Get ready to be floored

The word Action that was synonymous to shoes so far found a new interest in the business of wooden floorings recently. An affable, Mr. Ajay Aggarwal, Director, Action Group, talks to Aadeetya Sriram of his contribution in catapulting the company to the reverberating success route and also foot maps the structure of this new diversion. Here’s a dekko,

Aadeetya Sriram (AS): Action Group has come a long way since its inception into the footwear industry. What all other segments have you covered in the country?

Ajay Aggarwal (AA): Action Group is a 30 year old conglomerate, having started its journey with shoes in 1975, has in its long voyage become the largest footwear-making company today.

At present we are visible in the electronic segment with Microtek, and we also have our battery brand, Okaya. Action group also has two integrated steel plants, one in Raipur and one in Orissa. We also produce chemicals and infact we are the distributors for trading of chemicals. We also deal in real estate at the present; we have lots of residential projects, commercial projects and hotel projects in the pipeline by the name of Sun City Projects.

AS: How did Action-Tesa come into the fore?

AA: When we forayed into real estate in the country, we realized the potential of this segment and that there is a scope for affordable housing that has been visible for the past 4-5 years. So the products that we have brought in with Action Tesa, is basically for the affordable-housing sector. We have come with particle board and MDF; we are the first ones in the country to have plant for thin MDF particle, and this is the perfect substitute of plywood. This is already being used at a larger extent in the other countries which constitutes about 90% for furniture and plywood is 10%. Whereas in India, its 20% MDF particle board and 80% plywood.

AS: What sort of advantage does the MDF particle board provide?

AA: The advantage of MDF and particle board is manifold, since it’s a mechanized product, compared to plywood which is a labour-oriented product, so the benefit of machinery results in higher production capacity. It is also 60% cheaper than plywood, and it is for mass-market, and it has melamine paper on it, which enables you to have designs imprinted on your boards, but now the bigger manufacturer are slowly and gradually realizing the kind of cost-effective yet high-qualitative product is MDF and particle board. We have the largest MDF and thin particle board plant in the country.

AS: What made you enter into the wooden-flooring segment?

AA: After successfully introducing MDF and thin particle board one year back, we initiated our plan with laminated wooden-flooring in the country. We have the largest wooden-flooring plant in the country, traditionally earlier, only tiles, granite were chosen as a product for flooring. The biggest drawback of these products is that they are very-expensive at about Rs 300 per sq. ft, whereas laminated flooring is just Rs 50-60 per sq.ft and the kind of aesthetics one gets with wooden flooring is impressive. We have a backward integration which enables us to produce the fibers, we assure quick-delivery process, and we provide warranty for stain, fading, quality and lock.

AS: What products do you have in Action Tesa?

AA: We have light-laminated floorings, we have door skins, the ones already present in the market are made up of timber, plywood which is very expensive as a raw material. But with MDF particle board, you can get these skins integrated to your floorings and give an aesthetic feel to it that resembles the feature of timber. Our products are 85% cheaper than the timber products.

AS: Are these products available in the market?

AA: These products have been made available in the market since last one year. These flooring products have been there since 5-6 years, but either they were imported or the quality that existed was not of high- standards. But since our entry into this segment and being equipped with our own production plants, we basically aim to provide high-quality products at an affordable cost.

AS: What is the sort of production capacity, your plants undertake?

AA: The flooring market in the country is valued at Rs 600cr at present. Tiles and marble market is valued at Rs1500cr.The industry is expected to go grow 3times every year. Our target is to attain 25% of the market share. We produce 80,000 cubic meter of sheets per month, and 200 cubic meters per day for MDF and 250 cubic meters per day for particle board.

AS: How has Action Group fared financially with Action Tesa?

AA:  We expect to attain turnover of Rs 140cr this year which is growth of 35% compared to last year. We started with our plants last year, and to our satisfaction the plants are meeting the production needs quite easily.

 AS: Do you have any retail plans for Action Tesa?

AA: For flooring, the brand name would remain Action Tesa.  We will be providing all the retail chain stores with our products, so that they can deal in an organized set-up for residential, commercial projects. We plan to tie-up with brands such as Ebony Gautier, Home Town etc. We will give them our standings. We have plans to start our own retail stores as Action Tesa World for interiors starting with Delhi, Bangalore and Mumbai. These will be operational within one month as display stores for our products and not a sales-oriented store. Our selling-point will be through our distributors.

AS:  What is your marketing strategy for Action Tesa?

AA: Our strategy is to provide quality products at an affordable price range. We also have a rigorous ad-campaign that stated that MDF is a perfect substitute for plywood and cost-effective, through TV channels.

AS: What sort of training do your labours go through?

AA: We have 3 Germans in our plant from the manufacturing side, training people regularly for the past 1 year. We had a prior arrangement with them for period of 1 year initially but looking at the progress their training methods have provided us, we extended their agreement, so as to gain their sense of knowledge and expertise about the products. We also have 4 Chinese people training different man-power. 

(AS): Who are you catering to with Action Tesa products?

(AA): Our target customers range from builders, kitchen- manufacturers to residential house-owners and also door-manufacturer for our door skins. One of our reputed clients is Godrej.

(AS): Any environmental hazards that these products have?

(AA): The wood that we use is agro-timber, which is environment friendly; we have a green certification, which you don’t get in plywood. We have UV coated particles which are eco-friendly. There is a Carb rating which is not so known in our country, but countries abroad value carbon rating very highly.