Century Plyboards plans Rs 1100cr expansion

In an interview with CNBC-TV18, Sajjan Bhajjanka, MD, Century Plyboards, spoke about the latest happenings in his company and sector.

Below is a verbatim transcript of his interview with CNBC-TV18's Latha Venkatesh and Gautam Broker. Also watch the accompanying video. Q: Take us through the expansion plan, where exactly is it located? A: Our main plant is in Meghalaya. Present capacity is of 1.2 million tonne. Now, we are expanding our tinker capacity by another 1.75 million tonne which will feed two grinding plant, one at Guwahati and another at Bihar. So, both the plants are 1.6 million tonne capacity each. Q: How much will it cost and how will you pay for it? A: The total project cost is Rs 1,100 crore. Out of which, Rs 745 crore, we are borrowing from financial institutions. Rest is being funded by our own internal accrual. Q: Given that cement is looking at overcapacity at the moment, do you think you would want to look at the demerger subsidiary and invested separately or unlock value through a possible demerger at any point in the future? A: Yes, we are planning it. Q: So, by when can we hear on a possible decision on that? A: We have called our board meeting this Saturday and maybe we shall be taking a decision on that. Q: Would you be looking to divest some of your stake going forward in that cement subsidiary later, raise capital and fund the project that you are looking? A: By and larger, we are self sufficient. Our internal accruals are more or less enough to take care of this. But we are not averse to divesting strategic part of this to raise some fund to comfort our expansions. Q: So, in that case, is it 1:1 division? How large is the cement unit compared to your ply unit? A: At the moment, we are evenly balanced. Our profit is more or less balanced between both the things, cement and plywood equally. But with the growth and expansion, cement group would increase in the size. Q: Is it equal in terms of asset size as well as profit in revenue contribution? A: Yes, at the moment, it is more or less equal. This year