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00:00We are now joined by Mr. Manoj Tulsian, Joint Managing Director and CEO of Greenply Industries.
00:05Good afternoon, sir, and thank you so much for joining us today. Great catching up with you
00:09again. Firstly, I just wanted to congratulate you on this particular JV. We have spoken a bit about
00:16it in the past, but very happy to talk about it. Just wanted to start off with this particular
00:22joint venture that you have with Samet Bibi. We know it's a Turkish player. It's a 50-50 JV.
00:28Talk to us about what kind of opportunity are we looking at for Greenply Industries
00:32from this particular joint venture? Thanks, Puneet, once again. You know,
00:38how we look at it, this entire opportunity, if you look at the market size today, it is
00:42close to around $2 billion. And again in this business also, 20% is organized and 80% is
00:50almost unorganized. Our addressable market is the organized market and maybe 10 or 15%
00:57out of the unorganized market. So that's principally the market size what we are looking
01:01at. This JV, which will have a total investment of 250 odd crores over three phases, gives us a
01:11capacity of around 750 to 800 crores when all the three phases are implemented. And the way it looks
01:20like, we would be able to ramp up this business to a size of anything between 400 to 500 crores
01:27in the next four to five years, which means, you know, of the market addressable market,
01:34we should be around 6% to 7% of market share. So I just wanted to understand a bit more and,
01:42you know, for our viewers as well to set some context. Now, this joint venture is, of course,
01:46for a new, you know, you like getting into the functional furniture hardware segment.
01:52Talk to us about this particular, you talked to us about the opportunity of $2 billion.
01:57How much of it is currently with the organized players like yourself,
02:01you are entering the space, what's the kind of competition like? And how are you seeing,
02:05you know, the customer demand for, you know, this segment to get more organized? Has there been,
02:10you know, talks with your dealers and distributors of having this particular segment
02:15and seeing that big opportunity that you spoke about?
02:19So two, three things, I think, you know, first thing, I would say that the opportunity which
02:24I spoke about, it's around close to around $2 billion. And as I said, the organized market
02:29is around 20%. But this is like the high end market. And you will not see too many players
02:36today who are actually manufacturing this in India. So this clearly will be a strength to
02:43manufacture and sell into India. Greenply, as you know, the brand itself has a lot of strength and
02:49we have a great distribution network, which in a way also supports our Greenply brand. So it is a
02:56natural extension of these product lines within the existing channel. However, you know, there
03:03is a separate management team and the management team is always free to look at, use the existing
03:09bandwidth as well as maybe go to exclusive channel partners who are today only selling
03:15hardware into the market. From an opportunity size, I clearly feel that, and when you look at
03:22certain data today, you find that in the real estate space also, the premium end and the high
03:31end real estate growth is much faster compared to the mid and the low end. That clearly gives
03:39us a lot of opportunity to, you know, be better player into this business line and the product
03:46line has, looks like a great future also going forward. At the same point of time, you know,
03:53post pandemic, there is a huge change, which we have all noticed in terms of the behavior of
03:58spending into this country. One, there is, of course, you know, the upscaling, I would say in
04:05terms of the 2BHKs becoming a 3BHK and a 3BHK becoming a 4BHK. And second, in terms of spending
04:13habits also, people have realized that we need to spend, you know, so that's where there is a
04:20traction, which will come and which is, which would be there on the premium end of the business.
04:27Now, these product lines are mainly dealing at the premium end. So, we clearly see that, you know,
04:33there will be a lot of traction of these products going forward in this country.
04:38So, just if you could update us, what's the current progress of this particular joint
04:42venture? Have you already set up the manufacturing facility? And if you, you know, you said that
04:48there are like three phases of investments as well. How much is the current investment that's
04:52already done from the 250 odd crores? So, we started to set up this plant in Baroda sometime
04:59in October, first week of October. And the first phase of manufacturing is almost in place. We're
05:07just expecting a few more machines to be there during this month. And then, you know, we'll be
05:12done with in terms of, you know, go live of our first phase. During this month, we have done a
05:18soft launching also in terms of going to the market. And we did something, we did some trial
05:24run even in the month of March. And, you know, so first phase will almost get operational now.
