The diversification are being seen in Rushil Décor Ltd from laminate to MDF, and launching so many products catering to each and every need of the trade. The group’s VIR laminate has been a pioneer product in this category since its inception. In an one-on-one interaction with the Ply Reporter, Mr Krupesh Thakkar, MD, Rushil Décor Ltd., spoke about innovation, the mission and vision of the company and the growing impact of the MDF industry in the domestic market. Here is a brief on the interaction.
ON THE JOURNEY
I remember when I was studying for graduation my father was doing business with a very good shop at Lathi Bajar in Ahmedabad, Gujarat as a wholesale trading. He had a laminate and a plywood manufacturing plant also. Later, he asked me to venture into laminate manufacturing. At that time, I had just completed my studies and was willing to go into business. After some observation, we acquired a running unit of laminate manufacturing, and then my journey in the decorative industries started from there. In that running unit, the quality was not so good, and we intended to offer the best quality in the market. So, we hired people who could make good-quality products. With our quality offering, demand for our material increased, but most people were still making 0.6mm laminate at the time. The price gap between 1mm and 0.6mm was very high, so we decided to make 1mm. And, for that, we needed to have a good range of designs and papers that was possible only after procuring them from Germany or other European countries, and Japan.
For that, we went to Germany and visited the Interzum exhibition also, but for the first time we did not get a good response. Later, we contacted their representative in India, and then good designs started coming. And with that, we got an excellent response in the market. The customers, interior designers, and architects expect something new every time, so we had to have a very good range. Later, we launched the Touch & Feel series. It also got a very good response, and we began to be counted among the top brands. Our Metal Bond series also got a very good response and, with a number of dealers, VIR laminate became a brand having a pan India presence.
When we used to visit LIGNA, I was always mesmerised by seeing huge machines and plants on display in the exhibition. That was an MDF plant (fully automatic) displayed with all relevant information. I had a great deal of curiosity about establishing such plants in India. Initially, we were not capable of affording that investment, but I never left that dream. After some time, I visited China, where I got a plant model owned by German manufacturer that was affordable and I was quite satisfied with its quality. I finalised it and started MDF manufacturing with a 300 cbm capacity. Later on, we expanded our reach and teamed up with Siempelkamp – the provider of the world’s best technology. With it, we can offer a range from 2 mm to 30 mm. At present, Max pro and Pro plus are doing very well in the market with a pan-India presence.
Q. Your major focus is on MDF. What is the secret behind it?
A. MDF is an environmentally friendly product. A large number of farmers are also associated with it. With the growth of this industry, the farmers associated with it also grow. MDF is manufactured using agro-forestry wood. The MDF surface with density evenness is very smooth and helps in manufacturing good furniture. With it, even thin laminates work well. One can carve on MDF for decorative items. Its pre-lam works well with less laminate consumption. MDF is a future product. Now even small carpenters have started using MDF. They have begun to have their own workshop and have started to supply ready-made products to the projects. And for such an offering, MDF is a good product. The Indian mentality is to have strong yet low-cost products, and if we talk about MDF, it is strong yet cost-effective also. Earlier, MDF was used by OEMs or ready-made furniture makers. Now, when it is being used by small carpenters, the dealers have also started to keep it in stock. Approximately 20% of dealers have ready-available MDF in their stock. I believe that in the near future, MDF will be the primary product for dealers like plywood.
Q. How much time do you expect that MDF will be the primary product in place of plywood?
A. Let us understand! If we talk about the growth rate, it is growing by 20%. So, in my opinion, in the next five years it will become the primary product for dealers. This is because a lot of new lines with good manufacturing capacity are coming. Earlier, 2 to 3% MDF was being sold, which is today by over 15%.
Q. What is the production capacity Rushil is going to add in MDF manufacturing?
A. Our one unit of 330 cbm/day is already functional in Karnataka. The second line is 800 cbm/day. The new plant is a continuous press of Siempelkamp and the refiner is of Valmet – the world’s best technology. With it, we will continue to give the world’s best product. We can offer various sizes, like 8x4, 8x6, etc. It gives even density and we are offering Max Pro Plus made on it with a five-year warranty. We make 40% value-added products and 60% regular commodity MDF with our old capacity, and this ration is 20:80 in the new line, where we offer Max Pro and ProPlus, which we hope to convert to 40:60.Max Pro is a high density, high moisture product that is in very good demand in the market. In the last one and a half years, it has definitely hit a segment of plywood.
