management research project i on - ganpat...
TRANSCRIPT
1
A
Research Proposal
For
Management Research Project – I
on
“PLYWOOD INDUSTRIES”
Submitted By:
ARPIT H. PATEL (12044311067)
POOJA B. SONI (12044311154)
PARTH S. PATEL (12044311111)
MAULIK N. SOLANKI (12044311152)
M.B.A. Semester III
Under the Guidance of:
Prof. (Dr.) Mahendra Sharma
Prof. & Head
V. M. Patel Institute of Management
&
Prof. Harsha Jariwala
Prof. Abhishek Parikh
Faculty Members
Submitted To
V. M. Patel Institute of Management
Ganpat University
(NOVEMBER , 2013)
2
CERTIFICATE BY THE GUIDE
This is to certify that the contents of this report entitled “PLYWOOD INDUSTRY WITH
FOCUS ON FURNITURE ROW MATERIELS” by Arpit Patel IBM-(067) , poojasoni HR-
(154) , Mauliksolanki- (152) , Parth Patel- (111) Submitted to V. M. Patel Institute of
Management for the Degree of Master of Business Administration ( MBA Sem- III) is original
research work conducted by them under my supervision.
This report has not been submitted either partly or fully to any other University or Institute for
award of any degree or diploma.
Prof. (Dr.) Mahendra Sharma
(Prof. & Head)
V.M.Patel Institute of Management,
Ganapat University,
Kherva.
Date: November,2013
Place: Kherva
3
CANDIDATE’S STATEMENT
We hereby declare that the work incorporated in this report entitled “Plywood Industry Of
India” in the partial fulfillment of the requirements for the award of Master of Business
Administration ( Sem-III) is the outcome of original study conducted us & it has not been
submitted earlier to any other University or Institute for award of any Degree or Diploma.
ARPIT H. PATEL 12044311067
POOJA B. SONI 12044311154
PARTH S. PATEL 12044311111
MAULIK N. SOLANKI 12044311152
Date: November, 2013
Place: Kherva
4
PREFACE
As the part of MBA curriculam and in order to gain particular knowledge in the field of
management, We are required to make a project report in our semIII ( Management Research
Project – I )
Plywood industry is the leading player among the industries, plywood is a manufactured wood
panel from thin sheets of wood veener. Plywood layers are glued together, with adjacent plies
having their wood grain rotated relative to adjacent layer up to 90 degrees.
All Pluwood bind resin and wood fiber sheets to from a composite material. This alteration of the
grain is called cross graining and has several important benefits: It reduces the tendency of wood
to spilt when nailed at the edges; it reduces expansion and shrinkiage, providing improved
dimensional stability; and it makes the strength of the panel consistent across all directions.
There is usually an odd number of plies, so that the sheet is balanced- this reduces warping.
Cause of leading player around the country & world there are vast number of players in this
industry. There are not any successful brand in this industry. So its open playground for the
wooden busineemen&enterpreneurs.
5
ACKNOWLEDGEMENT
We would like to take this opportunity, to express our most sincere gratityde to Dr. Mahendra
Sharma, professor & head, V.M.Patel institute of management for his assistant to give chance for
prepare MRP- I reports.
We would also like to thanks to Prof. MS.HarshaJariwala for her assistant and support without
which project would not successfully completed. She provides us all necessary guidance.
We are heartily thankful Prof. Mr. Abhishek Parikh for them support in preparing this report.
We would also like to think to all faculty members of V.M.Patel Institute of Management,
Ganpat University, Kherva. Mehsana.
6
INDEX
NO. SUBJECT Page
No.
1 Certificate by the guide
2
2 Candidate’s statement
3
3 Preface
4
4 Acknowledgement
5
5 CHAPTER -1
Introduction of the Industry.
1.1 Industry Profile……………………………………..
1.2 Outlook of Indian Plywood Industry……………….
1.3 Industry Structure & Development…………………
1.4 Indian Plywood Industry……………………………
1.5 Real Estate Growth…………………………………
1.6 Information Technology……………………………
1.7 Wood Based Panel Industry In India Die’s wealth…
1.8 Wood Based Panel Industry In India……………….
1.9 Wood Based Production……………………………
1.10 Important involvement and Activities of Federation
since its Inception…………………………………..
1.11 Feature of Industry………………………………….
8
9
11
12
13
14
18
20
21
25
28
35
7
6 CHAPTER-2
Major Player Of Industry.
2.1 Century Ply…………………………………………...
2.2 Green Ply……………………………………………..
2.3 Kit Ply………………………………………………...
2.4 Archid Ply…………………………………………….
2.5 Sarda Plywood………………………………………..
36
37
45
51
55
60
7 CHAPTER-3
Competitive Analysis.
3.1. The Concept Of Driving Forces……………………...
3.2 Porter’s Five Forces Model…………………………...
3.3 Strategic Group Mapping……………………………..
3.4 EFE Matrix…………………………………………...
3.5 CPM Matrix…………………………………………..
3.6 Phase Of Industry……………………………………..
3.7 Challenges for Industry……………………………….
3.8 Opportunities For Industry……………………………
3.9 Threats For Industry…………………………………..
65
66
67
72
74
78
81
83
84
85
8 CHAPTER-4
Financial Analysis
4.1 Trend Analysis Of The Industry……………………...
4.2 Ratio Analysis………………………………………...
86
87
92
9 CHAPTER-5
Conclusion………………………………………………..
106
107
10 CHAPTER-6
Bibliography………………………………………………
108
109
11 B. Plan
110
8
9
1.1 INDUSTRY PROFILE
The history of plywood industry in India is old. It is more than 75 years that this industry
was started here on a very modest scale. It was in the year 1906-07 that plywood was
imported in India for the first time-valued at Rs.32 lacks. Imports rose steadily and by
1924-25 it were worthRs.90 lacks. Tea Industry in Assam, West Bengal and Kerala was
steadily developing and it was thought that plywood industry in the form of Tea Chests
production mainly for export should be developed. Accordingly two plywood factories
were started in Assam in 1923-24 but their development was steady and slow and not
phenomenal. These were the pioneers and there forcefulness and courage shown by them
in the early stages of growth of Plywood Industry was remarkable and the industry owes
gratitude to these courageous entrepreneurs.
After 1947-48, the industry resorted to diversification of its products and block boards,
flush doors, commercial plywood, decorative plywood, marine and aircraft plywood’s,
produced in Indian factories came into the market which were second to none in the
world in quality and diversity of its products.
Industrial Licensing is governed by the Industries (Developmental and Regulation) Act,
1951under which the wood based industry was covered. There was no restriction of
putting up plywood Mill up to 1970. The only criteria was that the applicant was required
to obtain an Industrial License which was being considered by Ministry of Industry after
consulting various Ministries including Ministry of Environment & Forests. Forest
Ministry was being consulted for ascertaining sustainable raw material of Timber for a
particular project; the Wood based Industry was more or less in Medium and Large scale.
The Wood based Industry was under Compulsory Industrial Licensing from 1988
whether a small-scale unit or a Large/Medium unit, new undertaking or substantial
expansion would require Industrial License. During 1970 there was clear cut definition of
Small Scale Sector and units having an investment of less than 7.5 lacks in Plant and
Equipment were covered under the definition of Small Scale Sector which would be
registered with the respective State Director of Industries. At that particular stage some of
the units with such investment got themselves transferred to small scale sectors.
10
Meanwhile there were modern technology and machinery equipped plywood units
coming up indifferent places in India like North Eastern Zone. In 1997 the Government
of India totally licensed wood based industry as a result more than 2000 small-scale units
coming up.
The potentialities of the industry can be judged from the many uses to which plywood
can be put. Apart from tea chests plywood marine and aircraft plywood there are specific
demand for the following articles from the consumers:-
1. Shuttering Plywood
2. Packaging Plywood
3. Plywood drums
4. Flush doors
5. Commercial & Decorative Plywood
6. Block Boards
7. Molded Plywood furniture and chair seats
8. Laminated picking sticks for cotton and jute textile industry
9. Sliced decorative veneers of walnut, teak, rosewood etc.
10. Compregnated wood veneers required for heavy chemical industry and electrified
railways.
11
1.2 OUTLOOK OF INDIAN PLYWOOD INDUSTRY
The interior infrastructure sector comprises wood panel and decorative surfacing
products, tiles, marble, all kinds of granite, paints, sanitary ware, gypsum boards, glass,
plywood, decorative veneers, decorative laminates, particleboards and medium density
fiberboard (MDF).The Indian furniture industry is pegged at Rs 36,000-crore.
Indian furniture, reputed for its design, fashion and technology quality, is exported
worldwide. Around 85 percent of the industry is unorganized while the 15 percent
comprises organized manufacturers and exporters. This is expected to grow by 13-15
percent in the next five years.
The fragmented Rs 13,000-crore Indian plywood and laminate industry is growing
8percentannually. Although the unorganized sector accounts for around 80 percent of the
plywood industry and 50 percent of the laminates industry, the organized sector¶s
25percent annual growth outperformed industry growth.
India is one of the largest consumers of wood in Southeast Asia with sufficient tropical
wood of all varieties. Imports are mostly from Malaysia, Myanmar, Indonesia, Nigeria,
Ivory Coast, Ghana, Togo, Gabon, Brazil, Panama, Costa Rica, Ecuador and New
Zealand. The major ports used for imports are Kandla, Mumbai, Mangalore, Tuticorin,
Chennai, Vishakhapatnam and Kolkata as well as many internal container depots
Major Player in Industry:
1. green ply
2. Century ply
3. Kit ply
4. Acridly
5. Sharda plywood
12
1.3 INDUSTRY STRUCTURE AND DEVELOPMENT
According to industry estimates, Rs.13,000crore Indian interior infrastructure industry is
poised to grow at 10% annually over the foreseeable future. Plywood comprises around
60% of the interior infrastructure industry and is set to gain the most. India’s real estate
sector is expected to grow from USD 14 billion to around USD 50billion by 2020, which
increase the share of real estate in India’s GDP from 5% to 6%in five years, translating
into growth for the country’s interior infrastructure sector.
India’s per capita income doubled in seven years and is expected to increase to USD
2,000 by 2016-17 and USD 4,000 by 2025. Increasing per capita income strengthened the
consumption of lifestyle products like furniture. Traditionally, Indians have invested in
real estate, which augurs well for interior infrastructure companies.
As in many other timber processing sectors in India, the share of small and medium-sized
companies in the furniture sector is around 85% of the total output, which is expected to
decline following a movement towards economies of scale and stronger tax coverage. As
a result of the growing housing and tourism sectors and rising per capital incomes, the
furniture sector output is expected to grow 15% annually for the next five years.
The furniture sector sources a significant share of raw materials from local agro forestry
plantations and species like sissoo (Dalbergiasissoo), babul/kikar (Acaciaarabica), mango
(Mangiferaindica) and neem (Meliaazadirachta).
The country’s furniture sector is predominantly in the hands of small unorganized units.
Fortunately, large corporations have started taking interest in the production of modern
furniture. The plywood industry, which is hardly discussed in any national forum is
growing at a rapid pace. Moreover, following the recent spurt in the housing sector
plywood and laminates are likely to play a more prominent role.
13
1.4 INDIAN PLYWOOD INDUSTRY
Indian plywood industry is estimated at Rs.7,800crore and the laminate industry at almost
Rs.3,000 crore, expected to grow 10% annually. The Indian plywood market is
fragmented with small and medium-sized companies accounting for almost 80% of the
total market. The rest is supplied by large companies with the advantage of volume,
quality and superior manufacturing facilities. Plywood alone accounts for 78% of the
wood panel market in India, the rest comprising engineered panels like MDF and
particleboard. For the housing interiors industry, the Indian market is still dominated by
plywood and block board though the trend is changing following a growing share for
particle board and MDF.
Panel and plywood are the main wood products in India. Their product categories include
veneer sheets, particle board (composite wood core with plastic laminate finish), panel
products (fiber board), plywood from hard and softwood (veneered panels and laminated
woods) and medium density fiber boards. Imports constitute 20% of the total annual
wood consumption in India, while plantations and forestry contribute 58% and 22%
respectively.
Timber and wood products are in good demand, their prices firming. The shortfall in the
supply of non-teak hardwood is met through the import of Malaysian hardwood logs.
Teak trade is active, prices hardening, owing to continuing demand from Europe, the US
and the Middle East. Higher log prices are pushing sawn-wood prices higher. The
demand for plywood is steady. Local production costs are rising; the import of plywood
and other panel products from China make it difficult for Indian producers to pass these
cost increases to consumers.
14
1.5 REAL ESTATE GROWTH
The contribution of this sector has gone up to Rs.1.02 lacks crore in 2010-11 compared
with Rs.35,885crore in 2004-05, registering annual compound growth of 19.16% in the
last six years. According to global real estate consultant Jones Lang LaSalle, the sector
will witness further growth with most companies operating in the city firming up
expansion plans or executing real estate growth plans with upswing in the economy.
According to the report of the Technical Group on Estimation of Housing Shortage, an
estimated shortage of 26.53 million houses during the Eleventh Five Year Plan (2007-
12)provides an attractive investment opportunity.
According to Department of Industrial Policy and Promotion (DIPP), housing and real-
estate sector (including Cineplex, multiplex, integrated townships and commercial
complexes etc.), attracted a cumulative foreign direct investment (FDI) worth USD
9,405million from April, 2000 to January 2011, wherein the sector witnessed FDI
amounting USD1,048 million during April-January 2010-11.
India has one of the largest number of retail outlets in the world. In the past few years,
retail development has been taking place not only in major cities and metros, but also in
Tier-II and Tier-III cities.
According to a report released in October, 2010 by Cushman & Wakefield, 240
millionsq.ft of commercial property and about 4.25 million units of residential property
will be required to meet demand over 2010-14. Office space demand will total about 55
millionsq.ft. Hotels are likely to experience demand for about 78 million room night’s
over2010-14.
Segment-wise performance
• Plywood and allied productsHighlights, 2010-11
• Grew 32.82% in value terms and 20.61% in volume terms
• Enhanced overall capacity utilization from 110% in 2009-10 to 119%
• Increased production from 26.36 million sq.mtr in 2009-10 to 29.70 millionsq.mtr
• Enhanced sales from 28.67 million sq.mtr in 2009-10 to 34.58 million sq.mtr
• Created the flush doors vertical; increased the sales from Rs.30.12 crore in2009-10 to
Rs.43.90 in 2010-11
• Increased rural revenues from Rs.30 crore in 2009-10 to Rs.63 crore
15
• Introduced products in the technical plywood segment for the transportation industry
• Added compare plywood to the product basket.
Medium density fiberboard (MDF)
• Due to a series of unexpected developments in the first half of 2010-11, the plant could
not resume production. Following repairs, the plant recommenced production in October,
2010 and achieved a capacity utilization of 57% in March, 2011.
• The product was accepted and appreciated. The division offered more sizes than
competitors.
• The Company received FSC Certification of Controlled Wood (CW) and Chain of
Custody (C-O-C). It is working on new resin technology, meet worldwide standards on
formaldehyde emissions and obtain E-1 and CARB certifications.
• The unit expects to achieve 60% utilization in 2011-12, making Green PanelmaxMDF
market leader in India, riding growth in the Indian furniture market and evolving
preference from cheap plywood to MDF. The division expects to cross 90%
capacityutilisation in 2012-13.
Laminates and allied productsHighlights, 2010-11
Laminates
• Production increased from 7.2 million sheets in 2009-10 to 9.37 million sheets
• Average realization increased from Rs.436 per sheet in 2009-10 to Rs.480 per sheet\
• Capacity utilization at 94% on enhanced capacity.
• Exports grew 54.89% from Rs.101.59 crore in 2009-10 to Rs.157.35 crore
• Launched new Green Design Studios in Ludhiana, Kolkata, Gangtok, Bhopal,
Erode,Bhatinda, Raipur, Ranchi and Chandigarh
• Launched anti-bacterial laminates for the first time in India
• Launched ‘Extraordinaire’ brand of super premium laminates (digitally printed,
customized and unicore laminates)
• Recruited McCann-Ericson to provide brand solutions
16
• Created a specific website for Rest Room Cubicles
Decorative veneers
• Increased production from 1.19 million sq.mtr in 2009-10 to 1.39 million sq.mtr
• Increased average realization from Rs.662 per sq.mtr in 2009-10 to Rs.723 persq.mtr
• Capacity utilization increased from 28% in 2009-10 to 33%
• Launched value-added products under the brand ‘Impression’, textured veneers and
Sapwood (a veneer category)
Outlook
Residential
• India’s housing shortage in 2007 was 24 million units; this is expected to increase to
more than 26 million units by 2012
• The growing working age population in the 15–60 age group is expected to reach 918
million, or 64% of the population by 2025
• The Census of India has estimated that by 2026 the urban population would rise to
around 535 million or 38.2% of the total population, up from the figure of 285.35million
(27.8% of the total population) in 2011
Commercial
• The demand for office space is expected to increase, driven by a growth in the services
industry (telecom, financial services, IT and ITeS), which accounts for the maximum
demand of commercial office space in the country.
17
Retail space
• The Ministry of Commerce and Industry proposed 100% FDI for multi–brand retail
outlets (approval awaited).
• The share of organized retail in the total Indian retail trade pie is projected to grow at
40% per annum.
Hospitality space
• Demand for hotel rooms is around 2,40,000 rooms, while supply is around1,00,000.
• This gap is expected to reduce as several hotel projects are in the pipeline.
• The potential for budget hotels, service apartments, spas and other niche products is
significant.
18
1.6 INFORMATION TECHNOLOGY
In today’s business environment, information is power and a critical asset for any
organization. As we accelerate our pace, we need to understand how information
technology (IT) impacts organizational characteristics and outcomes. Staying abreast the
technology curve gives an organization an edge over its competitors, expands business
operations portfolio and brings in new customers. The business environment in these
times demands that organizations continually respond to evolution, change and
transformation, while laying parallel emphasis on becoming agile, quick response and
increased productivity. Every business has to focus on the cost elements of their
operation and for ways to do more with less.
Information technology is a wide field, and has enabled organizations across the world to
work in an efficient manner. It plays a very important role in effective management and
running of a business. Information technology contributes largely to process
advancements in organizations.
Your Company kept its focus on the use of technology in processing various transactions
to improve operational efficiency. Green ply is witnessing strong business growth year-
on-year, and is going to surge incrementally with increase in consumer sentiments in
domestic and global markets. Our IT strategy has complemented the business initiatives
and ensured that benefits are realised at operational level.
In the year under consideration, your Company rolled out applications like Business
Intelligence for faster and drilled down analysis. BI (Business Intelligence) addresses the
challenge to transform data into information, which can be further used for taking apt
business decisions. The year also saw us expand our SAP ERP domain with new roll-outs
in various domains.
Another important technology your Company effectively started using is Unified
Communications. This technology of Unified Communications helps achieve strategic
objectives of enhancing employee productivity, improving collaboration and reducing
cost of telecom operations.
IT is a driver for business transformation. We are geared up to embrace technology, to
bring new innovations in our business and become more competitive in the market. Your
company shows that IT will stand true in reciprocating the trust and faith through
business enabled IT solutions and will help improve organizational effectiveness.
19
Risks and concerns
At the core of the Company’s risk-mitigating initiatives, there is a comprehensive and
integrated risk management framework, which comprises stringent norms and regulations
along with a prudent control mechanism. The risk management approach conforms to the
Company’s strategic direction, which is in line with shareholders’ desired total returns,
the Company’s credit ratings and its desired risk appetite.
Internal control systems and their adequacy
At Green ply, stringent internal control systems and procedures checked the unauthorized
use of products, ensuring optimal resource utilization. The Company conducted regular
and extensive checks at every stage of its production and dispatch cycle to ensure strict
operational and quality compliance. An Audit Committee, headed by a Non-Executive
Independent Director, periodically reviewed audit observations.
Financial and operational performance
Green ply’s gross turnover increased by 40.64% to Rs.1,377.86crores from
Rs.979.68crores in 2009-10. The net turnover recorded a jump of 39.55% to Rs.1216.09
crores. The Company’s operating profit (after adjusting currency gains and other
income)increased by 24.44% to Rs.116.44 crores from Rs.93.57 crores in 2009-10. The
Company’s PAT declined to Rs.25.09 crores from Rs.49.57 crores in 2009-10.
Human resources
Green ply encourages a continuous learning environment, promoting meritocracy. The
employees underwent both functional and behavioral training that would eventually result
in improved productivity; other initiatives comprised a regularized recruitment process as
well as a fair and unbiased performance appraisal system with an inbuilt feedback
system.
20
1.7 WOOD BASED PANEL INDUSTRY IN INDIA DIA’S WEALTH
India was rich in its forest wealth having a huge land area under forests. Practically, all
varieties of forest growth are found in India, ranging from tropical hardwood forests to
high altitude coniferous forests and from deciduous to evergreen forests and Plantation
but unfortunately the forest resources in India is depleting due to increase of population
and other causes. Sound principles of forest policy, administration, timber production and
conservation were introduced by an act of legislature in 1845, and ever since Indian
forests are being managed on scientific and progressive lines. Large areas have
abundance of some of the finest plywood timbers both for constructional and decorative
plywood, Indian teak, Indian Rosewood and Padauk are world-renowned for their beauty
of figure, grain and texture. Gurjan, Vellapine, Hollock and Hollong are only a few of the
many Indian timbers used for making good commercial ply woods. Such continuous
depletion of the natural forest resources of the country due to various consumption of
solid wood, it was felt to conserve the natural resource forest by reconstituted wood
products such as Plywood, Hardboard, Particleboard and Medium Density Fiberboard
(MDF) to meet the rising demand of Wood from the general consumer, Railways,
Defense, Furniture, Laminate manufacturers and the builders. At the same time also it is
trying to meet the wood demand by Bamboo products which are alike to wood.
Instead of depending entirely on natural regeneration of forest resources the Government
of India, NGO and some of our members have taken positive steps for Tree plantation on
large areas in the various states with fast growing species so that can conserve the natural
forest and meet the demand for wood and wood products of various domestic and
internationalconsumers.
21
1.8 WOOD BASED PANEL INDUSTRY IN INDIA
Wood Panel products effect considerable saving of scarce wood as compared to Solid
Timber. The basic types of Wood based panels are:-
Plywood
Particleboard
Hardboard and Medium Density Fiber board
Because of their versatility in application and efficiency in wood raw material utilization
the wood panel products have to a great extent replaced solid wood in both structural and
non-structural uses Plywood.
ParticleBoard
Particleboard is a reconstituted constructional panel particularly developed as a substitute
for natural constructional wood and is made from low grade waste woods or from certain
agricultural ligneous wastes. In that respect particleboard assumes one of the greatest
importance in the wood panel products industry from the point of view of conservation of
scarce forest resources in a country.
In India the first Particleboard plant was set up in late 1950’s at Sitapur in Uttar Pradesh.
There are presently about 12 Wood based and agriculture ligneous waste based
Particleboard units in India.
Hardboard and Medium Density Fiber Board (MDF)
Fiberboard is a board encompassing sheet materials of widely varying diversities
manufactured from refined or partially refined wood fibers or other vegetable fibers.
Bonding agents and other materials may be incorporated in the manufacture to increase
strength, resistance to moisture, fire or decay.
The first Fiber board (Hardboard) Industry was established in India during late 1950’s
and the first Medium Density Fiber board plant was set up in India about 20 years back.
Plywood was the first type of engineered wood to be invented. It is made from thin sheets
of wood veneer, called plies, which are stacked together with the direction of each ply's
22
grain differing from its neighbors by 90° (cross-banding). The plies are bonded under
heat and pressure with strong adhesives, usually phenol formaldehyde resin1, and making
plywood a type of composite material.
A vast number of varieties of plywood exist, tailored for all manner of conditions and
uses. Softwood plywood is usually made either of Douglas fir or spruce, pine, and fir.
Decorative plywood is usually faced with hardwood, including red oak, birch, maple,
lauan (Philippine mahogany) and a large number of other hardwoods.
Plywood meant for indoor use generally uses the less expensive phenol-formaldehyde
glue (which has limited water resistance), while outdoor and marine grade plywood are
designed to withstand rot and use a water resistant phenol-resorcinol glue to prevent
delaminating and retain strength in high humidity.
Plywood production requires a good log, called a peeler, generally straighter and larger in
diameter than that required for processing by a sawmill. The log is peeled into sheets of
veneer which are then cut to the desired dimensions, dried, patched and glued together to
form the plywood panel. The panel can then be patched, resized, sanded or otherwise
refinished, depending on the market it was intended to be sold in.
The most common varieties of softwood plywood comes in three, five or seven plies with
dimensions of 1.2 m × 2.4 m (4 feet × 8 feet). Each ply is 1/8 inch. Roofing can use the
thinnest 3/8-inch plywood. Floorboards are at least 5/8-inch depending on the distance
between floor joists. Plywood is often tongue and grooved for flooring applications. Two
of the edges will have "grooves" notched into them to fit with the adjacent "tongue" that
protrudes from the next board A common reason for using plywood instead of plain wood
is because plywood is more stable and because it is less prone to change (shrink, twist or
warp).
23
History
Plywood has been made for thousands of years; the earliest known occurrence of
plywood was in ancient Egypt around 3500 BC when wooden articles were made from
sawn veneers glued together crosswise. This was originally done due to a shortage of fine
wood; thin sheets of high-quality wood were glued over a substrate of lower-quality
wood for cosmetic effect, with the structural benefits arising only incidentally. This
manner of inventing plywood has occurred repeatedly throughout history; for example,
many of the great English furniture makers such as Sheridan used veneer as a raw
material.
Modern plywood in which the veneer is cut on a rotary lathe from softwood logs is of
relatively recent origin, invented by Emmanuel Nobel (the father of the more-famous
Alfred Nobel). The first such lathes were set up in the United States in the mid 19th
century. Plywood has been one of the most ubiquitous building products for decades.
Sources
Plywood is made by gluing together a number of thin veneers or plies of softwood or
hardwood.
Advantages
There is always an odd number of veneers and each ply is at a right angle to the one
below, this gives the material it's strength. The more veneers used, the stronger the
plywood becomes. Both the type of glue and veneers determine the suitability of a sheet
for a particular application. The finish quality of plywood varies considerably, some
plywood have attractive grains while others can contain knots. Plywood may be used
inside and outside. Plywood is graded for exterior or interior use depending upon the
water resistance of the glue used to stick the plies together. Code letters shows this
grading on each sheet. Exterior grade plywood (WBP - Weather and Boil Proof). This
type of plywood can be used outside. Water-resistant adhesives are used and can resist a
certain amount of moisture.
24
Uses
Sheds and cladding are made from this material.
Weather boiled proof plywood requires paint or varnish to protect the outer veneer from
the elements.
Internal plywood does not contain water-resistant adhesive. The code used to represent
this plywood is (interior use only).
It may be used for wall paneling, flooring and furniture.
Shuttering boxes are made from shuttering plywood. Shuttering boxes are used in the
construction industry to contain concrete while it sets. The material is water resistant to a
certain extent. The surface of this material does not have a decorative veneer and is
generally not suitable for use where an attractive quality finish is required.
Marine Plywood is made with waterproof adhesive so that it can be used under water.
The material should still be protected with paint or varnish.
Other codes used on the surface of plywood are: BR: -Boil Resistant, MR: -Moisture
Resistant.
The smoothness of the surface and the number of defects in it grade plywood. Plywood
can be nailed and screwed. Thin plywood is flexible and can be formed into curved
shapes.
25
1.9 Wood Based Products
Plywood forms the major segment of the wood based industry in the country. A large
number of units are operating in the large, medium and small-scale sectors.
Plywood, Veneers of all types and other wood based products such as particle board,
medium density fiber board have been relicensed vide Department of Industrial Policy &
Promotions Press Note No.11 (1997 Series) dated the 17th July 1997. In terms of Press
Note No. 9 (1998 Series) dated 27.8.98, issued by the Ministry of Industry, Department
of Industrial Policy & Promotion, entrepreneurs who wish to obtain approval from the
Government for setting up any wood based project should obtain prior clearance from the
Ministry of Environment & Forests before submitting the applications to the
Administrative Ministry/SIA and enclose a copy of “in principle approval given by the
Ministry of Environment & Forests. However as per notification dated 27.01.2007 most
of the wood items have been dereserved except wood furniture and fixtures.
As per the current Export & Import Policy, the principal raw material, viz., wood logs is
freely importable under OGL.The total production of Plywood during 2005-2006 was
58,17,131 Sq. Meters and production during 2006-07 (up to December) was 36,76,264
Sq.metres. The production of Particle Board during 2005- 06 was 33,93,029Sq.Mtrs. and
production during 2006-07 (up to December) was 27,98,517 Sq. meters. The export and
import of plywood during 2005-06 was Rs.160.80 crore and Rs.87.75 crore respectively.
The export & import of Particle Board during 2005-06 was Rs. 21.81 crores and
Rs.117.87 crore, respectively.
26
History
1962: Indian Plywood Manufacturers’ Research Association (IPMRA) was formed as a
co-operative research laboratory under the umbrella of Council of Scientific and
Industrial Research (CSIR) for undertaking applied research on PLYWOOD, an
important wood based panel material.
1970 : The Institute was re-designated as Indian Plywood Industries Research Institute
(IPIRI)
1978 : Administrative control was transferred to the Ministry of Industry, Govt. of India
so as to bring it under user Ministry
1988: Realizing the need for trained manpower for wood based panel industries, training
facilities in Mechanical Wood Industries Technology were established with the assistance
of Food and Agriculture Organization (FAO)/United Nations Development Programmed
(UNDP)/Government of India (GOI).
1990: As recognition to the greater role of the Institute in conservation of natural
resource, the administrative control was transferred to the Ministry of Environment and
Forests, Govt. of India.
1992 : As a reflection to its premier position in training for Mechanical Wood Industries
Technology as a centre of excellence, the name of the Institute was changed to Indian
Plywood Industries Research and Training Institute (IPIRTI)
IPIRTI (Indian plywood industry research and training institute)
Vision
IPIRTI’s vision is to become an apex institution of international repute by equipping
itself with concurrent state-of-the art technology and develop in-house frontline expertise
to be able to carry out necessary R & D towards advising and/or providing competitive
consultancy to the academia as well as wood & other lignocelluloses based panel industry
sector regarding the conservation of natural forests through development and adoption of
efficient technologies in the field of wood and panel products from renewable fibers
including plantation timbers and bamboo while meeting the vital needs of the developing
society.
27
Mandate
The mandate of the Institute includes:
Research on all aspects of production of sawn timber, manufacturing plywood and other
allied engineered and reconstituted wood and lignocelluloses products, including
improvement of materials, manufacturing processes, machines and appliances, time and
motion studies – conditions of work standards in factories.
Training in connection with forest product utilization for plywood industry and trade and
allied industries. Imparting technical education and/or training at undergraduate,
postgraduate, and/or any other level in technology of agro and forests products, adhesives
and laminates, and/or synthetic finishing, manufacturing machinery.
Inspection, Testing and Certification of all forest products viz. plywood, wood, timber,
hardboard, particleboard, chipboard, furniture, glue-lam, compreg, doors, panel doors,
block board, flush doors, veneered panels, veneers, laminated panels, composite boards,
and the products of allied trade and industry.
Extension includes transfer of technology for commercialization, entrepreneur
development, information dissemination through research / technical reports, quarterly
newsletter, participation in exhibition, seminars, conferences, workshop, and Scientists
visit to the industry to assist in process and product development.
Organization
The need for a Research and Development infrastructure for wood and wood based panel
industries in the country was recognized in early sixties. This was all the more necessary
for a developing country, like India, with abundant natural forest resources, to pursue the
chosen path for management of natural resources consistent with the overall strategy for
national development. The Indian Plywood Manufacturers’ Research Association
(IPMRA) was formed in 1962 as a cooperative research laboratory under the umbrella of
Council of Scientific and Industrial Research (CSIR) for undertaking applied research on
PLYWOOD, an important wood based panel material.
28
The Institute was re-designated as Indian Plywood Industries Research Institute in 1970
and its administrative control was transferred to the Ministry of Industry in 1978.
Realizing the need for trained manpower for wood based panel industries, training
facilities in Mechanical Wood Industries Technology were established during 1988 with
the assistance of Food and Agriculture Organization (FAO)/United Nations Development
Programmed (UNDP)/Government of India (GOI).
As recognition to the greater role of the Institute in conservation of natural resource, the
administrative control was transferred to the MoEF in 1990. As a reflection to its premier
position in training for Mechanical Wood Industries Technology as a centre of
excellence, the name of the Institute was changed to Indian Plywood Industries Research
and Training Institute in 1992.
1.10 IMPORTANT INVOLVEMENT AND ACTIVITIES OF FEDERATION SINCE ITS
INCEPTION
National Activities
A proposal made by the Federation in the year 1963 to the Ministry of Commerce,
Government of India that a small delegation of the plywood Industry should visit a few
countries outside to do an on-the-spot study of the foreign markets which was accepted
by the Ministry of Commerce with a grant of Rs.10,000/- out of the Plywood Industry
Voluntary Cess Fund to meet partially the expenditure of delegation tour. After that an
Indian Plywood Delegation of five members headed by the then President of FIPPI Late
Shri A.K. Kaderkutty visited to West Asia, East Africa, and UK in 1963 to explore the
possibilities of export of Plywood to these countries and secured export orders for a total
value of Rs.6,62,345/- in spite of a competitive price which was executed in due course.
Federation was active member of the Plywood Industry Voluntary Cess Committee
constituted by the Ministry of Commerce & Industry.
As a part of export promotion drive the Federation approached the Ministry of Commerce
for a Grant-in-aid allocation for producing a brochure on the Indian Plywood for
29
distribution in foreign markets. The Government of India sanctioned a grant of
Rs.21,000/- from the Marketing Development Fund
In the year 1968 with a great initiative of members the Federation issued first quarterly
journal entitled “Indian Wood Panels” during April 1968 and continued up to April 1969
after that due to unavoidable circumstances plywood journal ceased.
Federation had a good relation with DGTD (Timber Directorate) of the Ministry of
Industry, Government of India, who had taken active interest in the various activities of
Wood based Industry and the Federation.
Federation has good liaison activities with the Ministry of Environment & Forests.
Ministry of Commerce & Industry, Ministry of Finance and other related Ministries
Due to Federations initiative the Government of India banned export of rose wood
logs.As a result of the efforts of the Federation the Excise Duty was reduced to 16% on
all Wood based Products and Import duty on logs was reduced to 5%.
With great efforts of the Federation the Wood based Industry has been transferred from
Schedule-IV to Schedule-I. With efforts of the Federation the Government permitted the
import of logs from 1985 to conserve the indigenous valuable forest resource on a
nominal duty of 10% which is reduced to 5%
In view of shortage of Formaldehyde resins on request and initiative of the Federation of
Indian Plywood & Panel Industry the Ministry of Commerce, Government of India had
included “Methanol” in the shopping list of Plywood exporters vide Public Notice NO:
196-ITC/(PN)73 dated 19.11.1973 issued by the Chief Controller of Import & Exports to
enable exporters of Plywood to import Methanol through STC (State Trading
Corporation) against Advance/REP Release order and get “Mathanol” converted to
Formaldehyde and/or resin an adhesive for Plywood manufacturing units with effort of
Federation the Members took active role in plywood export through STC.
The Federation took up space at NBO Display Centre and arranged the display of Timber
products which was highly appreciated by the Minister of Works Housing & Urban
Development and at the request of the Federation’s Secretary on 13th
March 1969
Professor Barge Steenberg Director of the Forestry and Forest Industry Division of FAO
30
paid a visit to the Timber Product section in the display section of the NBO who
appreciated the Indian finished timber products.
Federation also had participated in 3rd
Asian International Trade Fair (Asia 72) held at
PragatiMaidan, New Delhi in collaboration with CAPEXIL during 1972.
During the year 1997 and 1978 a study report sponsored by the Federation of Indian
Plywood & Panel Industry on the availability of wood Raw-Material timber for plywood
Industry in the two regions Kerala, Karntaka and North Eastern was presented by the
Kerala Forest Research Institute, Peechi Kerala State.
The Development Panel was constituted in 1984 by the Ministry of Industry to review the
status of Wood based Industry in India and also constituted various sub-committee under
the Development Panel like Raw-Material Sub-Committee Plywood Sub-committee
Particleboard Sub-committee etc.
Federation of Indian Plywood & Panel Industry was a Co-sponsor in the National
Conference on Standardization and Quality Up gradation of Lignocelluloses Panel
Products which Bureau of Indian Standards Organized in New Delhi on 29-30 December
1992.
Federation of Indian Plywood & Panel Industry along with Indian Institute of Forest
Management Bhopal organized a National Seminar on Raw Material supply to Paper and
Lignocelluloses Panel Products Industry: Captive Plantation on 22nd
and 23rd
March
1993. Follow up meeting held on 21st April 1993 where the then President Mr. M.M.
Jalan presented important informative papers in the said Seminar.
A Development Council for Plywood and other Panel products constituted on 19/11/1993
by the Ministry of Industry and continued up to 19th
November 1995 to develop the
Wood based Industry in various field.
Federation was active member of these Development Panel and Development Council
and always provided all assistance and information as required from time to time for
making report on Wood based Industry.
Federation always helps to the extent possible to all Foreign delegation when they visit
India and provides them statistical and other information on the Wood based Industry in
India.
31
Members of the Federation had good export performance of their finished products and
Export of Plywood started picking up in a big way in the year 1993 to European, Middle
East and Asian countries.
Federation makes representation to the Government Departments as and when necessary
and also leads personal delegations to the Ministers concerned and to the Departmental
officers. Federation is trying to bring the Furniture manufacturers, Laminates,
Woodworking Machinery in India under the umbrella of Federation so that they too get
proper representation.
The Federation on behalf of the Wood based Industry offers its wholehearted cooperation
to the Government in implementing their plans of a forestation and regeneration
particularly of those species of Timber which are needed for the production of timber
sheet material where some of the Federation’s prominent members are already engaged in
vast captive timber plantation programmed to meet the shortage of raw-material timber
for wood based industry. Due to shortage of timber and availability of Bamboo in India
the Planning Commission, Government of India, Bamboo Mission, various research
institutes are encouraging Plywood Industry to adopt Bamboo as raw material in place of
Wood because Bamboo has got some properties as wood. FIPPI supports this
encouragement and some prominent members of Federation from North Eastern Region
have already taken initiative to produce Bamboo and Wood combine products.
The Federation disseminates various technical knowledge to its members by keeping in
touch with the progress and improvement which are being introduced by the producers in
other developed countries like Finland, Japan, Canada, UK, USA, China etc. through
circular regularly.
The Federation presently has taken active part with Government of India in reviving
Plywood industry production activities in North Eastern region which was ceased
operation due to Humble Supreme Court Order on 12/12/1996 to ban tree felling and
production of all wood products in North Eastern region.
32
International Activities
The Ministry of Food & Agriculture, Government of India nominated the President of
FIPPI as India’s representative for the FAO Committee on Wood based Panel products.
The first session of this committee was held in Rome from 12th
to 14th
December 1966
where the then President of FIPPI Mr. P.D. Chitlangia, Managing Director of Sarda
Plywood Industries Limited attended. Simultaneously nominated the President of FIPPI
up to 6th
Session of FAO Committee on Wood based Panel Products in 1980.
The Federation also organized a plywood Exhibition in Delhi at NBO (National Building
Organization) at new Assembly Hall on the occasion of the IXth Commonwealth Forestry
Conference from the 16th
to 25th
January 1968.
Federation’s representative participated many times in an ILO Tripartite Technical
Meeting on Woodworking Industry in Geneva as an Employees delegate nominated by
the All India Organization of Industrial Employees.
FIPPI was one of the active members of the Indian organizing committee for the 3rd
World consultation on Wood based Panels held in India from 6th
to 16th
February 1975
and whole heartedly participated the World consultation in collaboration with members
which was organized by FAO and the Government of India acting as host organized the
World Consultation on Wood based panels.
On a request of the Government of India to FAO in 1979 for financing within the FAO
Technical co-operation Programmed a project to assist in modernizing the Indian
Plywood & Panel Industry which was approved by FAO in 1979 and the FAO team
leader of the Project took up his position in the mid March 1980. The project was signed
by the then Inspector General of Forests and the implementation of the project was given
to the FIPPI, which maintains its office in New Delhi.
The FAO/UNDP Technical consultation on Wood Based panels held in New Delhi from
13-17 January 1983, the FIPPI was one of the members of organizing committee for the
Technical consultation and participated the consultation along with other members.
33
FIPPI was one of member organizer of 8th
Asian Plywood Manufacturers Conference
held on 17th
– 20th
October 1983 in Manila, Phillipines.
Off and on visitors from foreign countries come to Federation office and discuss on
various subjects on Wood based Industry and collect important statistical information on
the present status of Wood based Industry in India.
A high level Malaysian Business Delegation visited India during October 2002 where
they met FIPPI’s members at Hotel Le Meredien and discussed on various subjects like
Furniture, Laminates, Import-Export, Technology transfer, Marketing etc.
Recently Federation had got from FAO an Invitation to the Expert Consultation on Trade
and Sustainable Forest Management Impacts and Interactions to be held from 3-5
February 2003.
On various representation from Federation against the Plant Quarantine (Regulation of
Import into India, Order 2003-Restriction on import of logs) the Government of India,
Ministry of Agriculture has to amend the following:-
1. Reduce the restriction on import of timber logs.
2. Increase the list of timber species for importing
3. Delete the finished timber products like Plywood/Veneer from the import restriction
list.
Considering past activities of the Federation it is striving for a better future and to remain
competitive in the International market the Federation has taken the initiative with the
cooperation of all concerned in the Wood Panel Industry for organizing an International
Seminar & Exhibition on Plywood, Panel Products, Furniture, Laminates, Bamboo and
Woodworking Machinery and have successfully organized “PANELEXPO 2003” held
in New Delhi from 4th
to 7th
September 2003 and “PANELEXPO 2005” which was held
from 6th
to 9th
April 2005 at PragatiMaidan, New Delhi India in co-sponsorship of
International Tropical Timber Organization, (ITTO),Planning Commission, International
Network for Bamboo & Rattan (INBAR) Ministry of Commerce & Industry, Indian
Council of Forestry Research and Education (FRI Dehradun), Bureau of Indian
Standards, New Delhi, Indian Plywood Industries Research & Training Institute (IPIRTI
Bangalore), CAPEXIL and National Mission on Bamboo Application, New Delhi. After
34
resounding grand success of Panelexpo 2003 & 2005 the 3rd edition of Panelexpo 2007
an exclusive International Exhibition and Seminar focusing on the emerging trends and
opportunities in the Plywood, Panel, Furniture, Laminates, Bamboo and other Allied
Products will be held in April 2007.
Main Subjects handled by the Federation are:
Supply and prices of raw material viz. timber and resins
Excise & Customs duties and other Government levies
Import of machinery and spare part
Delegation and various communication related to Woodbased industry to foreign
countries
Export promotion and other matters relating to the smooth running of the Woodbased
industry and its development.
Federation encourages members for Captive tree plantation to meet the gap of raw
material timber demand and supply for individual unit as a result many members come
forward with full fledge plantation programme and attend Seminar and Conference,
which we intimate to members, to promote captive Tree Plantation.
Federation's Membership with other Organizations
The Federation is a member of the following Organizations & Committees:
Federation of Indian Chambers of Commerce & Industry, New Delhi
Bureau of Indian Standards, New Delhi
FAO Advisory Committee on Paper and Wood Products
Indian Plywood Industries Research & Training Institute
Working Group on Forestry for the Tenth Five Year Plan (2002-2007) constituted by the
Planning Commission in November 2000
Committee on Marketing and Trade of Bamboo constituted by the Planning Commission
in April 2002.
Member of CAPEXIL - Export Promotion Council
National Technology Mission for Bamboo Development
35
1.11 FEATURES OF INDUSTRY
1. Presence of well-known brands: A large no. of well knownbrands is present in the Indian
market. Thus making the market highly potential for customers.
2. In recent years, organized sector has increased its share in the market Vis a Vis the
unorganized sector.
3.Abundant Availability of Man Power: India produces over 500 PhDs, 200,000 engineers,
300,000 non-engineering postgraduates and 2,100,000 other graduates each year.
4.Competitive Labour Costs: India’s cost of skilled labour is among the lowest in the world.
For example, average labour rate per employee in the plywood sector is about $3,000 per year.
Labour cost as a percentage of value added is only 21 per cent in India as compared to 23 per
cent in China and 30 per cent in Taiwan.
5. Abundant Availability of Raw Material: India has large area that covers by the forestry and
plywood industry easily getting raw material easily.
6. Importing Raw material: Government permission in importing wood as raw material
prevents the Indian forest and plywood industry.
36
37
2.1 COMPANY PROFILE
Centuryply has been the front-runner in applying innovation at work. This simple
philosophy has been the cornerstone of all our processes and technologies. It has led us to
design and deliver contemporary lifestyle statements that have become synonymous with
modern living. Our award winning products have been redefining Indian realty and
bringing about a paradigm shift in the concept of living spaces. Century Plyboards (I)
Ltd. (CPIL), our mother concern, came into existence in 1986 as a result of the
foresightedness of two visionaries, Mr. SajjanBhajanka and Mr. Sanjay Agarwal. Since
then, the company has taken giant strides and is today, the largest seller of multi-use
plywood and decorative veneers in the Indian organized plywood market.
As the pioneers in Borer Proof Plywood and Boiling Water Resistant (BWR) Decorative
Veneers and Laminates in India, the company has successfully created a niche in the
highly competitive lifestyle segment. By giving more freedom to our users, we ensure
they have more choices available that will help them in achieving what they desire. We
are continuously working on new product concepts for today's informed and discerning
buyer – offering maximum choice to try out numerous permutations and combinations.
Centuryply is the unprecedented choice of architects and interior designers – they
strongly recommend our products for transforming ordinary steel and concrete structures
to expressions of one's personality. From flexible plywoods that offer a unique blend of
form and functionality to specially treated, Fire Retardant plywoods that find use in a
myriad of construction purposes, we have the right products to target different building
needs. Now in its 26th year of operations, Centuryply enjoys a unique brand identity as
the market leader, with offerings that are considered industry benchmarks. We are guided
by a simple philosophy of adding more value-for-money products and at the same time,
improving upon our existing product portfolio through extensive research and customer
feedback.
38
Centuryply has also had a successful run at the box office by associating itself with
meaningful cinema and we seek to strengthen this association over the coming years. As
an aspirational, premium lifestyle brand, we believe in perseverance, will power and
determination. We constantly communicate our identity amongst a larger audience
through the medium of the moving arts. Centuryply has collaborated with movies that
show the undying human spirit, its indomitable willpower and propagate noble causes
like Right to Education. By doing so, we bring forth Centuryply relentless pursuit of
excellence and the will to succeed against all odds. Notable social welfare initiatives like
“Education for all” seeks to educate children of our factory workers as well as adjacent
areas, absolutely free of cost.
PRODUCTS
PLYWOOD
When it comes to plywood, Centuryply is by-far, the undisputed leader with a plethora of
award winning as well as innovative products designed around you, the global Indian.
The signature plywood products are used extensively in commercial and domestic
settings. Century...
39
DECORATIVE LAMINATES
Centuryply uses a unique technology in which special resins impart extra strength to its
laminates, making them highly resistant to scratch and abrasion. Centuryply's exotic
range of decorative laminates is characterized by higher color...
DECORATIVE VENEERS
Centuryply always believes in providing more value for money. The decorative veneers
from the house of Century are one-of-its-kind products, manufactured by pre-pressing – a
breakthrough technology which helps in uniform distribution of moisture throughout the
ply. Thus..
40
MDF & PRELAM
Centuryply offers world-class Medium Density Fiberboards (MDF) and Pre-Laminated
particle boards (PRELAM) which can transform your home and office, giving your setup
different looks altogether. Our premium quality MDF and PRELAM boards meets E1
Formaldehyde Emission...
NESTA
Nesta Furniture aims to provide authentic, stylish and exclusive furniture and home decor
accessories at affordable prices to the Indian customers, thereby, partnering them in creating
their dream homes, which is a true reflection of their achievement…
41
Milestone
The first ISO 9002 company in India for Veneer and Plywood.
In 1997, CPIL became the first company to introduce Borer-Proof plywood in India.
Pioneers in Boiling Water Resistant (BWR) Decorative Veneer, seven-year, Powder-
proof PF Plywood and the revolutionary, Non-leachable Firesafe plywood
In 2004, Centuryply laminate plant commenced operations. "Centuryply Laminates,
today known as Century Laminates, hit the market like a bullet, instantly being catapulted
to the top, thanks to unmatched quality and Centuryply's brand equity; also regarded as
the "best quality laminates"
March 26th, 2005 was a momentous day in Centuryply's glorious history as the then
Hon'ble Chief Minister of West Bengal, Sri BuddhadebBhattacharjee inaugurated the
Pre-lam Particle Board Plant. enturyply became a full-fledged plywood and veneer
manufacturing brand with the addition of High-pressure Laminates, Pre-laminated
Particle Boards and MDF
Today, we are a one-point manufacturing unit of all kinds of plywoods and plywood
related products, offering International quality and highest Return-on-Investment to every
stakeholder. Our success is reflected by a consistent, year-on-year growth rate, with
"Construction World", one of the most definitive business journals, adjudging us as, "the
Fastest Growing Company with the Highest Turnover", five times in a row for the years
2003, 2005, 2006, 2007 and 2008
Mission
To provide utmost satisfaction to the consumer through best quality and customer care
To continuously upgrade the product through innovations and convergence of new
technology and to produce the best quality at the lowest cost
To safeguard and enhance shareholder value
To respect the dignity of all employees and together to become instrumental in the
development of the country while protecting the environment
To utilise the surpluses for the welfare of employees and the society at large
42
Vision
Continue to remain the best Plywood-Panel Corporation in India with growth in allied
areas
Process
Century Plyboards ISO 9002 plant is located at Bishnupur near Joka, Kolkata. The 6.6
acre production complex annually rolls out high grade ply, mainly from imported timber
and logs.
The production facilities include a range of state-of-the-art equipment for cutting,
shaving, splicing, polishing and chemical treatment as well as for research and
development. Commercial, Marine, Concrete Shuttering and Decorative Plywood are all
produced at the plant.
Automatically controlled jet drying and dampening.
Adhesive preparation :
Phenol formaldehyde (PF) resins for marine plywood.
Non leachable organs - phoshp preservatives for complete protection.
Pesticides and technology from DOW AGRO SCIENCE LTD. Indeaiapolis, USA.
Even application of adhesive.
Imported Prime logs e.g. Garjan and Keruing constant moisturisation to prevent
deterioration.Cleaning and cutting of logs.Accurate peeling to produce face and core
veneer.Telescopic Spindles and a back up roll mechanism.Pneumatic clipping and edge
repair.Stock and grading.
43
Identity stripe embedding :
Pre pressing with cold press.
Pre-pressing for complete chemical penetration.Computer controlled hot pressing.
Thermic fluid watingsystem.Hot stacking for even celling :
Reduces temperature gradients.
Prevents warping.
Aids post-press curing of the adhesive.
Exports
Century Plyboards is a key player in plywood and laminate industry in India.
Besides, we export our range of premium products to over 20 countries. Our laminate
range- Century Mica is widely acclaimed by our global customers as a quality product.
Centuryply's range of products is manufactured meeting stringent international quality
standars.
Our continuous commitment towards high quality has earned us the coveted ISO 9000:
2000 and ISO 14001: 1996 certifications.
The Government of India has conferred upon our company the status of Export House in
recognition of our achievement in the sphere of international trade and commerce.
Take a look at the map below. These are the countries where you'll find out products:
44
CENTURY PLY EXPORTS AROUND THE WORLD
45
2.2 COMPANYPROFILE
With a strong retail network, 40 branches across India and presence in over 300 cities
across 19 states, Greenply Industries Limited is committed to provide international
quality products to its customers.
Greenply Industries Limited (GIL) is India’s largest interior infrastructure company with
a whopping turnover of Rs. 1642.27 crore followed by a jump of 35.05% during the last
fiscal. We stand at top when it comes to plywood, decorative veneers and particle boards.
We account for almost 36 percent of the organized plywood and 26 percent of the
organized laminate market in India.
Our continuous efforts towards achieving excellence helped us gain a significant position
in the thriving Indian economy. We are a partner of choice for a large number of office
and home builders. Greenply markets the most comprehensive portfolio of residential and
commercial floor products available - plywood & block boards, decorative laminates,
decorative veneers, and MDF under the brand names of Greenply Plywood, Green Club
Premium Ply, Greenlam Laminates, Green Decowood and Ecotec.
With a strong retail network, 40 branches across India and presence in over 300 cities
across 19 states, Greenply Industries Limited is committed to provide international
quality products to its customers through more than 13,000 distributors, dealers, sub-
dealer and retailers. The company has six state of the art manufacturing facilities across
the country manufacturing products of global standards.
Greenlam, the flagship decorative laminate brand from Greenply is exported to more than
70 countries including Thailand, Indonesia, Taiwan, Canada, Bahrain, Hong Kong,
Malaysia, Singapore, Kenya, Dubai, Russia, USA, Australia, Mexico, Saudi Arabia,
China and Europe. Our esteemed clients trust us by unfolding their vision to us, and we
bestow the trust reclined in us by converting their dreams into reality. So, if you’re
looking for an exquisite range of interior infrastructure products, make sure to give us a
call.
46
Products
Greenply Industries Ltd. is a leader in the manufacturing and marketing of a wide range
of interior infrastructure products. Backed by our expertise in supplying high-quality
products, we provide both surface finish and foundation/structural products for homes,
offices and retail establishments.
Our extensive experience in interior infrastructure projects and overwhelming growth in
real estate sector such as residential, commercial and retail has enabled us to gain a
competitive advantage in the market.
Our offerings include:
Decorative Laminates: Wide range of laminates to meet modern infrastructure needs.
Decorative Veneers: An exquisite range of decorative veneers that bring you the world's
most striking timbers.
Plywood & Block Board: High quality products for furniture partitions, paneling, cavity
flooring, paneled floors, hoardings, false ceilings and other exterior-and semi-exterior
applications.
Medium Density Fibreboard: The most adaptable, eco-friendly, engineered panels
available today, are made from wood which is refined into fibres and then reconstituted
with a resin binder at elevated temperatures to form panels finished into fibers and
reconstructed with a resin binder bearing high temperatures.
Restroom Cubicles: Long-lasting cubicles that are not only easy to maintain but comes
with unprecedented 10 years warranty.
These products are manufactured in such as a way to deliver the required quality out of
your interior infrastructure project. Moreover, our products are well-suited for homes,
offices, and retail establishments.
47
Vision
Make every house full of colours and life
Help India gain a significant position globally
Transform every house to a home
Mission
To ensure on time delivery of high quality products
Help India gain a significant position globally
Create a cordial atmosphere within the organization\
Implement environmentally and socially considerate decisions for our company and
community
Milestones
Greenlam Laminates become the First Non US brand to get Greenguard certification
from GreenguardEvironmental Institute (GEI) US for indoor air quality
1993- Set up of the plant for the manufacturing of laminates at Behror, Rajasthan with a
capacity of 12 lacs sheets per annum under the name "Mittal Laminates Private Limited".
1995 The equity shares of our Company were listed pursuant to an offer for sale.
1995 Amalgamation of the erstwhile Greenply Industries Limited with our Company
with effect from April 1, 1994 pursuant to which the plywood manufacturing unit at Tizit,
Nagaland was transferred to our Company. Pursuant to the amalgamation, the name of
our Company was changed to "Greenply Industries Limited".
1998 Commenced manufacture of pre-laminated particle board at our unit at Behror,
Rajasthan.
2002 Grant of ISO 9001 Certification for the Quality Management Systems for the
Behror unit and ISO 14001 Certification for the Environmental Management Systems for
the Behror unit.
2003 Grant of OHSAS 18001 Certification for the "Occupational Health and Safety
Management System" for our Behror unit.
2003 Commenced manufacture of decorative veneers at our unit at Behror, Rajasthan.
48
2005 Received certificate for being a “Two-Star Export House” from the Director
General, Foreign Trade, Government of India.
2005 Amalgamation of Worthy Plywood Limited with our Company pursuant to which
the plywood manufacturing unit at Kriparampur, West Bengal was transferred to our
Company.
2005-06 First company to attract FII investment in its sector.
2006 Acquisition of Greenlam Asia Pacific Pte. Limited, Singapore as a wholly owned
subsidiary with the object of marketing our Company’s laminates in the south east Asian
markets.
2006 Setting up of unit at Pantnagar, Uttarakhand for the manufacture of plywood and
particle boards.
2007 Acquisition of Galaxy Decor Private Limited and Platinum Veneers Private Limited
as wholly owned subsidiaries which owned the plywood manufacturing facility at
Bamanbore, Gujarat.
2008 Received GREENGUARD Certification for our Greenlam Laminates.
2008 Incorporated Greenlam America, Inc. as a wholly owned subsidiary in the state of
Florida with the object of marketing our Company’s high pressure laminates in North
America.
2008 Green Defender (Fire Retardant Plywood) certified by the Central Building
Research Institute (CBRI).
2009 Amalgamation of Galaxy Decor Private Limited and Platinum Veneers Private
Limited with our Company
2010 Power brand Status
2010 Setting up of India's largest and most technologically advanced MDF plant at
Pantnagar, Uttarakhand.
2010 FSC certification for Pantnagar and Kriparampur plants awarded by the prestigious
Rainforest Alliance Smartwood Program.
2010 ISO 9001, ISO 14001 and OHSAS 18001 certifications for Pantnagar, and
Kriparampur Units.
2010 Social Accountability (SA) Certificate SA8000 for our Kriparampur unit.
2010 ISO 9001 certification for Rajkot Unit.
Winner in the Inc. India 500 Awards for India’s best performing enterprises.
49
Quality Certifications
50
Our Factories
Tizit, Nagaland
This manufacturing facility produces plywood and block board. The nearby timber areas
of Nagaland help us get abundant supply of raw material.
Kriparampur, West Bengal
Its proximity to the Kolkata Port enables smooth international access. This facility
produces plywood and allied products.
Behror, Rajasthan
This facility is close to the emerging markets in the North and West of India and
manufactures decorative laminates, decorative veneers and other allied products.
Pantnagar, Uttarakhand
This manufacturing facility manufactures plywood & block boards, decorative veneers,
flush doors, particle boards and Medium Density Fibre boards (MDF). With its proximity
to the region’s vast agro-forestry resources, it caters to the growing North Indian market.
Rajkot, Gujarat
This facility produces plywood and allied products in order to serve market in the western
parts of India.
Nalagarh, Himachal Pradesh
This is our latest setup and manufactures laminates and allied products
51
2.3 COMPANY PROFILE
Kitply Industries Limited is India's foremost manufacturer of Plywood and Blockboard.
Kitply’s operations are spread throughout the country with 5 modern factories and 30
sales offices. It has a workforce of about 10,000 persons and a countrywide distribution
network of over 1,000 dealers.
Since its inception in 1982, the company has been a trendsetter and important benchmark
for the plywood and blockboard industry in respect of its production processes. Its
commitment to environment-friendliness, its high ethical standards in business dealings
and its on-going efforts in community welfare programmes have won it acclaim as a
responsible corporate citizen.
Kitply has made significant contributions to the nation building process by way of quality
products, services and sharing its expertise.
Kitply’s brand name is synonymous with plywood and enjoys a high level of equity in
the Indian market. The company's products occupy an enviable position in the Indian
marketplace and have multifarious applications - Ranging from household to buildings to
construction.
It is the only plywood company that figures in the list of Consumer SuperBrands of India.
Kitply has also extended its services overseas to the Middle East, Nepal Bangladesh and
Pakistan.
Kitply has included commitment to environmental protection as one of its corporate
objectives with the Kitply Agro Forestry Project.
Kitply demonstrates the practices of being a good corporate citizen undertaking a wide
range of activities to improve the living conditions of the under-privileged classes living
near its factories.
52
PRODUCTS
Ply wood
Plywood is probably the most popular and versatile man-made woodworking material
available in home centers today. Plywood is strong and flexible, and good for building
furniture and cabinetry, and many other undertakings.
Plywood is a laminated product made up of numerous thin strips of wood laid in
alternating directions and bonded with glue into strong, stable sheets. Because of this
construction method, plywood is less susceptible to expansion and shrinkage.Because of
the way in which plywood is constructed, it also resists cracking, bending, warping, and
shrinkage, depending upon its thickness.Plywood is treated in many different ways
depending upon its intended application.Precisely at Kitply, we create a range of
Plywood, giving the consumer the choice to choose from a variety of Plywood.
Block board
Blockboard is made up of a core of softwood strips. These strips may be up to about
25mm wide. The strips are placed edge to edge and sandwiched between veneers of
hardwood. The sandwich is then glued under high pressure.This process makes it very
strong. Hence Blockboard are used where strength of the furniture is of the most
important. Blockboards are used to make:long tables, shelves, doors, paneling and
partitions
53
Decorative Laminates:
An easy way to give a distinctive and elegant look to your home and office is by simply
using a Decorative Laminates on any wooden furniture surface.Decorative Laminates
make your home colorful, interesting and can make every room and piece of furniture
look distinctive.
KitVista – the decorative laminates brand from the house of Kitply, offers a wide variety,
texture of Decorative Laminates and has a range of colors to choose from.
Decorative Laminates are high pressure laminates comprise of specially selected
decorative papers and absorbent kraft paper impregnated with melamine and phenolic
resins, pressed and hardened under heat and high pressure. The process ensures strong
bonding, resistance to boiling water and stains and increases dimensional stability
Surface protection through special treatment makes Kitply laminates scratch resistant.
Decorative Laminates are suitable for a wide range of applications such as home
furniture, wall linings, column claddings, doors, shelves, table tops, work-tops, counters,
vanity units, cubicles, lift linings, store fittings, displays, check out desks, office
partitions, storage units, etc.
Vision
Kitply Industries Limited aims to leverage its expertise to become the top plywood
companies in the world.
We aim to bring innovative and quality products to our consumers through active
research and development.
The company intends to be completely self-reliant in timber procurement by way of
Agro-forestry and hence, build long term value for the society at large.
54
Awards
Kitply has bagged Top Export awards from Capexil for the periods 91-92, 93-94, 94-95
&95-96.
Kitply has won the prestigious Indira PriyadarshiniVrikshamitra Award.
This highest national award recognizes our outstanding contribution
in the field of afforestation and waste land development
55
2.4 COMPANYPROFILE
Archidply Industries Limited is the flagship company of the Archidply group. The
Archidply Group has been associated with plywood manufacturing for more than 30
years. The Group has grown from a small saw mill in Assam to a modern state-of-the-art
manufacturer of wood panel products and decorative surfacing products in three
locations, Rudrapur, Mysore and Assam, with a network of branches, distributors and
dealers across India.
Since our inception, we are dedicated to constantly expanding and updating our product
range in order to stay ahead of the market. Our Company offers comprehensive
engineered interior products which include
1. Plywoods - Marine Plywood, Fire Retardant Plywood, Shuttering Plywood,
Densified Film Faced Plywood, BWR & MR Plywood, Lamyply and
Lamyboard.
2. Block Board and Flush Doors - BWR & MR grade
3. Particle Boards - plain, veneered and pre laminated particle board both in
interior and exterior grade
4. Decorative Laminates - range from 0.8mm to 1.5mm and post form laminates
5. Decorative Veneers - Teak, natural exotic veneers, reconstituted veneers,
engineering Veneers and dyed veneers.
All the products are manufactured by Our Company in integrated multi-product modern
facilities strategically located in two different geographical zones namely Mysore,
Karnataka in south of India and Rudrapur, Uttarakhand in the northern part of India. Our
manufacturing facilities have machineries from the world renowned manufacturers of
56
equipment for this industry such as Dieffenbacher and Wemhoner from Germany,
Steinemann, and Kundig from Switzerland.
The brand “Archidply”, has positioned itself in the premium segment of the wood panel
and decorative surfacing products and is well known amongst architects, interior
designers and contractors for more than two decades, making it one of the oldest active
brands in its product category. The traders across India, including dealers and
distributors, have over a period of years recognized the Archidply Group for its quality
and fair policies.
Mr. DeenDayalDaga, Chairman and Managing Director of Our Company has more than
two decades of experience in managing wood panel industries. He has been conferred
with several accolades which include a) the "Udyogapatra Award" from the Vice
President of India in 1982 acknowledging his achievement as a self made industrialist, b)
the "SwatantraSwarnaJayantiUdyogVibhushan Award" from the Union Minister of
Commerce in 1999 for his contribution to the economic development of the country and
c) the "Melvin Jones" fellowship award by Lions Club recognizing his efforts towards
social causes. He was the President of Assam Plywood Manufacturers Association in the
year 1995-1996.
Our products comply with quality standards of BIS and International standards of BS of
UK, NEMA of USA and DIN of Germany. We have been awarded ISO 9001: 2000 for
quality management systems to manufacture and marketing of wood and agro based
panel products. Our Company has established independent Research & Development
laboratories headed by a chief chemist at our manufacturing facilities. The products
manufactured by Our Company are regularly tested batchwise for mechanical and
chemical properties before the batch is approved.
Our Company has set up a large distribution network and operates through 20 marketing
and representative offices and 61 distributors and stockists. As on September 30, 2007,
we have a network of 586 authorized dealers who in turn supply to more than 2,000 sub
dealers / retailers, giving a pan India presence for marketing of our products. This ensures
the availability of our products off-the-shelf in any corner of India. Our Company has the
57
manpower strength of 531 of which 137 are deployed for marketing as on September 30,
2007.
Vision
“To be one of India's best manufacturers of eco friendly products such as Plywood,
Veneers, Pre-lam and laminates, hence the best in the premier wood panel interior
solutions company.
To be a support and strength to Architects and Interior Designers in helping them
bringing alive their designs."
Factories
The Archidply group consists of 5 stellar companies
Assam Timber Products Pvt. Ltd., Assam
Archidply Industries Ltd., Mysore
Archidply Industries Ltd., Chintamani
Archidply Industries Ltd., Rudrapur
Shree Shyam Tea Pvt. Ltd., Assam
Bordhumsa Tea Estates Pvt. Ltd., Arunachal Pradesh
Innovation
The Archidply group has invested heavily in Research and Development activities. This
has resulted in bringing to the market the first eco friendly panel products. Whereas most
such products are hazardous because they contain Formaldehyde based resins which
leach into the environment, Archidply products are specially treated to reduce levels of
this dangerous chemical, making your home and office safe for you to live in.
Your furniture at home could be poisoning you. The panel with which it is made emits
dangerous gases and chemicals that are hazardous to health. Regulatory bodies in Europe
& Japan have laid rules prohibiting the emission of formaldehyde beyond the permissible
limit of Euro-1 Standard. Presently India has no such regulation in place, but will surely
change in the near future. Formaldehyde is used to develop polymers that are important
58
for bond formation of wood fibres in the making of plywood and other related products.
But formaldehyde leaves behind traces of dangerous emissions, which make their way
into homes, offices and other places, making it hazardous for health.
Harmful effects of Formaldehyde emission
Short-term Effects
Burning
Skin Irritation
evere Coughing
Inflammation of the Lungs
Irregular Heartbeat
Long-term Effects
Sensitisation
Eczema
Cancer
Quality Control
Our existence in the wood industry for 30 successful years proves that we have stood the
test of time by adhering to stringent quality measures. This has been possible due to the
company's positive approach in upgrading its laboratories year after year with the latest
equipments and tools. Archidply boasts of a state-of-the-art R&D laboratory that ensures
that every Archidply product has passed through a variety of tests. The laboratory lays
down stringent norms that every batch has to pass before it is deemed fit for sale. Often
the tests we conduct surpass the industry standards, ensuring that the bar for quality is
raised every time.
“Not only does the Indian Plywood Industries Research and Training Institute company
known as IPIRI use the company's laboratory, but also a team of 50 students from France
chose Archidply to study the wood panel industry in India.”
59
PRODUCTS
Plywood
Block Board and Flush Door
Pre-Laminated Board
Decorative Veneers
Decorative Laminates
Lamy Ply and Block Board
60
2.5 COMPANY PROFILE
Sarda Plywood Industries Limited (SPIL) is the flagship company of a prestigious
Chitlangia Group having significant presence in paper and tea besides plywood and allied
products.
SPIL was founded in 1957 an era where wood used to be known as the one stop source
for all furniture, and subsequently grew up to a formidable force under the dynamic and
visionary leadership of Late Sri P.D. Chitlangia. His vision was simple , yet powerful.
The manufacturing facility was established in Jeypore, Assam, the home of plywood
manufacturing. The DURO range of quality plywood products started rolling out from
this factory. Quality was an obsession for Late Sri P.D. Chitlangia and the same was
inculcated to each and every one down the line. This resulted in DURO becoming the
numerouno plywood brand in India. Competition was relegated to the backdoor.
SPIL's manufacturing facility is well equipped with machineries and resources to
produce any variety of plywood. Raw materials are sourced indigenously as well as from
overseas. Quality Assurance methods at each stage of manufacturing process ensure
quality from raw materials to finish. Research and Development is at the core of SPIL's
success story and the gamut of products under its banner speaks for themselves. In fact
R&D efforts have resulted in continuous product upgradations, innovations and new
product developments.
MD speaks
The environment is under threat, and it is our industry that can help in extending the
conservation of the forests, as one unit volume of solid timber is equal to two unit
volumes of plywood. Today, plywood is manufactured by using a mix of cultivation and
natural timber, which again adds to conservation.
We are always in the forefront of forest conservation by constantly innovating on our
processes and products. Our heritage of 50 years as: "the forest friendly company " has
61
helped us to "delight" our customers always by our products and services at the first
instant.
The Indian infrastructure is changing at a very rapid pace with major construction taking
place, not only in the metros but also at the district towns and industrial cities. A window
of this magnitude offers an opportunity to touch the lives not only of ourselves, but also
the society in promoting forest conservation.
PRODUCTS
plywood
Sarda Plywood Industries Limited (SPIL) is the
flagship company of a prestigious Chitlangia Group
having significant presence in paper and tea besides
plywood and allied products.
SPIL was founded in 1957 an era where wood used
to be known as the one stop source for all furniture,
and subsequently grew up to a formidable force under the dynamic and visionary
leadership of Late Sri P.D. Chitlangia.
The manufacturing facility was established in
Jeypore, Assam, the home of plywood
manufacturing. The DURO range of quality plywood
products started rolling out from this factory. Quality
was an obsession for Late Sri P.D. Chitlangia and
the same was inculcated to each and every one down
the line. This resulted in DURO becoming the
numerouno plywood brand in India.
SPIL's manufacturing facility is well equipped with
machineries and resources to produce any variety of
plywood. Raw materials are sourced indigenously as
well as from overseas. Quality Assurance methods at
each stage of manufacturing process ensure quality
from raw materials to finish. Research and Development is at the core of SPIL's
success story and the gamut of products under its banner speaks for themselves. In fact
62
R&D efforts have resulted in continuous product upgradations, innovations and new
product developments.
Block board
Durobord is dimensionally stable and can resist termites and other wood-destroying
organisms. And most importantly, it is carpenter-friendly, light in weight, easy on tools
and can hold screws and nails firmly.
Fireshield the FIRE Retardant Plywood from the stable of DURO. This plywood has been
impregnated with chemicals, which give the product a inflammability level, not less than
30 minutes. Additionally it is boiling water proof and termite resistant.
63
The TOWER brand is marketed by Sarda, the giant in plywoods with a comprehensive
expertise of 50 years in Plywoods, Blockboards and Veneers. This TOWER OF
STRENGTH is your assured answer facing problems both in indoor and outdoor usage.
Ply care tips
INSTALLATION / USAGE RECOMMENDATIONS
- Plywood and
Block Board
Use masking tape on the lines you're cutting to prevent the plywood /block board from
splintering.
Run screws into dowels planted at cross-angles rather than trying to drive them into end
grain where they have no chance of sticking.
Use a second sheet of plywood/blockboard as a rip guide when no long straight edge is
available.
In many applications it's possible to finish a sheet before cutting it; do this to save quite a
bit of time.
Break edges by running sandpaper from inner portion of the plywood sheet outward to
the open edge.
Always use backups to prevent tear-out when drilling.
In order to achieve the best results when installing plywood products, it is very important
to use the proper size nail. The pattern for nailing that is used is also very critical.
64
Not all plywood/block board applications require the same size nail or spacing between
nails.
You must check before you nail.
The spacing of nails on the edges of a panel frequently different from the spacing within
the panel.
65
66
3.1 THE CONCEPT OF DRIVING FORCES
It is important to judge what growth stage an industry is in, there’s more analytical value
in identifying the specific factors fundamental industry and competitive adjustments.
Industry and competitive conditions change because certain forces are enticing or
pressuring industry participants to alter their actions.
Driving forces are those that have the biggest influence on what kinds of changes will
take place in the industry’s structure and competitive environment.
Some driving forces originate in the company’s macro environment; some originate from
within the company’s more immediate industry and competitive environment.
Driving force analysis has two steps:
Identify what the driving force are, and
Assessing the impact they will have on the industry.
Driving Forces of the Plywood Industry are following:
Low cost product
Range and variety of products
Large and wide distribution channel
Changes in the long term industry growth rate
Innovation
Change in the buying behaviour of consumers
Economic growth
67
3.2 PORTER’S FIVE FORCES MODEL
SUPPLIER POWER
Supplier concentration
Importance of volume to supplier
Differentiation of inputs
Impact of inputs on cost or
differentiation
Switching costs of firms in the industry
Presence of substitute inputs
Threat of forward integration
Cost relative to total purchases in
industry
THREAT OF
NEW ENTRANTS
Barriers to Entry
Absolute cost advantages
Proprietary learning
curve
Access to inputs
Government policy
Economies of scale
Capital requirements
Brand identity
Switching costs
Access to distribution
Expected retaliation
Proprietary products
THREAT OF
SUBSTITUTE
S
-Switching costs
-Buyer
inclination to
substitute
-Price-
performance
trade-off of
substitutes
68
BUYER POWER
Bargaining leverage
Buyer volume
Buyer information
Brand identity
Price sensitivity
Threat of backward integration
Product differentiation
Buyer concentration vs. industry
Substitutes available
Buyers' incentives
DEGREE OF
RIVALRY
-Exit barriers
-Industry
concentration
-Fixed
costs/Value
added
-Industry
growth
-Intermittent
overcapacity
-Product
differences
-Switching costs
-Brand identity
-Diversity of
rivals
-Corporate
stakes
I. RIVALRY
In the traditional economic model, competition among rival firms drives profits to zero.
But competition is not perfect and firms are not unsophisticated passive price takers.
Rather, firms strive for a competitive advantage over their rivals. The intensity of rivalry
among firms varies across industries, and strategic analysts are interested in these
differences.
The intensity of rivalry is influenced by the following industry characteristics:
69
A larger number of firmsincreases rivalry because more firms must compete for the
same customers and resources. The rivalry intensifies if the firms have similar market
share, leading to a struggle for market leadership.
Slow market growth causes firms to fight for market share. In a growing market,
firms are able to improve revenues simply because of the expanding market.
High fixed costs result in an economy of scale effect that increases rivalry. When
total costs are mostly fixed costs, the firm must produce near capacity to attain the
lowest unit costs. Since the firm must sell this large quantity of product, high levels of
production lead to a fight for market share and results in increased rivalry.
High storage costs or highly perishable products cause a producer to sell goods as
soon as possible. If other producers are attempting to unload at the same time,
competition for customers intensifies.
Low switching costs increases rivalry. When a customer can freely switch from one
product to another there is a greater struggle to capture customers.
A low level of product differentiation is associated with higher levels of rivalry.
Brand identification, on the other hand, tends to constrain rivalry.
Strategic stakes are high when a firm is losing market position or has potential for
great gains. This intensifies rivalry.
High exit barriers place a high cost on abandoning the product. The firm must
compete. High exit barriers cause a firm to remain in an industry, even when the
venture is not profitable. A common exit barrier is asset specificity. When the plant
and equipment required for manufacturing a product is highly specialized, these
assets cannot easily be sold to other buyers in another industry
Industry Shakeout. A growing market and the potential for high profits induces new
firms to enter a market and incumbent firms to increase production. A point is reached
where the industry becomes crowded with competitors, and demand cannot support the
new entrants and the resulting increased supply. The industry may become crowded if its
growth rate slows and the market becomes saturated, creating a situation of excess
capacity with too many goods chasing too few buyers. A shakeout ensues, with intense
competition, price wars, and company failures.
70
II. THREAT OF SUBSITUTES
In Porter's model, substitute products refer to products in other industries. To the economist, a
threat of substitutes exists when a product's demand is affected by the price change of a substitute
product. A product's price elasticity is affected by substitute products - as more substitutes
become available, the demand becomes more elastic since customers have more
alternatives. A close substitute product constrains the ability of firms in an industry to
raise prices.
Substitute threat only exit in plywood industry where firm selling other product which is
used instead of plywood, like PLB, MDF board, Block Board, WPC board etc,.
III. BUYER POWER
The power of buyers is the impact that customers have on a producing industry. In
general, when buyer power is strong, the relationship to the producing industry is near to
what an economist terms a monopsony - a market in which there are many suppliers and
one buyer. Under such market conditions, the buyer sets the price. In reality few pure
monopsonies exist, but frequently there is some asymmetry between a producing industry
and buyers. The following tables outline some factors that determine buyer power.
In Plywood industry Buyer Threat is High because of:
Buyers are concentrated - there are a few buyers with significant market share
Buyers possess a credible backward integration threat - can threaten to buy
producing firm or rival
Buyers purchase a significant proportion of output - distribution of purchases or if
the product is standardized
Significant buyer switching costs - products standardized and buyer can easily switch
to another product
71
IV. SUPPLIER POWER
A producing industry requires raw materials - labor, woods, and other supplies. This
requirement leads to buyer-supplier relationships between the industry and the firms that
provide it the raw materials used to create products. Suppliers, if powerful, can exert an
influence on the producing industry, such as selling raw materials at a high price to
capture some of the industry's profits. The following tables outline some factors that
determine supplier power.
In plywood industry Suppliers threat is weak because of:
Many competitive suppliers - product is standardized
Purchase commodity products
Significant cost to switch suppliers
Easily availability of suppliers of Woods.
V. THREAT OF NEW ENTRANTS AND ENTRY BARRIERS
It is not only incumbent rivals that pose a threat to firms in an industry; the possibility
that new firms may enter the industry also affects competition. In theory, any firm should
be able to enter and exit a market, and if free entry and exit exists, then profits always
should be nominal. In reality, however, industries possess characteristics that protect the
high profit levels of firms in the market and inhibit additional rivals from entering the
market. These are barriers to entry.
Government creates barriers.Government stop on issuing new license for
starting new plywood manufacturing firm.
Patents and proprietary knowledge serve to restrict entry into an industry.
Ideas and knowledge that provide competitive advantages are treated as private
property when patented, preventing others from using the knowledge and thus
creating a barrier to entry.
Slow market Growth of this Industry.
Interpretation: According to porter’s five force model threat for the plywood
industry in descending order.
72
Threat of Substitutes
Rivalry among existing players
Threat from buyers
Threat from Supplier
Threat of New Entrants
3.3 STRATEGIC GROUP MAPPING
Understanding which companies are strongly positioned and which are weekly positioned
is an integral part of analyzing an industry’s competitive structure. The best technique for
revealing the market position of the industry competitors is strategic group mapping.
A strategic group consists of those industry members with similar competitive
approaches and position in the market.
The procedure for constructing a strategic group map is straight forward:
Identify the competitive characteristics that differentiate firms in the industry; typical
variable are services (High, Medium, Low) and operating income (High, Medium,
Low).
Plot the firms on a two variable map using pairs of these differentiating
characteristics.
The group’s share of total industry sales revenue
73
Figure 3.3 strategic group mapping
Interpretation:
From the above strategic group mapping graph, we take Net Profit on the Y-axis and net
sales on X-axis.
Here we draw the circle size on the basis of revenue of the particular company.
The main reason behind doing this analysis was to check the relation among the net profit
and the net revenue for each of the company. It is normal belief that the more number of
products company have the more they will b earning but it is not true in all cases and to
know the relation between these two variables we have taken it. Following table will
through light on the net profit and product offered by each of the company.
Century Ply
H
Green Ply
Pro
fit
Archid Ply
Kit Ply
L
M
L M H
Net sales
Operating
Profit
Sarda Plywood
74
Strategic group mapping
From strategic group mapping of plywood industries we find that Green Ply and
Century Ply in top of the industries and they got more competitive advantage
compare to other. Archid ply at lower position but other two companies and critical
position in plywood industry. They suffering for survive in the market.
3.4 EFE Matrix
The EFE matrix is the strategic tool used to evaluate firm existing strategies, EFE
matrix can be defined as the strategic tool to evaluate external environment or macro
environment of the firm include economic, social, technological, government,
political, legal and competitive information.
The EFE matrix is similar to IFE matrix the only difference is that IFE matrix
evaluate the internal factors of the company and EFE matrix evaluate the external
factors.
The EFE matrix consists of following attributes mentioned below.
No Company Name Net Profit Net sales
1 Century Plyboard industry 60.09 cr 1118.35 cr
2 Greenply Industries Ltd 53.41 cr 1643.66 cr
3 Kitply Industries Limited -104.20 cr 76.77 cr
4 Archid ply 0.91 cr 171.45 cr
5 Sarda Plywood Industries Limited -5.69 cr 168.47 cr
75
External Factors
External factors are extracted after deep internal analysis of external environment.
Obviously there are some good and some bad for the company in the external
environment. That’s the reason external factors are divided into two categories
opportunities and threats.
Opportunities
Opportunities are the chances exist in the external environment, it depends firm
whether the firm is willing to exploit the opportunities or may be they ignore the
opportunities due to lack of resources.
Threats
Threats are always evil for the firm, minimum no of threats in the external
environment open many doors for the firm. Maximum number of threats for the firm
reduce their power in the industry.
Rating
Rating in EFE matrix represents the response of firm toward the opportunities and
threats. Highest the rating better the response of the firm to exploit opportunities and
defend the threats. Rating range from 1.0 to 4.0 and can be applied to any factor
whether it comes under opportunities or threats.
There is some important point related to rating in EFE matrix.
Rating is applied to each factor.
The response is poor represented by 1.0
The response is average is represented by 2.0
The response is above average represented by 3.0
The response is superior represented by 4.0
76
Weight
Weight attribute in EFE matrix indicates the relative importance of factor to being
successful in the firm’s industry. The weight range from 0.0 means not important and
1.0 means important, sum of all assigned weight to factors must be equal to 1.0
otherwise the calculation would not be consider correct.
Weighted Score
Weighted score value is the result achieved after multiplying each factor rating with
the weight.
