How Century Ply Is Dealing With A Volatile Rupee
Century Plywood Ltd. is banking on increased prices and exports to offset the impact of costlier raw material imports and its exposure to dollar denominated debt as the Indian rupee continues to tumble to new lows.
Imported raw material costs, mainly of logs, for the company is about 15 percent of its total turnover, according to Sanjay Agarwal, MD and CEO of Century Plywood. “So with a 10 percent currency depreciation the impact should be 1.5 percent on Ebitda,” he told BloombergQuint in an interaction. “But we have taken certain actions by increasing prices of certain items by 1-2 percent. So we see a very slight impact.”
Agarwal added that the company has about $27 million of dollar-denominated debt. However, $17 million is already booked at an exchange rate of about 69. “So only $10 million is exposed,” he said. “But we are also exporting about $14 million of goods every year so we’ll get that kind of natural hedge within the company itself.”
Watch the full conversation here: