Uniply to set up a unit in coastal Andhra Pradesh

New owner Keshav Kantamneni looks to fix issues, chalks growth strategy, focus on improving capacity utilisation, reducing cost of capital, and strong marketing.

Barely three months after acquiring Uniply Industries Ltd, investment banker Keshav Kantamneni is ready with a multi-pronged growth plan, one to improve capacity utilisation at the Chennai plant, reduce the cost of capital and focus on marketing.

The BSE and NSE-listed Uniply Industries CEO Keshav, is in discussions to acquire plywood-making units in north and western regions to improve market access.

Mr. Kantamneni, who addressed media persons here on Wednesday, said that he sees a huge market potential in Andhra Pradesh and Telangana, the former particularly in view of the new capital proposed and associated developments.

The firm is evaluating plans for a plant in coastal Andhra Pradesh with an estimated investment of Rs.30-Rs.35 crore. Proximity to seaport and Chennai plant were factors to influence the choice of location.

The plan, for a 7,500 NA (notional area) per day capacity plant, however, would depend on the fiscal incentives offered to new investments in Andhra Pradesh, he added. The company is also planning to double the dealership in the two States from 12 to 30 shortly.

The one aspect making Uniply look for new capacities is the demand, which he explained, is bound to only increase as the trend now is to change interiors once in five years. Goods and Service Tax, he added, will be a game changer for the organised players in the Rs.20,000 crore industry by bringing those in unorganised sector under the ambit. Quality and not cost of the product would be key differentiator then, he explained.

On the acquisition, he said that it was a Rs.138-crore deal for the company, which posted Rs.172-crore turnover in FY 2014. Mr. Kantamneni, who acquired 36 per cent equity and has made an open offer for another 26 per cent, said that in July a new product line complying with global standards would be unveiled.

The company, he said, would invest Rs.20 crore to Rs.25 crore to acquire plywood plants in north and western regions. The emphasis was on improving the utilisation of Chennai facility, whose capacity is 20,000 NA/day. This will help improve the bottomline, he said.