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Greenpanel Industries Ltd.

BSE: 542857 Sector: Others
NSE: GREENPANEL ISIN Code: INE08ZM01014
BSE 00:00 | 21 Jan 472.85 -13.65
(-2.81%)
OPEN

485.55

HIGH

489.70

LOW

470.00

NSE 00:00 | 21 Jan 473.05 -14.40
(-2.95%)
OPEN

480.00

HIGH

489.80

LOW

470.00

OPEN 485.55
PREVIOUS CLOSE 486.50
VOLUME 27747
52-Week high 491.95
52-Week low 150.30
P/E 31.69
Mkt Cap.(Rs cr) 5,797
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 485.55
CLOSE 486.50
VOLUME 27747
52-Week high 491.95
52-Week low 150.30
P/E 31.69
Mkt Cap.(Rs cr) 5,797
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Greenpanel Industries Ltd. (GREENPANEL) - Chairman Speech

Company chairman speech

The Chairman's overview

Even though we have been We believe that governance is the framework around which thebusiness will be developed leading to the generation of sustainable value for all ourstakeholders. in existence for a little over two years the promoters of the Companypossess a track record of having growing related businesses around governance in the pastthat helped enhance stakeholder value. The transmission of those tested and demonstratedvalues has served as a foundation for Greenpanel in addition to our standalone priorities.The combination makes the governance foundation of our Company comprehensive customisedand contemporary.

At Greenpanel our governance foundation comprises a number of priorities with whichone seeks to grow the Company across the foreseeable future.

The big picture: At Greenpanel the big picture is that we intend to build our Companyinto an institution. We recognise that this journey could be long and painstaking; we seekto bring to this overarching objective a complement of strategic clarity operationaltransparency blend of conservatism and aggression periodic investments cutting-edgetechnologies holistic stakeholder value-creation and a respect for health safety andenvironment considerations. The sum of these priorities can be encapsulated in one word:superior governance.

Board of Directors: At Greenpanel governance begins with the Board of Directors. TheCompany invested in a Board comprising individuals of repute and standing; the membersbring diverse competencies to the Board; the Board meetings are well attended and debated;the Board provides the strategic direction to the management coupled with periodicreporting accountability. The Company's Board comprises four independent Directors fromqualified backgrounds who possess rich domain expertise.

Culture of excellence: At Greenpanel we believe that an overarching culture ofexcellence is derived from components of excellence. No improvement initiative isconsidered too small; we believe that every good thing is inter-linked strengtheningmindsets and competitiveness.

Values: At Greenpanel we believe that an organisation managed around a defined set oftimeless values becomes sustainable across the long-term. These values need to be livedand demonstrated so that the governance commitment represents a calling that is visible toall. The Company extended beyond the regulation-mandated governance requirements of theday.

Singular focus: At Greenpanel we are principally an interior infrastructure companywith a predominant exposure to MDF (and plywood to a lower extent). A dominant productfocus deepens excellence attracts specialists enriches knowledge strengthens researchand enhances scale. In a world where an increasing number of customers seek to work withfewer vendors we see a growing importance for focused companies like ours.

Never over-leverage: At Greenpanel we believe that in a business with a large andgrowing potential there is always the temptation to mobilise large debt grow thebusiness aggressively and engage in aggressive pricing with the expectation to carve out adisproportionately larger market share. This is a temptation that we have avoided as webelieve that large sustained debt could influence our strategic thinking away from thevalues we have cherished – of remaining a focused quality- and knowledge-drivenplayer. Scale: At Greenpanel we address an attractively growing market. We establishedscale in this business to capitalise on economies of raw material procurementmanufacturing and marketing. We believe that by operating this scale with competence wewill possess a low break-even cost that makes us competitive across market cycles. In viewof this we expect to remain the last person standing during challenging downtrends andthe first to recover during sectoral rebounds.

Maximise productivity: At Greenpanel we believe that long-term competitiveness isinfluenced not as much by the physical backbone we may have invested in as much by thepeople infrastructure we would have nurtured. As an extension of this conviction werecruit with care orient employees around our DNA train deeply empower extensivelyappraise periodically and chart out career growth resulting in superior retention and theability to do more with less.

Processes: At Greenpanel we are a process-driven company that invested in ERP as atechnology backbone. We believe that this provides the Company with a uniform basis forinformed decision-making. The Company's business is driven by SOPs enhancingpredictability in decision-making the basis of business sustainability.

Financial hygiene: At Greenpanel we present accounts that can be trusted. We appointeda credible auditor to audit our accounts enhancing the credibility of our financialreporting.

Health safety and environment: At Greenpanel we believe that the most successfulcompanies are also the safest. The result is that the Company invested in the higheststandards of health safety and environment integrity. This ensures that the Company'soperations are safe for employees community and society. At our Company we believe thata complement of these priorities has translated into a different way of doing business.

