The company made the statement in its latest quarterly results, for the three months ended June 30.
CenturyPly says the margins on its MDF business were reduced for the quarter mainly due to increases in raw-material prices, which could not be passed on. In order to improve profitability company it will increase the volume of premium MDF by 40%.
“We shall also be launching Fire Resistant MDF which apart from all other features like borer proof, termite proof of premium MDF will be ultimate MDF in terms of quality and features,” it said.
“Our 2nd line at Hoshiarpur is now stabilised. With aforesaid planning we expect volume growth of 20% in coming quarters. With increased share of premium products margins are likely to remain stable and take care of further increase in cost.”
MDF revenue for the quarter improved from 155.60 Crore to 166.77 Crore and EBIDTA margins reduced from 34.9% to 26.2%.
The company’s particleboard business was reported to be suffering both on revenue and profitability. Revenue was down from 51.07 Crore to 39.46 Crore.
Despite the difficult market situation, plywood has done well for CenturyPly with improvement in top-line as well as EBIDTA margins. The top line improved from 474.75 Crore to 488.57 Crore and EBIDTA margins improved from 10.4 % to 13.6 % compared to the same quarter a year ago.
Meanwhile, CenturyPly successfully produced the first fibres with its recently installed Andritz pressurized refining system at its medium-density fibreboard (MDF) production plant in Punjab, India.
At the same time, the company placed an order for another Andritz pressurized refining system for its MDF line in Andhra Pradesh, India. This will be the third system supplied by ANDRITZ to CenturyPly.
The new state-of-the-art fibre preparation system will have a design capacity of 37 tons per hour and process eucalyptus and poplar wood chips for producing high-quality MDF. Its start-up is scheduled for the second half of 2023.