Sajjan bhajanka has the sniffles. Temperature variations from a whirlwind multi-city tour following the launch of their expanded Hoshiarpur factory in early February has given the 71-year-old Chairman of wood panel company Century Plyboards, a cold, a minor inconvenience considering he is racing towards a Rs 5,000 crore-revenue target by FY26.
That means nearly doubling the Rs 3,000 crore-plus top line Century generated in FY22—that took it nearly 36 years to achieve—within four years. This also translates into a CAGR of 14-15 per cent, that too, without taking any debt and relying entirely on internal cash flows from making and selling doors, plywood, laminates, veneers, MDF (medium-density fibreboard) and particle boards under multiple sub-brands. Not an impossible feat for the debt-free company given its strong balance sheet and diversified portfolio, say analysts tracking the firm.
“All our companies—Century Plyboards, Star Cement, Shyam Century Ferrous—are debt-free. We are a little conservative, because we seldom went out from our prime area of wooden panels and laminates,” says Bhajanka, seated across a busy wooden desk in his swanky seventh-floor office in Kolkata’s Taratala. Framed by sundry books, figurines and photos, he says in measured tones, “All our promoters are very simple. Their personal requirements are very less.” The promoters own 73 per cent of the company—almost the maximum permissible limit.
Growing up in the plywood hub around Assam, getting into the trade himself was but natural for this economics graduate. But his first venture out of college left him penniless within two years, after a fallout with his cousins. “I started with minus Rs 5,000,” he says, his otherwise solemn face breaking into a smile. Several smaller plywood and veneer ventures and nearly 10 years later, a mutual acquaintance led him to meet current MD & CEO Sanjay Agarwal, who was setting up a panel door factory in 1986. “When I saw the plot and the factory, it was like love at first sight,” says Bhajanka. The two eventually built their venture up into what is today Century Plyboards.
Now, it is the largest plywood player in India, with a 25 per cent share in the organised market; it is among the Top 2 players in the laminate category; and among the Top 3 in the MDF category. An ICICI Securities report from March 2023 says that Century is expected to witness revenue and profit after tax (PAT) CAGR of 16.5 per cent and 16.1 per cent, respectively, between FY22 and FY25E, supported by a strong balance sheet and impressive return ratios. “With its comprehensive product portfolio, strong brand and wide distribution reach, the company is well placed to capitalise on the demand pick-up in the housing sector,” the report states. Riding on these strengths, Bhajanka has emerged the winner in the Consumer Goods category of the BT-PwC India’s Best CEOs ranking.
Not a big believer of killing the competition through irrational growth strategies, Bhajanka opted for gradual expansion suited to his selling capacity. Currently, the company’s nine domestic factories are located across West Bengal, Tamil Nadu, Haryana, Assam, Gujarat, Uttarakhand and Punjab. In fact, until the mid-1990s, Century allowed competitors to visit its factories and understand its secret sauce of R&D and innovation. For instance, when it successfully implemented thermal fluid heating of plyboards to drive up productivity, executives from competitors such as Kitply Industries made trips to its factories. “After that, people who came to our factories started poaching our people by giving their cards on the factory floor. Seeing that, we stopped,” says Bhajanka.
Incidentally, Century has always been ahead of the market in positioning itself as the destination of category-creating innovation. “It hit pay dirt even during the pandemic by creating a new segment of ViroKill ahead of competition. Others were followers,” says an analyst tracking the firm, requesting anonymity.
Essentially, the virus-resistant chemical made of silver, Bhajanka says, was first introduced in laminates because they were used in hospitals. “When there was the Covid-19 virus all around, our internal team decided to try it on plywood.” Despite the costly price tag of the chemical, Bhajanka says, they did not hike prices. “But we more than made up through higher sales.”
In 2020, it brought in management consulting firm BCG to improve cost efficiencies, something analysts say was not usual in the industry. “There is always scope for improvement. None of our existing promoters are foreign-educated. We all are simple graduates. Whatever we could learn, we have implemented,” Bhajanka says, adding that it has helped them.
“Now also, a lot of expenses are going on,” he says. The firm’s FY22 annual report pegs Rs 980 crore in capex between FY23 and FY25, of which Rs 640 crore is marked for MDF manufacture. The report has him saying that the company has embarked on a series of concurrent, rather than sequential, expansions across factories to reach its ambitious top line goal. But he isn’t too keen to take on any term loan for this, he says. The plan is to open a line-of-credit for three years. “Even that we will repay through self-generation,” he adds, confidently.
Bhajanka will be at the helm of affairs at least till FY26, by when he expects to achieve Rs 5,000 crore in revenues. Eventually, his son Keshav and Agarwal’s daughter Nikita Bansal—who are Executive Directors currently—will replace them. “[My three] other daughters will not enter the business. They will get equity,” he adds.
By the end of our hour-long conversation, Bhajanka’s phone has rung several times, making him restless to leave for his meetings. Packed days are common and time management is key. “I hardly sign any cheques for Century Plyboards,” he says, as all his executives have financial powers. He only makes an exception for the several social organisations he is associated with. “In my early 50s, I decided not to defer social work to later in life. So, 30 per cent of my time is for social welfare and 70 per cent is for work.” What about personal time, I ask. And he says with a chuckle, “Evenings are free,” adding that he manages to pack in a round of rummy with his wife, chess with his six-year-old granddaughter and TV time on most days, with two family vacations a year.
As he gets ready to leave, he says: “Only three minutes left for the photo shoot.” And he is gone in a blink. After all, the 15 per cent CAGR target beckons.
@SaysVidya