Our ability to remain steadfast and committed to these realities will secure ourprospects strengthen stability and lead to sustainable growth.

I welcome you on this journey.

Shiv Prakash Mittal Executive Chairman

The Managing Director's overview

The combination of volume and value de-growth affected the profitability of all MDFplayers in India Greenpanel included.

Overview

At Greenpanel we believe that we are passing through a period of unprecedenteduncertainty. This uncertainty was compounded by an economic slowdown within India and theworld coupled with the Covid-19 pandemic that affected consumption and consumersentiment.

As a market-facing organisation we were affected by the slowdown and lockdown acrossmarkets.

We were also affected by increased competition arising out of enhanced manufacturingcapacities. In a market where sales were sluggish realisations declined. Besides anumber of small unorganised players worked outside the GST net disturbing the industry'sstability. The combination of volume and value de-growth affected the profitability of allMDF players in India Greenpanel included. Given these realities the Company performedcreditably. The Company reported a 45% increase in revenues which outperformed the growthof the MDF sector in India. The Company retained its sectoral leadership.

Greenpanel's listing

Greenpanel was listed on the Indian stock exchanges on October 23 2019 following itsdemerger from Greenply which effect from April 1 2018.

We believe that we will enhance value for our stakeholders through a combination ofsectoral leadership brand visibility and responsible governance.

We believe that the listing will prove to be a game-changer in enhancing the Company'svisibility helping open doors and widening opportunities.

We also recognise that by being listed we will now be benchmarked with some of thebest companies in India in terms of operating standards strengthening our commitment.

Building the business

This market uncertainty coincided with the business-building phase of Greenpanel. TheCompany engaged in creating a proprietary distribution network from scratch. We overhauledour sales and marketing teams. We engaged in timely recruitment to respond with a neworganisational structure. We believe that this foundation is now growth-ready and shouldbe scalable over time At Greenpanel we are optimistic of weathering the prevailingchallenges for a number of reasons.

MDF our principal product represents the building material of the future for itssuperior price-value proposition. Greenpanel is the only MDF company in India with twomanufacturing facilities equipped to address demand coming out of Northern and SouthernIndia. The former plant focused on demand coming out of the Northern and Eastern markets;the Andhra plant addressed the Southern Central and Western zones as well as exports.

Greenpanel leveraged its scale competitiveness proximity and availability to counterimports.

Greenpanel deepened relationships with large OEMs generating substantial volumes.

Greenpanel educated consumers on the superior MDF attributes helping replace competinglower-priced plywood varieties. Greenpanel positioned itself as a global playergenerating 22% revenues from the export of MDF to markets like Dubai Singapore Sri Lankaand ASEAN where MDF is preferred to plywood as a building material.

Greenpanel entered into product supply engagements with prominent OEM customers likeGodrej Shapoorji Pallonji and Amazon strengthening our credentials.

Greenpanel worked closer with category influencers like carpenters and architectscoupled with exhibitions in prime locations to showcase products to prospective clients.

Greenpanel entered into a contract with a Korean marketing company to collaborate inbuilding a series of products that could graduate the Company into a global householdbrand.

Outlook for FY2020-21

At the moment it would be difficult putting an estimate on how we expect . to performthe current financial year. Our performance will depend on how soon the Indian and globaleconomies normalise following the pandemic.

There are some latent points of optimism within the challenging environment. Virtuallyevery government the world over – including India – is committed to revivingconsumer demand. The Indian government announced a large financial package of H20 lakh crcoupled with downstream reforms directed at enhancing consumer sentiment. We believe thatthis will be an important inducement for people to build or renovate their homes andoffices.

We are optimistic that the government has focused on a reduction in the cost of financefor the rural and economically weak Indians. As the benefit of a decline in the cost ofhome financing widens we believe that home building could recover strengthening theofftake of our products. We are cautiously upbeat as a number of smaller competitors (fromwithin the MDF and plywood spaces) players have closed down following the lockdown. Thereis a possibility of the collective market sentiment leaning towards MDF viewing it as the‘best alternative' to plywood.

Should the anti-dumping law be cleared by the Government of India to counter duty-freeimport of cheap MDF the industry sentiment could revive. Besides the 2020-21 UnionBudget recommended the imposition of import duties on ready-made furniture strengtheningthe case for domestic resource manufacturers like Greenpanel.

Overview

While it is too early to estimate how the Company will perform during the currentfinancial year the Company will leverage the advantages of brand assurance organisedmanufacture and the highest quality standards.

We perceive the prevailing uncertainty as an opportunity to build the business withpatience and prudence strengthening our sustainability.

Shobhan Mittal

Managing Director and CEO

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