SYLVAN PLYBOARD (INDIA) IPO Review - Issue Date, Price, GMP, Allotment, Lot Size, and Details

About SYLVAN PLYBOARD (INDIA) Limited

Syvan Plyboard (India) Limited was incorporated in the year 2002, the Company is engaged into manufacturing of various wood products such as plywood, block board, flush door, veneer and sawn timber across various grades and thickness. In the year 1951, Jai Prakash Singh (Whole Time Director of the company and father of their promoter) through his proprietorship concern, M/s. Singh Brothers & Co., started the business as a trading concern of indigenous timber logs and subsequent selling the same in Indian market. Leveraging the knowledge of timber products and domestic market, in the year 2004, the Company acquired ongoing business of M/s. Singh Brothers & Co. (Proprietorship Firm). Over the period, after establishing themselves in trading of timber products, they diversified their activities to manufacturing activities by setting up an integrated manufacturing facility in Baidyabati, West Bengal located near Kolkata which is spreading over an area of approx. 11.61 acres (5,05,732 sq. ft.).

They are dedicated to constantly expanding and updating their product range in order to stay ahead in the market. Their range of products under their manufacturing capabilities is summarized as under:
• Plywood, Block Boards & Flush Doors
• Veneer
• Sawn Timber

The Company markets its products under the brand name of “Sylvan”, through its network of Authorized Dealers and Authorized Sub Dealers. As on the date of this Prospectus, the Company has 223 Authorized Dealers present across 13 states. They have more than 12 numbers of plywood products in their basket, thickness ranging from 4 mm to 40 mm. Plywood segment (including Block Board and Flush Door) contributes approx. 81.74% of their revenue from operations. The Company has large range of product offering to wide range of customers, “Sylvan Z+ Premium Plus” is the most premium plywood product of their Company amongst other offerings in premium segment. They have “Robusta Premium” & “Primo Plus” for middle segment and “Sylvan Blu” which is aimed at lower class segment with a view of addressing the growing demand of cheaper plywood and their alternatives. They also offer Boiling Water Proof (BWP) and Boiling Water Resistant (BWR) plywood. Their range of plywood products caters to various customers across various segments.

INDUSTRIAL ROUNDWOOD

Production of tropical industrial roundwood (“logs”) in ITTO member countries totalled 279.1 million m3 in 2021, slightly less than the previous year, with Indonesia, India, Viet Nam, Brazil, and Thailand accounting for about 74 per cent of total ITTO production. Although many producer member countries show consistent production during the period 2020 to 2022, this generally reflects the insufficiency of data provided by members20 and hence the estimates must be considered tentative. Production in 2022 is estimated to moderate to 280.6 million m3.

India was ITTO’s second largest tropical log producer, with production totalling 48.0 million m3 in 2021 and 2022. About 2 million m3 is produced from state-owned forests where the harvesting is severely restricted, with the remaining volume sourced from trees outside forests21.

The Asia-Pacific producer region produced about 76 percent of ITTO producer members’ tropical hardwood logs in 2021. Latin America’s share of production was about 15 percent, with the African region accounting for the remainder (about 9 percent). During the period 2021 to 2022 production declined marginally in the African region while Asia-Pacific and Latin America/Caribbean production had increased. These trends may, however, reflect the quality of information provided, as only a few member countries provided reliable estimates for this period.

SAWNWOOD OUTLOOK

Production of tropical sawnwood in ITTO producer member countries accounted for 72 percent of world tropical sawnwood production in 2021 and totalled about 51.2 million m3. Production remained at about the same level in 2022, at 51.5 million m3. Nearly 80 percent of production in 2021 in ITTO producer countries was in the Asia-Pacific region, while Latin America/ Caribbean and Africa accounted for 11 percent and 10 percent respectively. There are several countries in the Asia-Pacific region with relatively large production levels – notably India, Viet Nam, Thailand, Malaysia, Indonesia and Myanmar (in descending order by volume), although the accuracy of data for the Asia-Pacific region continues to be impaired by the lack of information provided by India which is the largest producer in the region. Tropical sawnwood production in Latin America has fluctuated in recent years, with production totalling 5.5 million m3 in 2021, a marginal increase on 2020. Brazil accounted for 54 percent of the region’s production in 2021, with Peru, Ecuador, and Costa Rica, also being important producers.

VENEER OUTLOOK

Production of tropical veneer in ITTO producer countries increased year-on-year from 2017 to 2019, when production amounted to 5.742 million m3. In 2020, production declined by 5 percent before surging in 2021 to 7.457 million m3 and remaining at that level in 2022. Although production figures should not include veneer used in domestic plywood production, this distinction is often ignored because most veneer production is destined for the plywood industry and the volumes of decorative veneers produced and traded internationally are minimal. The Asia-Pacific producer region (not including China) produced over 5.974 million m3 of tropical veneer in 2021, Africa produced 1.101 million m3 and Latin America produced 0.382 million m3. The top five tropical veneer producing countries comprised about 66 percent of ITTO veneer production in 2021. ITTO consumer countries produced 679 000 m3 of tropical veneer in 2021, increasing marginally in 2022 to 684 000 m3 in 2022.

PLYWOOD OUTLOOK

Production of tropical plywood in ITTO member countries increased year-on-year between 2016 and 2021, and amounted to 49.2 million m3 in 2021, declining in 2022 to 48.4 million m3. Tropical plywood production in ITTO producer countries continues to be affected by substitution by softwood and temperate hardwood plywood and other panel products, rising production costs and a diminishing supply of tropical peeler logs in many producer countries. Tropical plywood is defined by the composition of the “face” veneer only, with a growing trend towards tropical plywood boards comprising only one tropical veneer face rather than all-tropical veneers.

India’s tropical plywood production is based largely on imported tropical logs and has also expanded significantly over the last decade, growing year-on-year between 2016 and 2019 and amounting to 10 million m3 in 2019. Production has moderated at 10.0 million m3 annually between 2019 and 2022. India’s tropical plywood production typically uses species such as: keruing (gurjan) from Myanmar for face veneer; balau, merbau and keruing from Malaysia; teak from Myanmar and other suppliers; and domestic plantation species for core veneer. In 2023, plywood manufacturers have reported cuts in production in response to limited raw material supplies and increased input prices, particularly resin, with plywood mills reporting competition for raw materials with new MDF and particleboard plants.

SYLVAN PLYBOARD (INDIA) LIMITED STRENGTHS

1. Brand Recognition
2. Wide dealers’ network
3. Large & Integrated manufacturing facility
4. Locational Advantage
5. Entry barrier
6. Specialised product portfolio
7. Experienced management team
8. Quality assurance and accreditations
9. Research and Development

SYLVAN PLYBOARD (INDIA) LIMITED STRATEGIES

1. Increasing plywood production
2. Increasing focus on lower-middle class segment
3. Increasing dealership network
4. Cost reduction initiative
5. Increasing marketing activity
6. Automation of manufacturing facility

SYLVAN PLYBOARD (INDIA) LIMITED RISK FACTORS & CONCERNS

1. The Company is yet to place orders for the machinery for the expansion of the Manufacturing Facility.
2. They majorly sell their products in West Bengal.
3. Expansion into new geographic regions and markets may subject them to various challenges.
4. In past the company had experienced fire mishap in their manufacturing facility.
5. Their business growth is partially dependent on the growth and development of construction real estate industry.
6. The Company maintains high level of inventory for uninterrupted production activities
7. The cost of production is exposed to fluctuations in the prices of raw material prices, particularly Timber.