Brief HistoryGreenlam Industries was incorporated as a wholly-owned subsidiary of Greenply Industries in August 2013. In the year 2014 Greenply Industries demerged its “Decorative business” and transferred it to Greenlam Industries. The demerger of the Greenlam Industries led to Mr Saurabh Mittal (son of Mr Shiv Prakash Mittal) handling the laminate business, while Mr Shobhan Mittal (younger son of Mr Shiv Prakash Mittal) & Mr Rajesh Mittal (brother of Shiv Prakash Mittal) continued to handle the ply-board as well as MDF business in the Greenply Industries. The founder & the chairman of Greenply Industries Mr Shiv Prakash Mittal serve as the chairman of Greenlam Industries also.
About the Management Team & Their Initial DaysThe Mittals are Marwaris who hail from Laxmangarh town in Sikar district of Rajasthan. The family continued to live in Rajasthan until 1970s when Shri Sanwarmal Palriwal (Shiv Prakash’s father) decided to move to Assam. The combined company Greenlam & Greenply was started by Shiv Prakash Mittal, Saurabh & Rajesh Mittal. Before starting with his own business, Shiv Prakash worked for Kitply Industries Ltd for over two decades & his family lived along with him in Tinsukia, Assam. Before venturing into the laminates business, Shiv Prakash bought a small granite business where Saurabh used to work part time after attending his college. After the granite business was sold off, Saurabh formally joined the business in the year 2000. The company in its early days used to supply its unbranded laminate to another big laminate player & worked as an OEM (Original Equipment Manufacturer) for other companies. But after the year 2006-07, company changed its strategy and started branding its laminates. A brief timeline of the company describing the history of the company is given below: 1990: Formation of Mittal Laminates Private Limited by Mr Shiv Prakash Mittal. 1992: The company laid the foundation of its laminate unit at Behror, Rajashthan. 1993: Company started commercial operations of its first manufacturing plant at Behror, Rajasthan. Soon company started exporting laminates from India. 1994: The company was converted to a Public limited company & its name was changed to “Mittal Laminates Ltd” 2002: The company started commercial production of Decorative Veneer. 2009: Company was awarded as the largest exporter of Laminates from India. 2009: Company started with Commercial production at its 2nd laminate unit at Nalagarh, Himachal Pradesh. 2010: Company started with Commercial production at its 2nd laminate unit at Nalagarh, Himachal Pradesh with a laminate manufacturing capacity of 4.68 million sheets per annum. This took the combined laminate capacity of the company to 10.02 million sheets per annum. 2014: Greenply demerged its ‘Laminates business’ into its wholly-owned subsidiary called as ‘Greenlam Industries’. 2014: The company initiated commercial production of Engineered Wooden Flooring & Melamine Faced Chipboards at its Behror unit. 2015: The company got listed on BSE & NSE in March. 2015: The company started commercial production of Engineered doors at Behror plant. 2015: The company went ahead and launched Teak & Engineered Veneer in Decorative Veneer segment. 2015: The company further expanded its laminates capacity by 2 million sheets, taking the total Laminates manufacturing capacity to 12.02 million sheets per annum at its Nalagarh plant. 2017: The company further expanded its laminate capacity by 2 million sheets at Nalagarh plant. The combined capacity scaled 14.02 million sheets p.a. 2019: The board approved brownfield capacity expansion by adding capacity of 1.6 million sheets of laminates per annum with an approximate investment of Rs 25 Crores to be funded through a mix of Debt & Internal accruals. The combined laminate capacity shall increase to 15.62 million sheets p.a.
Family StructureShiv Prakash Mittal is the founder and is Chairman in both the industries that is Greenlam Industries & Greenply Industries. His elder son Saurabh Mittal handles the operations of Greenlam Industries along with his wife Parul Mittal; while his younger son looks after the operations of Greenply Industries along with his uncle Rajesh Mittal (brother of Shiv Prakash Mittal), both acting as Joint MD’s. Just like a demerger, which the company did in 2014 a similar demerger is under process. Herein a new entity called as ‘Greenpanel Industries’ will be made. Greenply Industries will demerge its MDF division and part of its plywood division (Uttarakhand plant with plywood capacity of 10 million sqm. out of total plywood capacity of 35.40 million sqm.) and MDF plant in Uttarakhand (with capacity of 180,000 cum), along with Chittoor Andhra Pradesh plant (with 360,000 cum MDF capacity) to Greenpanel Industries. The companies are trying to build a separate distribution network for its Uttarakhand plant and will sell the plywood under different brand names in order to avoid direct competition. After the demerger of Greenply Industries, the businesses would be separately divided between promoters with Rajesh Mittal & his son Sanidhya Mittal looking after Greenply Industries while Shiv Prakash Mittal & his son Shobhan Mittal will be looking after Greepanel Industries. But the aforesaid demerger will have no impact on the operations of Greenlam Industries.
Shareholding PatternAs on March 31st 2019, the promoter & promoter group holds 54.74% holding in Greenlam Industries while the balance holding of 45.26% is held by the public that includes various institutions and non-institutions.
Shareholders holding more than 1% (Public)
Market ShareThe market share of Greenlam Industries in the laminates & veneer segment is mentioned below:
- Laminates: Greenlam Industries owns 13% market share of the organized sector (Organized sector is ~68% of total industry) in the domestic laminates business. In the export of laminates from India, Greenlam has a market share of ~33%.
