Calcutta, Aug. 7: Century Plyboards plans to invest Rs 380 crore to set up a medium-density fibreboard plant at Hoshiarpur in Punjab.

The Calcutta-based company has incurred a capital expenditure of Rs 55 crore as on June 30, 2016, and plans to start production early next year.

Medium-density fibreboard is a cost-effective alternative to plywood and is mostly used to manufacture furniture.

"At present, there are very few manufacturing units of medium-density fibreboard in the country, but its demand is growing steadily. We are setting up a plant at Hoshiarpur in Punjab with a capacity of 600 cubic metres per day. The area nearby is rich in plantation timber, which prompted us to select the location for the plant," said Sajjan Bhajanka, chairman of Century Plyboards India Ltd.

"The plant is expected to be commissioned in July next year but our internal target is February 2017," he said.

Key investment

The investment in the Punjab plant forms more than half of the total capital expenditure of Rs 615 crore estimated till 2018-19.

Last month, the company began commercial production from its particleboard plant in Chennai.

The plant has been set up at an investment of Rs 58 crore and has a production capacity of 180 cubic metres per day.

As on March 31, 2016, the company makes around 210,000 cubic metres of plywood at its facilities in Bengal, Assam, Haryana, Tamil Nadu, Gujarat, Uttarakhand as well as Myanmar.

Rival Greenply Industries is also setting up a medium-density fibreboard unit in Andhra Pradesh, which is likely to start production in the second half of 2018.