Total Weighted Score
The sum of all weighted score is equal to the total weighted score, final value of total
weighted score should be between range 1.0 (low) to 4.0(high). The average
weighted score for EFE matrix is 2.5 any company total weighted score fall below
2.5 consider as weak. The company total weighted score higher then 2.5 is consider
as strong in position.
Steps in developing the EFE matrix:
Identify a list of KEY external factors (critical success factors).
Assign a weight to each factor, ranging from 0 (not important) to 1.0 (very
important).
Assign a 1-4 rating to each critical success factor to indicate how effectively the
firm’s current strategies respond to the factor. (1 = response is poor, 4 = response is
extremely good)
Multiply each factor’s weight by its rating to determine a weighted score.
Sum the weighted scores.
77
No. Factor Weight Green Ply Century Ply Sarda Plywood
Rating Weighted
score
Rating Weighted
score
Rating Weighted
score
1 Easily
Availability of
Raw material
0.14 3 0.42 3 0.42 2 0.28
2 Wide
Distribution
Channel
0.16 3 0.48 4 0.64 2 0.32
3 Storage
Capacity
0.08 4 0.32 3 0.24 2 0.16
4 Adaption of
new
technology
0.08 3 0.24 3 0.24 2 0.16
5 Product
innovation
0.10 4 0.40 3 0.30 2 0.20
6 Rising cost of
Raw material
0.12 3 0.36 3 0.36 2 0.24
7 Decreases
demand for
plywood
0.08 2 0.16 2 0.16 2 0.16
8 Weak
consumer
spending
0.04 2 0.08 2 0.08 2 0.08
9 Substitute at
global and
local level
0.12 3 0.36 2 0.24 1 0.12
10 New
Regulatory
complaints
0.08 3 0.24 3 0.24 2 0.16
78
Total 1.00 3.06 2.88 1.88
Interpretation:
in EFE matrix we take three companies Green ply, Century Ply, and Sarda Ply for
External factor Evaluation. In EFE matrix we take critical external factor that affect the
most the company in plywood industry and giving weighted according to their
importance for plywood industry and finding hoe these all factor affect these all
companies. Find the summation of each company weighted regarding to external factor
and those are 3.06 for Green Ply, 2.88 for Century Ply, 1.88 for Sarda Ply. Here Green
Ply with 3.06 shows that strong position and also Century ply with 2.88 in strong position
in market for survive in plywood industry. The score above 2.5 saw strong position. Here
sarda ply with 1.88 score weak in plywood market.
3.5CPM Matrix:
EFE is used to collect competitive intelligence information from external environment. It
not focuses on internal issues. Whereas CPM is little different from EFE it also consider
the internal issues and best feature of CPM that it allow to compare the competitor
critical success factor with your organization.
Find out critical success factor:
Assign weight to each factor depend up how important the specific factor for the
organization success.
The weight range from 0.0 to 1.0 lower number shows no or minimum importance
and high weight show more importance of factor to the company.
Assign rating to each factor depends upon how well organization respond to that
factor.
Assign a 1-4 rating to each critical success factor to indicate how effectively the
firm’s current strategies respond to the factor. (1 = response is poor, 4 = response is
extremely good)
Multiply each factor’s weight by its rating to determine a weighted score.
79
Sum the weighted scores.
Average total weighted score is 2.5.
The above CPM matrix compares the oil marketing companies on importance factor. The
total calculated figure tells the exact situation.
N
o.
Factor Weigh
t
Green Ply Century Ply Sarda Plywood
Rating Weighte
d score
Rating Weighted
score
Rating Weighted
score
1 Length of
product line
0.15 4 0.60 3 0.45 1 0.15
2 Market share 0.20 4 0.80 2 0.40 1 0.20
3 Product
Quality
0.06 3 0.18 4 0.24 2 0.12
4 Customer
services
0.04 3 0.12 4 0.16 3 0.12
5 Loyalty of
customer
0.05 2 0.10 3 0.15 2 0.10
6 E-commerce 0.02 3 0.06 3 0.06 3 0.06
7 Storage
capacity
0.16 3 0.48 2 0.32 2 0.32
8 Social
responsibility
0.08 3 0.24 3 0.24 1 0.08
9 Environmental
issues
0.06 3 0.18 3 0.18 1 0.06
10 Advertisement 0.18 4 0.72 3 0.54 2 0.36
Total 1.00 3.48 2.74 1.57
80
Interpretation:
In CPM matrix we taken same three companies which is seen in EEF matrix. Here we
compare all companies on the basis of some critical success factor for finding
competitive position in market. Critical factor are those which are important for deciding
the success in market. The score for the Green Ply is 3.48, century Ply is 2.74 shows top
position in market and among them Green Ply little bitter higher than the Century Ply
because of Green Ply focus in Global market. The score of Sarda Ply is 1.57 which shows
lower position compare to other major player of this industry.
81
3.6 PHASE OF INDUSTRY LIFE CYCLE
Today, we will see, different life stages in a particular industry. There are stages in
everybody’s life like childhood, adult, middle age and then old age. Likewise, there are
FOUR stages in every industry’s life cycle.
Introduction stage in which growth is extremely fast, Growth stage in which growth is
not as fast as start-up stage but is faster than the general economy, maturity stage in
which growth is not faster than the general economy and the Decline stage in which the
growth rate is less than that of general economy.
1. Introduction Stage
New technologies like personal computers or wireless communication portray the initial
stages of an industry. At this stage, it is very difficult to anticipate which firms will
succeed; some firms will be a total success while some might fail completely. Hence, the
risk involved in selecting any specific firm in the industry is quite high at this stage.
82
However, at this stage, since the new product has not yet flooded its market, there will be
a rapid growth in sales and earnings at industry level. Like, for example, in 1980’s,
personal computers were a part of very few houses, while on the other hand, products like
fans or even refrigerators were part of almost every household. So naturally, the growth
rate of products like refrigerators will be much less.
2. Growth Stage
Once the product has proved itself in the market, several leaders in the industry start
surfacing. The start-up stage survivors become more stable and market share can be
easily envisaged. Thus, the performance of the industry in general will be more minutely
tracked by the performance of the firms that have survived. As the product breaks
through the market place and is used commonly, the growth rate of the industry is still
faster than the rest of economy.
3. Maturity Stage
The product has attained the full aptitude to be consumed at this stage by the users. So,
any growth from this point just tracks the growth of the economy in general. At this
stage, as the product gets more and more standardized, it compels the producers to
compete heavily on price basis. As a result, the profit margins are lowered and add to the
pressure on profits. Most often, firms at this stage are referred to as cash cows as their
cash flows are quite consistent but offer very little opportunity for growth of profit.
Instead of reinvesting the cash flows in the company, they are best milked from.
4. Decline
In this stage following features are identified.
costs become counter-optimal
sales volume decline or stabilize
prices, profitability diminish
profit becomes more a challenge of production/distribution efficiency than
increased sales.
83
Interpretation:
here we show the industry life cycle and in concluding decide that plywood industry in
DECLINE stage at present and require Product innovation for survive. Product
innovation require in terms of new Economic Poduct.
3.7 CHALLENGES FOR INDUSTRY
Demand is seasonal and is high during festival season
Low purchasing power of consumers
Local market moreover covers by the unorganized sector then the organized sector.
Very little expenditure in Research and Development area: The Indian companies do not
spend more on the R&D area, thus making the market obsolete.
Government banned on issuing new plywood industry license: At present government
stop the issuing new license for plywood industry to prevent the environment. But
transfer of license from one party to other possible.
Complexity of government procedure: procedure of the government for establishing new
industry with transfer of license complex and slow.
Sales done only through indirect channel in organized sector.
84
3.8 OPPORTUNITIES FOR INDUSRY
1. Importing Raw material:
Government permission for import of raw material and that will help for easily
availability of raw material.
2. Easily entering in market through distributor:
selling of plywood for new company in market is easily done through distributor compare
the other industry.
3. Availability of newer variants of a product:
Consumers are spoilt for choice when it comes tochoosing products. Newer variants of a
product will help a company in getting the attention ofconsumers who look for
innovation in products.
4. Availability of financing schemes:
Availability of credit and the structure of the loan determine theaffordability of the
product. Sale of a particular product is determined by the cost of credit as muchas the
flexibility of the scheme.
5. Rise in the share of organized retail:
Rise in organized retail will set the growth pace of the Indianconsumer durables industry.
According to a working paper released by the Indian Council form Research on
International Economic Relations (ICRIER), organized retail which
constituted a mere four percent of the retail sector in FY07 is likely to grow at 45-50%
per annum and quadruple its share in the total retail pie 16% by 2011-2012. The share
will grow with bigger players entering the market.
6. Strength of the product.
7. Multiple usage of the product.
85
3.9 THREATS FOR INDUSTRY
1. Threat from new entrants, especially global companies:
The domestic consumer durables sectorfaces threat from newer companies, especially
from global ones who have technologically advancedproducts to offer.
2. Rivalry and competition:
Presence of a large number of players in the domestic consumer durablesindustry leads to
competition and rivalry among companies. Threat from rivalry and competitionposes a
threat to domestic companies.
3. Threat from substitute products/services:
There is lots of substitute product present in domestic market and that gives threat to
plywood industry.
4. Customer power with respect to availability of choice:
The availability of a wide product line onaccount of most products being homogeneous,
poses a threat for companies operating in the consumer durables sector. Customers have
the choice of both domestically produced and imported goods, with similar features.
5. Threat of innovative product:
products like PLB, MDF board is biggest threat for plywood because they made from
wood waste and agro waste and that will encourage them.
6. WPC board is biggest global threat:
WPC board is made from Wood and plastic waste and it have excellent quality features
which becoming them global threat for plywood industry.
86
87
4.1 TREND ANALYSIS OF THE INDUSTRY
Trend Analysis is the practice of collecting information and attempting to spot a pattern,
or trend, in the information. In some fields of study, the term "trend analysis" has more
formally defined meanings
Although trend analysis is often used to predict future events, it could be used to estimate
uncertain events in the past, such as how many ancient kings probably ruled between two
dates, based on data such as the average years which other known kings reigned.
4.1.1 Trend Analysis of the Industry On the Basis of Net Sales
Table 4.1 Trend Analysis of the Industry On the Basis of Net Sales
Company Name 2010 2011 2012
Net Sales % Change Net Sales % Change Net Sales % Change
Century paybord 767.39 100% 1013.85 132.12% 1118.35 145.73%
Greenply 942.91 100% 1322.91 140.30% 1643.66 174.32%
Kitply 81.72 100% 85.32 104.41% 76.77 93.94%
Sarda plywood 116.91 100% 147.70 126.34% 168.47 144.10%
Archidply 159.79 100% 159.14 99.59% 171.45 107.29%
TOTAL 2068.71 100% 2728.92 120.55% 3178.7 133.48%
88
Figure 4.1 % change in Net Sales
Interpretation:
On the basis of the Net sales of the selected companies, we can interpret that overall Net
sales of the industry is increasing constantly.
From the above chart we can interpret that in the year 2011, Net sales is increase with
20.55% compare to the year of 2011, because of Century plybords Net sales is
increasing with the 32.12% as well as Greenply sales is increasing with 40.30%, and
Kitply and sarda plywood Net sales is increasing with 4.41% and 26.34% . But we can
see that in the Archidply. Decreasing Net sales is 0.41% simultaneously.
On the basis of above interpretation we can analyze that out of five companies majorities
Net sales is increasing with 20.55% so, industry’s 2011 trend go upside.
While in the year 2012 Net sales increases with 12.97% in the industry and industrial
trend goes slightly upside because in the selected companies Net sales is slightly
increases.
Increasing Net sales is the good for industry.
0
20
40
60
80
100
120
140
160
2010 2011 2012
%Change in net sales
%Change in net sales
89
4.1.2 Trend Analysis of the Industry On the Basis of Earning Per Share
Table 4.2 Trend Analysis of the Industry On the Basis of Earning Per Share
Figure 4.2 % change in EPS
0
20
40
60
80
100
120
140
2010 2011 2012
%Change in EPS
%Change in EPS
Company Name 2010 2011 2012
EPS % Change EPS % Change EPS % Change
Century paybord 10.19 100% 12.43 121.98% 14.04 137.78%
Greenply 22.43 100% 10.39 46.32% 22.13 98.66%
Kitply -6.74 100% -19.12 283.68% -30.54 453.12%
Sarda plywood 3.78 100% 6.42 169.84% -13.25 -350.53%
Archidply 3.63 100% 0 0% 0.41 11.29%
TOTAL 33.29 100% 10.12 124.36% -7.21 70.064%
90
Interpretation:
On the basis of above chart we can interpret that the EPS of the industry is increase
24.36% in the year of 2011. Because of selected companies EPS is also increasing.
In the year of 2011 century plybord EPS is increases by 21.98%, In case of kitply and
sarda plywood. The EPS increase from the year 2011 is 183.68% and 69.84%, and other
companies, while in the Greenply and archidply decrease in EPS that is 53.68% and
100%.
So, the overall trend of the EPS in the industry is increase and decrease. On the basis of
above chart we can see that EPS is also in decreasing trend in the year of 2012. It is more
decrease compare to 2007-08. Because there is less fluctuation of the EPS in the selected
companies.
4.1.3 Trend Analysis of the Industry On the Basis of Total Expenditure
Table 4.3 Trend Analysis of the Industry On the Basis of Total Expenditure
Company Name 2010 2011 2012
Total
Expenses
%
Change
Total
Expenses
%
Change
Total
Expenses
%
Change
Century paybord 688.69 100% 922.79 133.99% 983.35 142.79%
Greenply 842.39 100% 1211.25 143.79% 1479.63 175.65%
Kitply 89.09 100% 97.21 109.11% 97.91 109.90%
Sarda plywood 118.26 100% 144.83 122.47% 174.14 147.25%
Archidply 156.14 100% 145.48 93.17% 175.73 112.55%
TOTAL 1894.57 100% 2521.56 120.51% 2910.76 138.63%
91
Figure 4.3 % change in total expenditure
Interpretation:
From the chart we can says that there is more fluctuation of expenditure in the year of
2011 compare to 2012. In the year 2011 there is 20.51% increases in the expenses of the
industry because out of five selected companies four company’s expenses are increases
such as Centuryplybord 33.99%, Greenply 43.79%, Kitply. 9.11%, Sarda plywood
22.47%.
And the only one company’s expenses are decrease that is 6.83%. So it’s doesn’t make
any impact on the trend of industry.
There is less fluctuation in the year 2012 as compare to 2011.
So at last we can says that total expenditure of the industry is less increases in the year
2012 compare to 2011, so it’s beneficial for the industry.
In the year of 2011 expense is increase in the century ply and green ply and kit ply and
sarda plywood in total expenditure is increase.
0
20
40
60
80
100
120
140
160
2010 2011 2012
%Change in Total Expenditure
%Change in TotalExpenditure
92
4.2 RATIO ANALYSIS
A tool used by individuals to conduct a quantitative analysis of information in a
company's financial statements. Ratios are calculated from current year numbers and are
then compared to previous years, other companies, the industry, or even the economy to
judge the performance of the company. Ratio analysis is predominately used by
proponents of fundamental analysis.
1. Types of ratio:
Profitability ratio
Liquidity ratio
LIQUIDITY RATIO
1. Current Ratio:
“The current ratio establish a relationship between current assets and current
liabilities”
Current ratio is also known as working capital ratio. The ratio is an indicator of the
firm’s ability to meet its short then obligations. This ratio expenses the relationship
between current asset & current liability. Current asset are those that are converted in
to cash with in 12 month period & current liabilities are those that are repayable
within 12 months period.
CURRENT RATIO = CURRENT ASEETS
CURRENT LIABILITY
93
Table 4.4 current ratio
Particular
(Rs. in Crs.)
Year Current Assets Current Liability Current
Ratio
Century
plybords
2012 365.66 130.65 2.79
2011 257.89 114.23 2.26
2010 216.95 101.66 2.13
Green ply 2012 330.80 321.92 1.03
2011 218.90 307.87 0.71
2010 118.49 304.28 0.39
Kit ply 2012 -132.27 150 -0.88
2011 -23.35 49.78 -0.47
2010 -16.51 45.24 -0.36
Sarda
plywood
2012 31.73 52.89 0.59
2011 35.31 34.40 1.03
2010 26.63 28.42 0.94
Archid ply 2012 106.24 44.76 2.37
2011 114.69 47.31 2.42
2010 115.17 48.48 2.38
TOTAL 2012 702.16 700.22 1.003
2011 603.44 553.64 1.09
2010 460.73 528.08 0.872
94
Figure 4.4 current ratio
Interpretation:
In the above table we can see in the assets of the Cencuryplybords and greenply and
sardaplywood company are Increase from the year 2011. Same in the case of current liability
it decreases Almost 2.5crs. in the Archid ply in year 2011.
