typical catalogue was of less than Rs 800. Now the laminate input cost has increased and labor cost has also increased, so a big size catalogue crosses over Rs 2000.
On the other hand price of laminate did not double because the prices did not get observed. In ILMA board there is also discussion that reduces the cost of catalogue. The cost of unit catalogue does not come down because people have to have good presentation. But the number definitely reduced depending on factory to factory and customer to customer. I think for about 40 to 50 sheets one catalogue stabilisation is there now.
The cost of product increases due to catalogue and the dealers input play a greater role in it. So, if anything which costs Rs 2000 should not be wasted. If you think that this catalogue does not have sales at our counter you should get it back to manufacturers. There should be no wastage of it as the wastage is of a money point of view, resource as well as the environmental point of view.
You say if the dealer has no use of catalogue they should return it. If a dealer returns the catalogue how could they sell their laminate?
Do you think that a dealer has 200 catalogues and they are doing justice to them? What I do is return to the suppliers if the samples coming from them are not in use. Despite, it does not cost me for keeping and later on scrapping them, we think just as an environmental perspective also we return it because the material made of phenol, formaldehyde, melamine do not get disposed properly. So, if we see a larger picture from an environmental perspective this is not good to scrap and throw these things.
What changes are there and what growth opportunity do you see in Durian Laminate?
In the last two years during covid times a lot of brainstorming sessions has happened in the company and action has also been taken on that. Earlier the service time was very long, which was a very big problem and we were aware of it. For that we came to the conclusion that it will not go on because we know that laminate is also a service solution. We have set up a warehouse of 50,000 sq ft in which we have over 200000 sheets ready stock of all our folder items.
With this our turnaround time has reduced to 6 days only from 20 to 21 days, service has become faster, distributors are very happy and we are not losing orders now. From a product offering point we have put a lot of effort into value add and material selection to make unique items. We are getting very good results on that. The catalogue presentation and layout improved significantly. In the future we have few set targets like setting up new plants for exports and increasing domestic presence. At present we have 6% of exports which is going to be 20% in the next two years
You have a lot of brands, how do you handle all its SKUs comfortably?
It is a pain, but if you handle it properly it becomes an opportunity that is the way we always looked at it. There are various segments in laminate and we are presenting in all these segments. We see in particular segments the material is not being sold, we have capacity and bandwidth, so why not cater to that. By this way we are present in every city and every corner of the country and in one city we also have something to offer in the entire segment. Today we have over 3000 SKUs of finished products. I am from a software background so first thing we got in detail in ERP, if we manufacture ten products or 10000 products we can manage it very easily. We keep a track on it.
Do you see SKUs growing further or limiting it to this level?
No! No! Not growing, the growth came about a few years ago but now it is tapering off. Overall in the current trend the distributors also don’t want catalogues with 500 items but the smaller selection of items which sells more because with it the dead stock inventory reduces and service rotation becomes faster. I think the varieties are shrinking slowly and the catalogues are becoming more efficient.
How do you see the situation further in terms of prices of laminate with softening it now after raw material price coming down?
In the laminate industry the supply and the capacity to supply is very high in comparison to overall demand so the pressure on price would be there with competition, so we have to innovate to be in this big market. In terms of price there is a big gap in the cost of raw material today and one and half years ago.
The price of raw material is still highly fluctuating and this is a global scenario. In a year over all the price of every single item has increased. There are a lot of issues like shipping, manufacturing; logistic etc. the biggest problem is inflation because the majority of governments across the world have printed a lot of currencies to increase the supply of money.
What are the advantages of making a balancing sheet and decor; and is making a balancing sheet beneficial for the company?
At Cedar Laminate, the ratio is 30:70 in respect to balancing sheet and decor. The viability lies with the focus on production and engineering. The same sheet can be made reducing the cost of production by 20 to 30% with proper engineering, technology, and control. Purchases also play an important role in cost reduction by having everything in advance with strong financial capacity.
Now these days pre-lam MDF and pre-lam boards are growing, do you see its impact on laminate also in coming times?
Nothing is going to be noticeable. Plywood and laminate both are growing at a phenomenal rate as India is a huge market. In terms of pre-laminated MDF and Board both are growing very well. The demand for laminate has not even seen its plateau. The volume from small cities and rural areas has started coming now so the entire horizon is open for laminate.
