In an interview with the CNBC-TV18, Greenply Industries’ Joint MD, Shobhan Mittal, revealed that the company has filed an application for anti-dumping duty probe in relation to imports of medium density fiberboard (MDF).
What does the import duty mean for domestic players?
Mittal clarified that the import duty of $64.3 per cubic meter will not be imposed throughout the US, as such an imposition depends on many factors including landing prices in India and cost to producers. Moreover, the duty will lower the gap between import and domestic prices, but the competitiveness will also depend on location of imports.
For instance, the importers belonging to port areas might be more competitive than domestic producers. For producers in inland areas, freight is an important cost element that makes imports less competitive than domestic players.
The current price gap between MDF and landed cost varies from product-to-product and cost-to-cost, which can range from 5% to 10% based on grades and products, noted Mittal. In absolute numbers, the average MDF realization range in between Rs.16,000 and Rs.17,000 per cubic meter.
No plans to increase price
Mittal is hopeful that the import duty will be implemented within a month of 45 days and expects the matter to be taken up by the finance ministry. Though the company’s existing plant is running at close to 100% capacity utilization, the company is prepared to push this capacity to 115% using the right product mix, said Mittal.
He is optimistic that pushing the right products in the market will lead to higher capacity utilization. However, Mittal ruled out the possibility of increasing prices as the company wants to close down the gap that exists between them and foreign producers. Thus, the company will maintain its prices while opting to push the capacity utilization.
Greenply Industries Ltd is currently trading at Rs. 220, down by Rs. 0.2 or 0.09% from its previous closing of Rs. 220.2 on the BSE.
The scrip opened at Rs. 233 and has touched a high and low of Rs. 234.8 and Rs. 220 respectively. So far 778845(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 2657.41 crore.
The BSE group 'B' stock of face value Rs. 1 has touched a 52 week high of Rs. 225.9 on 25-May-2015 and a 52 week low of Rs. 152 on 18-Jan-2016. Last one week high and low of the scrip stood at Rs. 224 and Rs. 208 respectively.
The promoters holding in the company stood at 55 % while Institutions and Non-Institutions held 23.58 % and 21.42 % respectively.
The stock is currently trading above its 50 DMA.