November 21, 2016 / 18:36 IST
Management expects demonetisation to affect demand adversely for the next 2-3 quarters. Unorganised players will be hit more severely and this may result in lower raw material prices for domestic wood. Replacement demand, which accounts for 30% of the company’s plywood sales, would be significantly affected. Greenply may face working capital pressure due to demonetisation, but intends to keep debtor days in check.
Greenply derives 85% of segmental revenues from plain MDF and the rest from the value-added segment. In the value-added segment, pre-laminated MDF accounts for a majority of the sales whereas the contribution from flooring is miniscule (1%). Going ahead, management expects the revenue contribution from flooring to increase significantly. 70% of MDF sales are in the furniture segment whereas the rest has applications such as shoe heels and boxes.
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