In the year 2008 to 2009 the current assets of the cencuryplybords is increase by 108 crs and
the liability increase in case of Kitply by 100crs. The industry’s overall effect is shows
increasing trend. The current ratio is increase from year 2012 by 0.003
0
0.2
0.4
0.6
0.8
1
1.2
2010 2011 2012
current retio
current retio
95
1. QUICK RATIO/ACID TEST RATIO
An indicator of a company's short-term liquidity. The quick ratio measures a
company's ability to meet its short-term obligations with its most liquid assets. The
higher the quick ratio, the better the position of the company.
The quick ratio is more conservative than the current ratio, a more well-known
liquidity measure, because it excludes inventory from current assets. Inventory
is excluded because some companies have difficulty turning their inventory into cash.
In the event that short-term obligations need to be paid off immediately, there are
situations in which the current ratio would overestimate a company's short-term
financial strength.
QUICK RATIO = CURRENT ASSETS-INVENTORY
CURRENT LIABILITY
Table 4.5 quick ratio
Particular
(Rs. in Crs.)
Year Current Assets Inventory Current Liability Quick Ratio
Century
plybords
2012 365.66 196.66 130.65 1.29
2011 257.89 171.17 114.23 0.58
2010 216.95 149.43 101.66 0.66
Green ply 2012 330.80 272.29 321.92 0.18
2011 218.90 229.28 307.87 -0.03
2010 118.49 199.75 304.28 -0.27
Kit ply 2012 -132.27 9 150 -0.94
2011 -23.35 7.43 49.78 -0.62
2010 -16.51 8.77 45.24 -0.56
Sarda
plywood
2012 31.73 47.18 52.89 -0.29
2011 35.31 37.71 34.40 -0.07
2010 26.63 30.27 28.42 -0.13
Archid ply 2012 106.24 77.70 44.76 0.64
96
Figure 4.5 quick ratio
Interpretation:
In this ratio absolutely liquid assets are consider and includes only cash in hand. Cash at
bank and short term marketable securities. Inventories are excluded because there is
doubt of its reliability in cash at a time.
From the above table the assets of cencuryplybords in the year 2012 increase by 100crs.
And inventory is also increase by 15crs. In the year 2012 the liability decreases in case
of archid ply by 3crs. So its overall increases the liquidity position of the industry.
The major reason for increase in the liquidity of the industry in the year 2012 is
increase.
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
2010 2011 2012
Quick ratio
Quick ratio
2011 114.69 79.16 47.31 0.75
2010 115.17 77.15 48.48 0.78
TOTAL 2012 702.16 602.83 700.22 0.88
2011 603.44 524.75 553.59 0.61
2010 460.73 465.37 528.08 0.48
97
2. PROFITABILITY RATIO
Gross Profit Ratio:
Gross profit ratio(GP ratio)is the ratio ofgross profit to net salesexpressed as a
percentage. It expresses the relationship between gross profit and sales.
The basiccomponents for thecalculationofgross profit ratioare gross profit and net sales.
Net sales means that sales minus sales returns. Gross profit would be the difference
between net sales andcost of goods sold.Cost of goods soldin the case ofatradingconcern
would be equal to opening stock plus purchases, minus closing stock plus all direct
expenses relating to purchases. In the case of manufacturing concern, it would be equal to
the sum of the cost ofraw materials, wages, direct expenses and all manufacturing
expenses. In other words, generally the expenses charged toprofit and loss accountor
operating expenses are excluded from thecalculationofcost of goods sold .
GROSS PROFIT RATIO = GROSS PROFIT *100
NET SALES
Table 4.6: Gross profit ratio
Particular
(Rs. in Crs.)
Year Gross Profit Net Sales Gross Profit Ratio
(%)
Century
plybords
2012 138.54 1118.35 12.39
2011 97.76 1013.85 9.64
2010 83.46 767.39 10.88
Green ply 2012 184.73 1643.66 11.24
2011 124.80 1322.91 9.43
2010 97.78 942.91 10.37
Kit ply 2012 -22.51 76.77 -29.32
2011 -12.56 85.32 -14.72
2010 -11.17 81.72 -13.67
Sarda
plywood
2012 -3.69 168.47 -2.19
2011 6.28 147.70 4.25
98
Figure 4.6 GP Ratio
Interpretation:
From the selected companies the gross profit ration of the year 2011 was decrease in
cencuryplybords 1.24%, green ply 0.93%, , % and the major decrease in archid ply by
9.79% because the gross profit of the company was highly decrease by 15.76crs Rs. So it
affects archidply GP ratio.
In the case of year 2008-2009 there very fluctuation in the gross profit. There is increase
in gross profit ratio of two companies such as cencuryplybords and green ply because
there is highly increase in gross profit of 40.78 crs and 59.93 crs.
There are three companies which gross profit goes up such as cencuryplybords with
12.39%, green ply with 11.24% and the major decrease in archid ply by 10% because
gross profit suddenly decrease by 15.96 crs.
-15
-10
-5
0
5
10
15
20
25
30
2010 2011 2012
Gross profit ratio
Gross profit ratio
2010 3.61 116.91 3.09
Archid ply 2012 -3.48 171.45 -2.07
2011 12.28 159.14 7.72
2010 20.41 159.79 12.77
TOTAL 2012 293.59 3178.7 -9.95
2011 228.56 2728.92 16.32
2010 194.09 2068.72 23.44
99
So from all the above interpretation we a can says that the gross profit of the courier
industry is going down the reason behind that is highly decrease in the gross profit ratio
in the year 2012 by -9.95% which is double then the earlier year. This is a result of
sudden increase in net sales by 449.781crs.
Net profit Ratio:
Net profit ratiois the ratio of net profit (after taxes) to net sales. It is expressed as
percentage.
The two basic components of thenet profit ratioare the net profit and sales. The net profits
are obtained after deducting income-tax and, generally, non-operating expenses and
incomes are excluded from the net profits for calculating this ratio. Thus, incomes such as
interest on investments outside the business, profit on sales of fixed assets and losses on
sales of fixed assets, etc are excluded.
NET PROFIT RATIO = PROFIT AFTER TAX *100
NET SALES
Particular
(Rs. in Crs.)
Year Profit After
Tax
Net Sales Net Profit Ratio
(%)
Century
plybords
2012 60.09 1118.35 5.37
2011 74.51 1013.85 7.35
2010 80.95 767.39 10.55
Green ply 2012 53.41 1643.66 3.25
2011 25.09 1322.91 1.90
2010 49.57 942.91 5.26
Kit ply 2012 -104.20 76.77 -135.73
2011 -65.24 85.32 -76.47
2010 -23.01 81.72 -28.16
Sarda
plywood
2012 -5.69 168.47 -3.38
2011 2.62 147.70 1.77
2010 1.54 116.91 1.32
100
Table 4.7: Net Profit Ratio
Figure 4.7: NP Ratio
Interpretation:
From the above chart, we interpret that the net profit ratio of the industry. In the year
2012 is decrease by 64.51% because the PAT is decrease by 32.46crs. It is double than in
previous year and net sales is more increase by 449.78 crs. So overall effects is decrease
the net profit ratio.
The effect of decrease in net profit ration of the industry come from highly decreases in
two of the company called cencuryplybords and kit ply .
-140
-120
-100
-80
-60
-40
-20
0
2010 2011 2012
Net profit ratio
Net profit ratio
Archid ply 2012 0.91 171.45 0.53
2011 0.00 159.14 0
2010 7.98 159.79 4.99
TOTAL 2012 4.52 3178.7 -129.96
2011 36.98 2728.92 -65.45
2010 117.03 2068.72 -6.04
101
In the year 2012 and 2011 the net profit ratio of the industry was major decrease by 60%.
In the all over company profit is a continuously decrease.
(1) Operating Profit Ratio
Operating net profit ratio is calculated by dividing the operating net profit by sales. This
ratio helps in determining the ability of the management in running the business.
OPERATING PROFIT = EBIT – Other Income
Net Sales
Table 4.8: Operating profit ratio
Particular
(Rs. in Crs.)
Year EBIT Other
income
Net Sales Operating
Profit Ratio
(%)
Century
plybords
2012 102.93 -9.10 1118.35 0.10
2011 88.43 14.85 1013.85 0.07
2010 109.54 45.00 767.39 0.08
Green ply 2012 125.71 -12.25 1643.66 0.08
2011 74.61 -9.20 1322.91 0.06
2010 83.97 8.21 942.91 0.08
Kit ply 2012 -98.53 -74.89 76.77 -0.31
2011 -56.42 -42.43 85.32 -0.16
2010 -18.02 -5.32 81.72 -0.16
Sarda
plywood
2012 -5.16 0.08 168.47 -0.03
2011 5.64 1.03 147.70 0.03
2010 4.76 2.31 116.91 0.02
Archid ply 2012 14.62 23.06 171.45 -0.05
2011 11.06 3.63 159.14 0.05
2010 19.04 3.32 159.79 0.10
TOTAL 2012 139.57 -73.1 3178.7 -0.21
2011 123.32 -32.12 2728.92 0.05
2010 199.29 53.52 2068.72 0.12
102
Figure 4.8: Operating profit ratio
Interpretation:
In the year 2011 plywood industry’s operating profit ratio was decrease by 0.07%
because of negative operating profit earn by kit ply. In case of kitply operating profit ratio
decrease by 0% and in case of sarda plywood it decrease by 0.06% the reason behind it
was minor change in other income was decrease by 0.95crs.
In the year 2012 the industry’s operating profit was decrease by 0.26%, it is double
decrease then earlier year. One of the mail reason of decrease is the operating profit ratio
of sarda plywood is drastically decrease by 0.06% because the EBIT decrease by 10.8crs.
-0.25
-0.2
-0.15
-0.1
-0.05
0
0.05
0.1
0.15
2010 2011 2012
Operating profit ratio
Operating profit ratio
103
DEBT-EQUITY RATIO
A measure of a company's financial leverage calculated by dividing its total
liabilities by stockholders' equity. It indicates what proportion of equity and debt the
company is using to finance its assets.
A high debt/equity ratio generally means that a company has been aggressive in financing
its growth with debt. This can result in volatile earnings as a result of the additional
interest expense.
If a lot of debt is used to finance increased operations (high debt to equity), the company
could potentially generate more earnings than it would have without this outside
financing. If this were to increase earnings by a greater amount than the debt cost
(interest), then the shareholders benefit as more earnings are being spread among the
same amount of shareholders. However, the cost of this debt financing may outweigh the
return that the company generates on the debt through investment and business activities
and become too much for the company to handle. This can lead to bankruptcy, which
would leave shareholders with nothing.
The debt/equity ratio also depends on the industry in which the company operates. For
example, capital-intensive industries such as auto manufacturing tend to have a
debt/equity ratio above 2, while personal computer companies have a debt/equity of
under 0.5.
DEBT-EQUITY RATIO = TOTAL DEBT
SHAREHOLDERS EQUITY
104
Table 4.9: debt-equity ratio
Particular
(Rs. in Crs.)
Year Debt Equity Debt-Equity
ratio
Century
plybords
2012 337.09 22.25 15.15
2011 211.04 22.25 9.48
2010 196.26 22.25 8.82
Green ply 2012 600.88 12.07 49.78
2011 519.79 12.07 43.06
2010 407.40 11.05 36.87
Kit ply 2012 224.54 34.49 6.51
2011 316.75 34.49 9.18
2010 279.35 34.49 8.10
Sarda
plywood
2012 28.27 4.30 6.57
2011 28.93 4.09 7.07
2010 22.71 4.09 5.55
Archid ply 2012 55.65 22.07 2.52
2011 69.56 22.05 3.15
2010 70.99 22.00 3.23
TOTAL 2012 1246.43 95.18 80.53
2011 1146.07 94.95 71.94
2010 976.71 93.88 62.57
105
Figure 4.9: Debt-equity ratio
Interpretation:
From the above graph we conclude that in the year 2011 the debt-equity ratio was increase
11. the reason behind that was two company’s ratio was increase such as cencuryplybords
and green ply
The courier industry’s debt equity ratio increases in the year 2012 by 8.59 because the debt
highly increases by 100.36crs
One of the company kitply debt-equity ratio decrease by 2.67. Because debt are decreasing
by 92.21crs and equity are not a change so we can conclude by saying that the position of
the capital structure of the plywood industry was good during 2011 because it includes more
equity portion than debt but in the year 2012 the graph shows high increase in ratio which
may be harmful for the company and shareholder in future.
0
10
20
30
40
50
60
70
80
90
2010 2011 2012
Debt eqity ratio
Debt eqity ratio
106
107
CONCLUSION
In this project we make the market research project in plywood industry. In this project
we gather general information of plywood industry and analyse the growth of the
Plywood Industry. Also find the factor that effecting Plywood Industry.
We take 5 major player of this industry which are Green Ply, Century Ply, Kit Ply,
Archid Ply, Sarda Ply. We take all information of these companies and comparing it. We
take the all financial data of that companies and done financial analysis. In financial
analysis we done trend analysis on the basis of net sales, total expenditures, EPS. Also we
do Ration analysis in Financial analysis and concluding that Profit and sales in Plywood
industry continuously decreasing since last two years.
From this analysis we concluded that financial position of Green Ply, Century Ply are
good in Plywood Industry.Net profit of Sarda ply and Kit Ply in minus.
In competitive analysis we use the tools like Driving Forces, Strategic Group Mapping,
Porter’s Five Force model, EFE and CPM matrix and Phase life cycle of Plywood
Industry.
In EFE and CPM matrix we comparing the three company Green Ply, Century Ply, Sarda
Ply and concluded that Green Ply and Century Ply has good position in Market in terms
of strategic analysis.
In Phase life cycle of plywood we analyze each and every stages of life cycle. At present
plywood in Decline Stage of Product Life cycle and research show that product
innovation required for plywood industry to survive in the market.
At last using these all analysis we make the B plan for New SSI unit of Plywood.
108
109
BIBLOGRAPHY
Book:
Published By: C.R.Kothari.”Research Methodology “
Information provided by companys
Market research by malhotra& das
Statistic for management by Levin &rubbin
Web site:
http://www.wikipedia.com
http://www.centuryply.com
http://www.greenply.com
http://www.kitply.com
http://www.archidply.com
http://www.sardaply.com
110
111
1.1 PROJECT PROFILE AT A GLANCE
1. Name of the Project: GHANSHYAM PLYWOOD INDUSTRY
2. Location within state/Country: 91, DEDIYASAN G.I.D.C.
3. Nearest Road, Rail : MEHSANA
4. Estimated Capital Cost of the Project: 1,62,86,000
5. Capital Equipment: 1) Tree cutter
2) Steam Boiler.
3) Round cutter and horizontal cutter.
4) Hydraulic Hot press.
5) cutter for perfect sizing
6. Raw Material: Soft wood and Hard wood
7. Environment Impact: The project is an Environment Friendly Activity. There will be
no Ecological imbalance and Pollution hazards to the Localities because of the Project. The project may
help in checking the destruction of timber forest.
8. Time-frame for selection & completion
Of selection of Project: Within a period of 12 months.
9. Government Incentive package applicable
To the Project: Capital Investment, Power, Interest, Transport, subsidies, etc.
112
1.2 INTRODUCTION
• Dediyansn is rural area attached to the Mehsana city. In Dediyasan G.I.D.C. established which declared as
a industrial zone. The Hardwood and Softwood is the raw material required for this project. The
Hardwood i.e. raw material of trees will be bought from nearest farm. Softwood will be collected
from both nearest farm and “Gandhidham”. The softwood is Rice husk, Cotton waste and Soya bin
waste. The raw material is easily available in this region and hence, the project location is selected here.
Dediyasan is connected to Ahmadabad and other metro city with Roads and Railways.
• The making of Plywood is the most universal spread manufacturing process all over. The process
includes making log, cutting, veneer preparation and plywood sheets. The high quality adhesive is being
used.
• This industry has carved for itself an important place among the Plywood’s of the State. It would provide
fulltime employment to the labors and skilled workers. This will help the rural people of this region as
they are getting paid for the agriculture waste instead of burning it and development of both agriculture
and industry as well
1.3 VISION OF THE PROJECT
• “Customer Satisfaction’- by providing high quality in a professional and reliable manner through merit
shop philosophy, allowing it to be competitive, adaptable and creative”
1.4 MISSION OF THE PROJECT
• To provide jobs to rural skillful employees.
• To develop the economy of the region.
• To popular eco friendly products.
• To obtain maximum growth with minimum investment.
• To use the modern technology to the plywood industries.
113
1.5 SELECTION OF THE PROJECTS
• The main reasons that encourage me to select this project are given as follows as
• The main raw materials for the industry, i.e. softwood and hardwood of various types are abundantly
available throughout the State.
• Government policies beneficial to this project.
• I am interested in the plywood manufacturing industry.
• The local market not any plywood industry.
• Today plywood demand increases day by day.
