Archidply to set up a grrenfield project in Karnataka

Chennai/Bangalore: Archidply Industries Ltd, which manufactures products like plywood, block board, particle board, decorative laminates and decorative veneers, has chalked out a capital expenditure plan of Rs 79 crore to set up a new plant and also expand the capacity of`its existing plant at Rudrapur in Uttarakhand.

The firm is now setting up a greenfield project for manufacturing particle board in Chintamani in Karnataka. It plans to invest Rs 37 crore on the project.

The plan to set up the plant in Chintamani in south Karnataka, according to Shyam Daga, joint managing director, Archidply, was influenced by its “proximity to the raw material source. The eucalyptus plantations in Kolar will supply the raw materials.”

Said Daga, “Millions of seedlings have been planted by the farmers who are into eucalyptus cultivation. Hence, in another two or three years, the supply pressures will ease and the prices could fall.”

The firm which has filed a draft red herring prospectus for an IPO, claims that the present market conditions will not affect its expansion plans as it can manage with internal accruals and a term loan of Rs 28 crore. “If the IPO does well, then we will reduce the term loan component,” added Daga.

About 70 per cent of Archidply’s business comes from commercial projects and the rest from housing. The firm is hoping to ride on the real estate boom, especially on the commercial side.