Greenlam Industries eyes next phase of growth with mega capex plan and weak rupee aids it

The weakening of the Indian rupee will benefit Greenlam Industries as the decorative laminate and veneer company is a net exporter, Greenlam Industries’ CFO Ashok Sharma said on Monday, September 26. Not just that, the company has unveiled a big-ticket capex plan to push its next level of growth.

“We are the largest exporter of laminates for the past 12 years. However, we do the import for our raw material, but we are net exporters, so the weakening of the rupee will have a positive impact on us,” he told CNBC-TV18.

Sharma's reaction came on a day the rupee hit a record low of 81.5525 per dollar, down from 80.99 in the previous session. The ebb in the rupee came as the greenback strengthened amid risk-averse sentiment among investors. Furthermore, escalation of geopolitical risks due to conflict in Ukraine, a negative trend in domestic equities and significant foreign fund outflows sapped the investor appetite, PTI quoted forex traders as saying.

Greenlam is into decorative laminate, veneer and allied products and generates 50 percent of its revenues from exports. Also, it will be investing Rs 950 crore, over 2-3 years, to set up the third laminate plant and foray into the plywood and particle board business.

A capex of Rs 950 crore can result in revenue of Rs 1,500-1,600 crore in the next 3-4 years for Greenlam, said Sharma.

“New plywood unit’s revenue comes in the next year (FY23) as well as the new unit for the laminate will also be available next year."

On growth outlook, Sharma said, “We have acquired one unit in Ahmedabad which has already started running since last month and we are projecting a revenue of around Rs 200-250 crore in one or two years.”