Q. You established both the plants in South India. Do you see any geographical advantage in it?
A. If we talk about agro-forestry practices, they are either in the north or the south, and we have to choose either of the two. We opted South due to the easy availability of raw materials and, secondly, the proximity to the market. In the north, there were already two companies working well, and the south was vacant. This was the reason we established our first plant in the south, to remain away from the competition, easy availability of raw materials, etc. The second plant was established in Visakhapatnam so that we could easily cater to the South, East, and West regions, so for that we have made a mother warehouse to cover other regions. Secondly, in case there is a crisis of raw materials, being in the proximity of ports, we can easily import them.
The MDF surface with density evenness is very smooth and helps in manufacturing good furniture. With it, even thin laminates work well. One can carve on MDF for decorative items. Its pre-lam works well with less laminate consumption. MDF is a future product.
Earlier, MDF was used by OEMs or ready-made furniture makers. Now, when it is being used by small carpenters, the dealers have also started to keep it in stock. Approximately 20% of dealers have ready-available MDF in their stock.
Q. Green Colored MDF are being sold under the name of HD+ MR. Does it not pose a challenge for the industry?
A. This is an old practise in the trade, going back in plywood, and now it has started in MDF also. It should not be done because, due to it, the customers would not trust HDF. Every dealer should also support checking it. To get the genuine product, they should check its quality by putting a piece of MDF into water for at least 12 hours. They can check if the thickness has not increased or if the fibre is not coming out from it. They should sell it, ensuring the right product. It will build their trust among customers. Max Pro comes with a 5-year warranty.
Q. What changes have you observed in the industry in the last three decades?
A. When we came into the laminate business, its usage were just for surface protection, and that was available in a few colours like white, ivory, gray, rosewood, etc. Slowly, the laminate industry turned into a fashion industry and the design offerings reached 600 with a lot of other finishes. Later came the metal series, etc.
If we talk about the market, I remember when we entered into the trade, the production used to start after demand and payment were received. Now the credit has reached 90 to 120 days. The marketing style has also changed as compared to earlier chain sampling, which has become catalogue sampling and e-sampling. So, the laminate industry has seen a profound change.
If we talk about MDF, no dealers were interested in selling it, so today there is now 20% ready stock with them. In some places, exterior grade is also being sold. In pre-lam also, it started with 4 to 5 colours, and now it has 70 to 80 colours.
Q. A lot of new MDF plants are coming. Would you see any price correction in MDF in 2023?
A. In 2023, a lot of capacity addition is there to come, but the growth rate is also high. So, in the beginning, there would be some competition, but as capacity consumption gets stable in the market, the price will also get stable. There is no such pressure in the future in terms of price. If we talk about importing, the logistic cost is high and is not going to drop in the near future. The dollar, which has reached Rs 80 from Rs 76, is also a factor that the price is not going to drop.
Q. The timber price is increasing, but the customers ask for a cost-effective product. What is your view?
A. The price is definitely rising with its rising demand. Whenever we establish a plant, we see if there is any wood-based industry within the proximity of 200 km. And if there is any, how much wood is available and what is its consumption? Secondly, after establishing the plant, we do plantation for 1.5 times more than the requirement within that limit. So, near the Chikkamagaluru plant, we do 70 lakh plantations every year. And, near Visakhapatnam, we plant 2 crore 10 lakh trees every year to ensure that there is no raw material shortage in the future and that farmers receive regular income.
Q. Carpentry has evolved with the passage of time. Do you see an opportunity in ready-made furniture?
A. When it comes to furniture, very few people in India used to make good readymade furniture. Now, its numbers are increasing. The government is also focusing in this direction and is giving thrust to furniture made in India. Today, a lot of furniture is imported from China, so a large part of the revenue is going out of India. So, the government also wishes to have a large number of furniture manufacturing plants in India. The states are also focusing on it and making furniture parks. Governments are giving subsidies to small units. So, the small carpenters are establishing workshops. Slowly, many players will come to India. For that, every dealer should be prepared with what they can supply for readymade furniture and maintain their stock and display in shops, like MDF and hinges, etc.
Q. What is your message to the trade?
A. My message to the trade is to sell MDF as a primary product, so that good products go into the market. Do not promote fake products; sell quality products like Max Pro.