The industry has considerable scope for development and various new products suited to modern tastes
can be manufactured out of Trees.
Market Potential and competition
• Plywood products have always its demand in market. The product are eco-friendly and cheap as
compared to other plastic product. The different Plywood products have different categories of customers.
The Plywood product like furniture generally popular among the middle class people of regions.
My potential customers as follow as
Furniture manufacturing company
Retailer of the Plywood Sheets
Government institution like Railways, State Transport
Competitor
Other SSI unit of Plywood in local market
Major Player of the industries.
114
1.6 MARKETING CHANNELS
• The marketing channels plays important role in the distribution of the products to reach the potential
customers. The selection of the marketing channels is also important .so choose my marketing channels
as follows as
• Wholesaler & Distributor:
These People working as a company partner because they are giving place our product.
• Industrial Merchants:
The registration with the trading companies like India mart will also be the marketing channel
1.7 LEGAL FORMALITIES
• for the starting a SSI unit , every unit has some legal formalities to complete for starting anew business or
to dissolve any industries. Here depicted some legal aspects which are necessary to be completed by
entrepreneurs.
No objection letters DIC.
Approval letter from DIC.
Power sanction assurance letter from G.E.B.
Certification of water supply.
Application for Telephone.
S.S.I Unit Registration.
Octroi Exemption letter from Municipal council.
Registration for sales Tax.
Registration of central Sales Tax.
Application for loan to Urban Bank, Mehsana
Certificate from industrial pollution Office.
Document of Each & Every Partners.
115
1.7 Plant Location:
The plant located at following address:
Corporate
Office
Entry G
at
Inventories
Store
Work shop
Toilet
Canteen
Scraps
Room
116
The factor influenced to choose the plant layout are as follow as:
1. Availability of Raw materials:
2. Availability of Skillful labors:
3. Good Transportation facilities:
4. Availability of the Water and Power supply:
1.8 Raw Materials
• The outer layers of plywood are known respectively as the face and the back. The face is the surface that
is to be used or seen, while the back remains unused or hidden. The center layer is known as the core. In
plywood’s with five or more plies, the inter-mediate layers are known as the cross bands.
• Plywood may be made from hardwoods, softwoods, or a combination of the two. Some common
hardwoods include ash, maple, mahogany, oak, and teak. The most common softwood used to make
plywood in the United States is Douglas fir, although several varieties of pine, cedar, spruce, and redwood
are also used.
• Composite plywood has a core made of particleboard or solid lumber pieces joined edge to edge. It is
finished with a plywood veneer face and back. Composite plywood is used where very thick sheets are
needed.
• The type of adhesive used to bond the layers of wood together depends on the specific application for the
finished plywood. Softwood plywood sheets designed for installation on the exterior of a structure usually
use a phenol-formaldehyde resin as an adhesive because of its excellent strength and resistance to
moisture. Softwood plywood sheets designed for installation on the interior of a structure may use a blood
protein or a soybean protein adhesive, although most softwood interior sheets are now made with the
same phenol-formaldehyde resin used for exterior sheets. Hardwood plywood used for interior
applications and in the construction of furniture usually is made with a urea-formaldehyde resin.
• Some applications require plywood sheets that have a thin layer of plastic, metal, or resin-impregnated
paper or fabric bonded to either the face or back (or both) to give the outer surface additional resistance to
117
moisture and abrasion or to improve its paint-holding properties. Such plywood is called overlaid
plywood and is commonly used in the construction, transportation, and agricultural industries.
• Other plywood sheets may be coated with a liquid stain to give the surfaces a finished appearance, or may
be treated with various chemicals to improve the plywood's flame resistance or resistance to decay.
Plywood Classification and Grading
There are two broad classes of plywood, each with its own grading system.
• One class is known as construction and industrial. Plywoods in this class are used primarily for their
strength and are rated by their exposure capability and the grade of veneer used on the face and back.
Exposure capability may be interior or exterior, depending on the type of glue. Veneer grades may be N,
A, B, C, or D. N grade has very few surface defects, while D grade may have numerous knots and splits.
For example, plywood used for subflooring in a house is rated "Interior C-D". This means it has a C face
with a D back, and the glue is suitable for use in protected locations. The inner plies of all construction and
industrial plywood are made from grade C or D veneer, no matter what the rating.
• The other class of plywood is known as hardwood and decorative. Plywoods in this class are used
primarily for their appearance and are graded in descending order of resistance to moisture as Technical
(Exterior), Type I (Exterior), Type II (Interior), and Type III(Interior). Their face veneers are virtually free
of defects.
Sizes
• Plywood sheets range in thickness from. 06 in (1.6 mm) to 3.0 in (76 mm). The most common
thicknesses are in the 0.25 in (6.4 mm) to 0.75 in (19.0 mm) range. Although the core, the cross bands,
and the face and back of a sheet of plywood may be made of different thickness veneers, the thickness of
each must balance around the center. For example, the face and back must be of equal thickness.
Likewise the top and bottom cross bands must be equal.
• The most common size for plywood sheets used in building construction is 4 ft (1.2 m)wide by 8 ft (2.4
m) long. Other common widths are 3 ft (0.9 m) and 5 ft (1.5 m).Lengths vary from 8 ft (2.4 m) to 12 ft
(3.6 m) in 1 ft (0.3 m) increments. Special applications like boat building may require larger sheets.
118
1.9 FUTURE PLANNING FOR THE EXPANSION:-
• Even though plywood makes fairly efficient use of trees—essentially taking them apartand putting them
back together in a stronger, more usable configuration—there is still considerable waste inherent in the
manufacturing process. In most cases, only about 50-75% of the usable volume of wood in a tree is
converted into plywood. To improve this figure, several new products are under development.
• One new product is called oriented strand board, which is made by shredding the entire log into strands,
rather than peeling a veneer from the log and discarding the core. The strands are mixed with an adhesive
and compressed into layers with the grain running in one direction. These compressed layers are then
oriented at right angles to each other, like plywood, and are bonded together. Oriented strand board is as
strong as plywood and costs slightly less.
1.10 LIST OF THE MACHINE TO BE USED IN THE MANUFACTURING PROCESS AND THEIR
COST OF PURCHASE
General Plywood Processing Machine
1. Hydraulic Hot Press Machine:
‘BS’ make, Hydraulically operated steam/oil heated multi daylight Hot press in unclosing frame. The
main body is fabricated from solid plate and Hot plates are also fabricated from solid plate as well as
complete with Automatic power pack, steam connection pipes and other necessary parts and components.
Rs. 55,50,000
2. Steam Boiler:
Rs. 15, 00,000
3. Chimney(30m) with Ladder:
Rs. 2, 50,000
4. Heat Recovery unit (Air-Pre Heater)
Rs. 10, 00,000
5. Glue Mixer:
Rs. 3, 00,000
119
1.11 SOURCE OF FINANCE:
• Supply of finance is very important factor in the establishment of an enterprise is old. Finance is the life
line of the Business. Finance deal with the arrangement of the sufficient capital for the smooth run of the
Organization. Following are the certain sources of the finance scheme:
A) Own Capital:
According to the rules setup by the various financial institution 25% to 35% of the capital should be the own
investment of the entrepreneur. 33.33% of the project cost will be financed by the promoter himself.
Rs. 50,00,000 from partner 1
Rs. 12,86,000 from partner 2
B) Term Loan from the Commercial Bank:
Urban co. Bank, Mehsana, Gujarat lend Rs 1,00, 00,000 at the rate of interest 13.75%
Cost Of the Project:
Sr No. Particulars Amount
1 Land 15, 00,000
2 Site Development 45,000
3 Building 20,00,000
4 Plant and Machinery 85,00,000
5 Furniture and Misc. 2,00,000
6 Preliminary and preoperative exp. 90,000
7 Working capital (3 months) 39,51,000
Total 16286000
120
Means Of Finance:
Sr no. Rate of Interest Particulars Amount
1 NIL Own Deposit 50,00,000
2 13.50% Bank Loan 1,00,00,000
3 NIL Other Liabities 22,56,000
Total
Total Fixed Capital: ##change head :Total Assets
Sr no. Particulars Amount
1 Land 15,00,000
2 Site Development 45,000
3 Building 20,00,000
4 Plant and Machinery 85,00,000
5 Furniture and Misc. 2,00,000
6 Preliminary and Preoperative exp.###consider seperate 90,000
Total ##would be 12245000 1,23,35,000
1. Land
Sr no. Particular Price/acre Amount
1 Land Area (2 acre) 7,50,000 15,00,000
2. Site Development
Sr no. Particulars Cost of item Amount
1 Filling of the Land 13,000 13,000
2 Fencing 12,000 12,000
3 Gardening 10,000 10,000
4 Gates 10,000 10,000
Total 45,000
121
3. Building:
Sr no. Particulars Cost of the item Amount
1 Corporate Office 3,20,000 3,20,000
2 Show Room 3,50,000 3,50,000
3 Work Shop 7,80,000 7,80,000
4 Toilet 1,50,000 1.50,000
5 Store room 4,00,000 4,00,000
Total 20,00,000
4. Plant and Machinery:
Sr no. Particular Quantity Amount
1 Hydraulic Hot press 01 56,50,000
2 Steam Boiler 01 15,00,000
3 Chimney with Ladder 01 4,00,000
4 Air-pre Heater 01 2,50,000
5 Dust controller 01 2,00,000
6 Pressure reducing
station
01 2,00,000
7 Glue Machine 01 3,00,000
Total 85,00,000
5. Preliminary and Preoperative Expenses:
Sr no. Particular Amount
1 Deposit for Power, Water, Telephone 25,000
2 Loan Application process fees 12,000
3 Deposit for internet 3,000
4 Legal Stamp Duty and Registration 30,000
5 Travelling 10,000
6 Consultancy 10,000
Total 90,000
122
6. Furniture and Miscellaneous Expenses:
Sr no. Particulars Quantity Amount
1 Furniture
Office chairs 8 25,000
Almirah 8 40,000
Racks 20 50,000
Tables 2 8,000
Computer and Accessories 1 30,000
Fans 8 12,000
Sofa set 1 15,000
2 Work shed ----------- 20,000
Total 2,00,000
7. Depreciation (per annum):
Sr no. Types of Assets Cost of Assets Amount
1 Plant and Machinery 85,00,000 8,50,000
2 Furniture 2,00,000 40,000
3 Building 20,00,000 1,00,000
Total 9,90,000
123
Working Capital Requirement:
Sr no. Particular 1 Month 3 Month
1 Raw Material 11,40,000 34,20,000
2 Salary and Wages 1,24,000 3,72,000
3 Other Manufacturing
Expenses
10,000 30,000
4 Power and Fuel 25,000 75,000
5 Selling and Office
expenses
18,000 54,000
Total 39,51,000
1. Raw Material:
Sr no. Particulars No. of
Tons/month
Price/tons
(Rs)
Cost/month Cost /year
1 Softwood 150 6000 9,00,000 1,08,00,000
2 Hardwood 50 4000 2,00,000 24,00,000
3 Adhesive 5 8000 40,000 4,80,000
Total 11,40,000 13680000
124
2. Salary and Wages:
Sr no. Name of the
Post
No. of
member
Salary /head Salary /month Salary /year
1 Manager 1 15,000 15,000 1,80,000
2 Accountant 1 8,000 8,000 96,000
3 Office staff 2 5,000 10,000 1,20,000
4 Chemist 1 4,500 4,500 54,000
5 Supervisor 1 5,000 5,000 60,000
6 Machine
Operator
3 4,000 12,000 72,000
7 Skilled labor 7 3500 24,500 2,94,000
8 Unskilled labor 9 3000 27,000 3,24,000
9 Women
mazdoor
4 2500 10,000 1,20,000
10 Mechanic cum
Electrician
2 4000 8,000 96,000
total 31 1,24,000 14,88,000
2. Power and Fules:
Sr no. Particulars Per month Per Annum
1 Fuel 8,000 96,000
2 Power 17,000 2,04,000
Total 25,000 3,00,000
125
3. Other Manufacturing Expenses:
Sr no. Particulars Per month Per annum
1 Paint 3,000 36,000
2 Packaging Material 3,000 36,000
3 Repairing of the
Machine ##contradict
with cost of production
4,000 48,000
Total 10,000 1,20,000
4. Office Selling, Distribution Expenses:
Sr no. Particulars Per month Per annum
1 Postage and Stationeries 2,000 24,000
2 Telephone and internet
bills
2,000 24,000
3 Transportation 14,000 1,68,000
Total 18,000 2,16,000
5. Trade credit
Year 1 is a :- 1495905
Cost of the Production:
Sr no. Particulars Per month Per annum
1 Raw Material 11,40,000 1,36,80,000
2 Salary and Wages 1,24,000 14,88,000
3 Other Manufacturing
Expenses
10,000 1,20,000
4 Consumables 20,000 2,40,000
5 Repairing of machines 15,000 1,80,000
Total 13,19,000 1,58,28,000
126
Estimated Sale:
Sr. no Items No.of item
sold/month
Price / item Monthly sales Yearly sales
1 6 mm plywood sheets
3x6 40 570 22800 273600
4x6 54 720 38880 466560
3x8 90 720 64800 777600
4x8 90 960 86400 1036800
Total 274 212880 2554560
2 9 mm plywood sheets
3x6 60 756 45360 544320
4x6 74 1008 74592 895104
3x8 115 1008 115920 1391040
4x8 114 1344 153216 1838592
Total 363 389088 4669056
3 12 mm plywood sheets
3x6 84 972 81648 979776
4x6 98 1296 127008 1524096
3x8 150 1296 194400 2332800
4x8 150 1728 259200 3110400
Total 482 662256 7947072
4 19 mm plywood sheets
3x6 45 1458 65610 787320
4x6 65 1944 126360 1516320
3x8 75 1944 145800 1749600
4x8 90 2592 2,33,280 2799360
Total 275 571050 6852600
Total 1835274 2,20,23,288
127
Profitability:
Sr no. Particulars Per month Per annum
1 Sales 1835274 22023288
2 Less: Cost of Production 13,19,000 15828000
3 Gross Profit 5162274 5271288
4 Less: Office, selling,
distribution exp.
18,000 216000
5 Less: Interest on loan
13.50% bank
1,12,500 1350000
Net Profit 385774 4629288
128
1.12 PROFIT & LOSS ACCOUNT
1 2 3 4 5
Instlled Capicity ( Unit / Year) 20000 22000 26000 26000 26000
Production ( Unit / Year) 17000 18700 20570 20570 20570
Capicity Utilization 85% 85% 79% 79% 79%
A Sales Realisation 22023288 24,225,616 26,648,177 26,648,177 26,648,177
B Cost of Production
Raw Material 1,36,80,000 15,048,000 16,552,800 16,552,800 16,552,800
Power 300,000 300,000 300,000 300,000 300,000
Wages and Salaries
14,88,000
1,488,000
1,488,000
1,488,000
1,488,000
Factory Overhead
120,000
120,000
120,000
120,000
120,000
C Administration and Selling
Exp.
2,40,000 2,40,000 2,40,000 2,40,000 2,40,000
D Gross Profit Before Interest
6,195,288
7,029,616
7,947,377
7,983,377
7,983,377
E Total Financial Expences
Interest on Term Loan
1,350,000
1,215,500
1,080,000
9,45,000
810,000
F Operating Profit
4845288
5,814,116
6,867,377
7,038,377
7,173,377
G Preliminary Exp.
H Profit and Loss Before Tax
4,845288
5,814,116
6,867,377
7,038,377
7,173,377
I Provision for Tax
7,26,793
8,72,117
1,030,106
1,055,756
1,076,006
Net Profit
4,118495
4,941,999
5,837,271
5,982,621
6,097,370
129
1.13 BALANCE SHEET
At the End
of
Constructi
on Period
1 2 3 4 5
Liabilities
Owner's Fund
7,256,000
7,256,000
7,256,000
7,256,000
7,256,000
7,256,000
Reserve and surplus
4,118,495
4,941,999
5,837,271
5,982,621
6,097,370
Secured Loan
Term Laon
10,000,000
10,000,000
9,000,000
8,000,000
7,000,000
6,000,000
Current Liabilities and
Provision
Trade Credit
1,495,905
3,059,108
4,666,930
5,529,430
6,391,930
Total
17,256,000
22,870,400
24,257,107
25,760,201
25,768,051
25,745,300
Assets
Fixed Assets
12,245,000
11,255,000
11,255,000
11,255,000
11,255,000
11,255,000
Current Aseets , Loans And
Advances
Cash and Bank Balance
4,921,000
Raw Material
11,525,400
12,912,107
14,415,201
14,423,051
14,400,300
Miscellaneous Expandature
and losses
preliminary Exp.
90,000
90,000
90,000
90,000
90,000
90,000
Total
17,256,000
22,870,400
24,257,107
25,760,201
25,768,051
25,745,300