How is the satisfaction level of distributors at Durian Laminates?
Today we have 140 stock keeping distributors across the country, but when we started in the industry with 10 or 12 distributors. Those 10 or 12 are still with us. This is the satisfaction level of distributors at Durian Laminates.
What is your opinion on non-folder and thickness changes like 0.9mm or 0.7mm?
A number of dealers/distributors come to me and ask to give select items either from our folders and others; we typically discourage these types of activities. We have enough assets (we call our catalogues as assets) and we have something for everybody. Besides, if anything is needed there is no end to it. If we make it, can be made but the efficiency is not there off what has been planned. This is not to our interest of work. I know that trade people have a bigger margin in this that is why they wanted to be non-branded.
The thickness is a pressure of optimization and competition and applications as well. Similar to board base, if it is calibrated and smooth, one can use 0.4mm laminate also. If we add thickness to the laminate it will hide uneven surfaces. When we talk about exports, I was surprised to know that there is a huge amount of 0.5mm demand and they are buying big volumes and for years. They take high quality paper because they have to paste on calibrated MDF.
In India lower thickness is made for low priced value markets, do they maintain quality?
If we want to maintain quality, it will definitely be maintained. Two things have a high impact on thin laminates in India. If you look at its catalogue the entire selection is based on lower cost design papers. European paper comes at Rs 600/kg while Indian paper comes at Rs 220/kg, so almost three times the gap is on only decor paper. Besides, the Kraft, resin and all other chemicals cost is there.
So, the price is definitely less but how much savings is at manufacturing, the sales is at much lower price in the market. So, there is definitely the squeeze on the margin of the factory also. The thickness is the need for applications as some place 0.6mm is used and at some place 12 mm is used. I think ISI is loophole as they allow up to 10% thickness variation. When you are exporting the allowed variation is only 5%.
What is your message to industry, trade, dealers, and distributors?
This is a fantastic industry. We just need to be a little bit efficient as the inefficiency brings a huge loss across the trade. The inefficiency can be at any point, volume, stocking, financial, etc. So, any entrepreneur whether it is dealer, distributors, retailers or factory owners, put all the following things: capability, financial resource, human resource etc in front of you and then only plan for the next steps for growth strategies.
Business is nothing but the management of limitations. No business in the world has unlimited resources. So, how to optimize the available resources is very important and will save everybody’s lot of hidden expenses. This trade can do wonderful things if we are complying with industry norms and achieving 100% billing, etc. For short term gain your long term prospects get destroyed.
This is seen not just in our industry, it is in every industry. With the way the government is using compliances and watching everything as they stand online, people need to correct themselves now else they have to pay for them. Very soon people will realize that hanky-panky business cannot sustain.
Mr Janak Vyas, Vice President (Sales & Marketing), Cedar Decor Pvt Ltd shared his opinion on the legacy of his association with the company.
How many distributors have left Durian Laminates in the last 15 years?
In 2005 we started with distributors with one brand. Today in India nearly 150 distributors in different brands are working with us. I think when they have some problems, queries, and their own opinion; they come to us and discuss everything with management. You would be surprised to know that not only distributors are very satisfied with us but also 60 % of our sales team are also 8 to 9 years old. I myself have been with the company since day one and have completed 16 years now.
There are many folders with Durian, which folders do the customers like the most?
I would like to ask, do parents differentiate among their children? They are all our sons and we have to have equal treatment and nurture with them all. So, for us all our brands as well as distributors are equal. When we create any folder with its design and the products we get consultancy with the panel of distributors for that. So, every distributor gets any the catalogue based on their customers’ choice, purchasing power, sales etc.
What is unique and different in product and service offering from Durian Laminate than others?
We go for the best in that segment. We go to European, Japanese to get the best designs and SKUs. Our prime focus is the customers as they are our trade partners. They will only guide us on which types of products they could sell in the market.
What is unique about the company that you have been associated with for over 15 years?
This is the trust of my directors in me. He accepts my opinion and suggestions. A lot of new management and fundamentals come from him and we are tormenting for that. Life is a learning phase every time so ours is a modern management with perfect blend of value and ethics.