- Decorative Veneer: In the decorative veneer segment, Greenlam holds ~11% share of the organized sector (Organized sector is ~53% of the total industry).
BrandsThe Company uses its name that is Greenlam as a generic brand name for all its product categories. But, for the new additions in the product portfolio, the company is using the following brand names:
Product PortfolioThe product portfolio of Greenlam Industries encompasses a large variety of surfacing product catering to various segments across various price points. A brief description of the product portfolio is given below:
Product PricingGreenlam offers its products in the mid-market & the high-market category. The mid-market products of the company are priced anywhere between 10-25% more than what the mid-sized companies/unorganized players offer. The company usually faces challenge of drawing more volume sales in the commodity trade products. These products are those which are not specified or recommended by the architect designers. This product line that includes the commodity based product faces stagnation, primarily due to the competition it faces from the unorganized segment, which are able to sell low or sub-standard quality of products at low prices than the company. The company has stopped participating in this segment in order to safeguard its margins.
Manufacturing CapabilitiesThe company has 2 manufacturing facilities in ‘Behror’ (Rajasthan) & ‘Nalagarh’ (Himachal Pradesh) and has a combined capacity of 14.02 million laminate sheets in total as on Dec 31, 2018. Other details relating to the company’s production capacity are mentioned below: The company’s board of directors have approved to enhance its Laminate capacity further by 1.6 million sheets in March 2019. After the rolling of this capacity, total capacity of Laminates of Greenlam Industries shall increase to 15.62 million sheets per annum.
Capacity UtilizationThe company has huge potential to increase its sales in Decorative Veneer, Engineered Wood floor & Engineered Door sets. The detailed utilization of capacity is given below:
Distribution NetworkGreenlam Industries in the past 25 years has created a wide network both at the National & International levels. In the company’s Indian operations, it has a huge network of over 14000 distributors, retailers & dealers who source material from 12 companies owned regional distribution centres. The company has 22 branch offices in India & over 500 professionals managing sales of the company. At International levels, Greenlam has spread its wings in more than 100 countries and has 13 offices internationally. With overseas Subsidiaries in countries like Singapore, USA, Europe & Thailand the company manages the worldwide operations through its 2 company operated distribution centres. In Central Europe, the company has not established any of its distribution channels & supply directly to the customers, while in some countries the company sells through the distributors. There are other markets where the company simply supplies to the OEM’s. Greenlam Industries ltd acquired ‘Decolan SA’, a Switzerland based company through its Singapore based subsidiary for under 1 million Swiss Francs. The newly acquired company service the markets of Italy, Netherlands, Belgium, France and Sweden apart from Switzerland. The company’s operations will further strengthen in the European markets with this acquisition. The acquisition would improve the combined strength of the company by increasing the revenue by around $6-$7 million in the coming 1-2 years.
Revenue BreakupThe overall revenue breakup (inclusive of Exports) of the manufactured goods sold by the company is described in the pie-chart below. The Company earns 34% of its revenue from the export activities. The major chunk of exports revenue is contributed by the exports of company’s laminates (68% of exports), which is followed by Veneer & Wooden doors. The main markets of the company’s exports are North America, United Kingdom, parts of Europe, West Asia, parts of Africa and South East Asia.
Raw Materials/Key InputsThe Company sources its raw material from all over the world and has an extensive supply chain facility looking towards a seamless flow of the company’s inputs as well as output. Raw Material cost forms over 56% of the total expenditure of the company. Out of the company’s total raw material consumption, around 62% of the raw material of the company is imported while the balance 38% of the raw material is sourced locally. The company imports nearly 100% of its raw-material for the manufacturing of Veneer The company largely has three key raw materials and these are:
- Paper– The Company needs varying thickness of paper for its application in Veneers & laminates. Paper forms nearly two-third of the total raw-material expense. The company uses two types of paper that is Design paper & Kraft paper. While the design paper is entirely imported, 20-25% of the Kraft paper (whose size is not available locally) is imported. The company imports high quality paper from Japan & Europe, unlike unorganized players which import cheap quality paper from China.
- Chemicals– A wide range of chemicals are needed in the manufacturing of laminates & veneers. These chemicals include Phenol, Melamine and Methanol among other chemicals. The prices of these chemicals are linked to Crude, although not directly and hence, are susceptible to huge price fluctuations.
- Wood– Various kinds of wood in the form of Hardwood & Softwood are needed for application in the manufacturing process. The company usually imports Hardwood for its application in the Engineered wooden floor and a special grade of Particle board known as Fire Rated Ply board from foreign countries for its use in the manufacturing of Engineered Door.
Key SubsidiariesIn February 2019, the BOD of the company approved the acquisition of ‘Decolan SA’, a Switzerland based decorative surfaces trader for approx Rs 7 Crores in cash. The transaction is expected to be completed by June 30, 2019.
Corporate ActionsThe Greenlam Industries has been paying a regular dividend, and has not issued bonus shares, right issues and never bought back the shares (since 2014) .
CustomersThe major customers of the company are from the Corporate, Education & Health, Retail, Real Estate and Hospitality sector. A brief list of some of the major customers of the company is given below:
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References: Annual Reports, News Publications, Corporate Announcements, Management Discussions, Analyst Meets & Management Interviews.
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