05:30And the second and the third phase will come sometime in year FY25 and FY26, depending on
05:37how fast one we can ramp up into the country. And what was your second question?
05:43Just to understand what's, you know, in this particular time frame, there are three phases
05:47that you mentioned of 250 crore investment. So, how much has already been done in the first phase?
05:52So, look, you know, since we know that what are the machines which are going to come in phase 2
05:56and phase 3, the entire civil architecture has been designed accordingly. And the investment
06:02on the civil side and everything is completed. Now, as and when we just require, we just need
06:07to get the machine in place for phase 2 and phase 3. Having said that, we have almost invested
06:15close to around 150 to 160 odd crores as of today. And, you know, the balance investment will come
06:22in the next two phases. Understood, sir. Now, just for this year,
06:25you did mention that phase 2 might commercialize by the end of FY25 or 26. So, do you think that
06:32it's right for us to assume that the first revenue from this particular joint venture
06:36will only be seen as in FY26? And you did mention about, you know, the full year
06:41revenue guidance roughly about 300 to 400 odd crores in the next 3 to 4 years.
06:46Should we expect some of it, maybe 10-20% of that amount to come in FY26 directly?
06:53Well, yes. First thing, the revenue stream will start this year. As I said that, you know,
06:58we have already gone to the market. We just started, you know, from this month. So, we'll have
07:04a certain amount of revenue also coming in during this year, the H2 of this year. At the same point
07:11of time, it's not that, you know, what we are not producing here in India, we will not be selling
07:16all those, you know, products. So, we have a Turkish facility, which is, you know, done by
07:22Samit there. And we are introducing those products also, but those will initially not be a Made in
07:28India products. We'll complete the line in terms of the product portfolio, but many of those things
07:33initially will get imported as per the demand requirement. And as and when we complete our
07:39phase 2 and phase 3, then we will discontinue importing those products from Samit Turkey.
07:48Just one follow-up question on this export of the products that will be currently imported in India.
07:54Do you see that, you know, the first when once the, you know, the revenue starts,
07:58I think in this particular, you didn't mention that the revenue is going to start, but
08:01the major impact of it will be seen in FY26. Do you see the first year of operation will be seeing
08:06a lot of revenue coming from these particular imports? Or do you see a lot of the products
08:11that will be produced here in India will see a higher traction? Because I'm guessing it's a
08:15different market of both these products. Just wanted to understand on that.
08:19Well, the market will remain the same. It's the same market, the same end customers and
08:24the channel will also be the same. It's only that since we don't have the machineries in place
08:29to complete the entire product portfolio, we'll initially import many of these products,
08:34you know, to complete the product portfolio. But it's very difficult to say that what will
08:41be the proportion of sales between my domestic manufacturing and the import component.
08:48Initially, it can be high, the import component, but as gradually we implement our phase two and
08:53phase three, those proportions will drop down significantly. Now, Mr. Tulsan, since we have
08:59you here, I just wanted to talk about, you know, the quarter one results also, which have happened
09:03a really strong show from Greenply. I just want to understand a bit on, you know, the raw material
09:08picture, because we have seen timber prices, you know, being going up in the, since the start of
09:13the year, and you did give us some picture at the end of quarter four. While you have mentioned
09:17there was some margin contraction because of that, your margin has still gone up on a year-on-year
09:21basis. How is it for quarter two since the start of July? Any kind of update that you can give us
09:26on timber prices? The timber prices remain at the level where it were in, you know, quarter one.
09:33It has not shown any signs of coming down. And also, the way we look at it, we don't see timber
09:41prices to soften in the next three to four quarters. After that, we feel, and the way the
09:47information is there, that the new crop will start coming in, and that will be an opportunity for
09:54prices to soften. How much it will be, it will be very difficult to say at this point of time, but
10:01we clearly see that for the next 12 months, we really don't see any respite in terms of timber
10:07prices softening. Well, Mr. Tulsi, thank you so much for joining us today and giving us a picture
10:12of the joint venture with Sam and many congratulations to you again. We look forward
10:16to having a larger chat in the middle of the quarter, but thank you so much for joining and
10:19we'll have, you know, a bit more on the raw material as well as, you know, the outlook for
10:23the year on the main business as well. Thank you so much.