Century Plyboards (India) Ltd, the country’s largest manufacturer of wood panels, has set an ambitious target to more than triple topline in the course of the next eight years as it banks on residential housing growth and a rise in discretionary spend on lifestyle.

The company management believes it can achieve a Rs 12,000-crore turnover by 2031, which will entail sustaining a 15-20 per cent growth henceforth. Calcutta headquartered Century had clocked a Rs 3,600-crore turnover in 2022-23.

To achieve the target, a fresh bout of capital expenditure will be required to augment capacities.

This will be over and above the Rs 2,000-crore capex CenturyPly is executing over three years to 2024-25.

As part of the ongoing expansion, CenturyPly inaugurated an integrated wood panel manufacturing unit in Andhra Pradesh.

The company has invested Rs 700 crore in medium-density fibreboard (MDF) and Rs 250 crore in laminate and PVC in the first phase. The unit, inaugurated by AP chief minister Y. S. Jagan Mohan Reddy on Saturday, will double Century’s footprint in MDF.

While the company operates in four verticals of wood panels, the plywood segment alone contributes over 55 per cent to the topline. However, it believes MDF and particle board would potentially be strong contributors to the revenue.

“We target to reach Rs 12,000 crore turnover by 2030-31, where all segments — plywood, MDF, particle board and laminate — will contribute. We are looking at double-digit growth in plywood and 20 per cent plus growth in laminate, MDF and particle board,” Keshav Bhajanka, executive director of CenturyPly, said.

MDF and particle boards also offer higher margins at 20-per-cent-plus, while laminate is about 14-16 per cent. The margin is 13-15 per cent in the plywood segment, he disclosed.

There will be multiple expansions required to reach the target and the ongoing phase is the beginning of that journey, Bhajanka said. However, he could not detail the proposed investment as it is yet to be approved by the board.

The investment quantum will also depend on the category it chooses to expand. For instance, for laminate and plywood, the asset-to-turnover ratio is 3 and 4, respectively, while in MDF it is 1.5 and in particle board 1.2.

CenturyPly will always be on the lookout for new products which can be pushed through the company’s existing distribution channel, Bhajanka said.

For instance, it entered the PVC board category and set up a factory in Andhra. In the existing phase of the capex cycle, the company is also setting up factories in Punjab and Tamil Nadu as well.

While the ongoing investment is large, CenturyPly does not have any plan to raise money by equity. “We are a cash-rich company and mostly the funding requirement will be met from internal cash generation,” the ED informed.

However, the company will resort to short-term debt as the scale of expansion is large in a short period for Century’s balance sheet to support. However, it plans to pre-pay the loan to maintain a healthy financial profile.