C2FO Plays a Significant Role in This Protective Gloves Manufacturer’s Strategic Business Decisions

Industry overview

There has been growing awareness around work safety in industrial manufacturing. The Ministry of Labor and Employment demands uncompromising safety and precautionary measures on the shop floor for worker safety. Industrial accidents are not only unfortunate but also extremely costly. They involve expenses in terms of lives, reimbursements, legal troubles, and work disruptions.

Concurrently, rapid industrialisation has caused a rise in demand for safety gear. The construction, assembly plant, automotive and heavy machinery equipment industries are the major driving sectors pushing the application and utility of safety gear.

Protective industrial gloves are the most commonly used wearables that prevent injuries. The industrial gloves safety market was approximately $5 billion in 2018 and is estimated to be $8 billion by 2025, with an expected 7% compound annual growth rate (CAGR).

Initial days of struggle

Marvel Gloves is a Mumbai-based manufacturer of industrial safety and protective equipment like gloves and PPE kits. While the marketing is currently led by Manal Farooq, it was the vision of his father, Mr. Farooq Abdullah to make high-grade safety accessible to every industrial worker in India. In 1980, a few months prior to Marvel’s establishment, Mr. Farooq Abdullah made a visit to Japan for the Textile Machinery Exhibition to explore new business opportunities in this sector. During those days, India had little to almost no focus on worker safety in industrial setups. However, Mr. Farooq believed that going forward, safety regulations would become more stringent and consequently lead to a huge demand for safety equipment all across the country.

Soon after the Japan visit, the first set of machines was imported and Marvel commenced operation at Ankleshwar, Gujarat. However, the lack of demand at the time made scaling up the business an arduous task. The next four years for Marvel were years of struggle, but the scenario was reversed after the dreadful 1984 Bhopal Gas Tragedy.

The disaster was a wake-up call for the industry and policymakers alike. The Indian manufacturing industry realised the true horrors of substandard operating procedures and inadequate safety measures. Both action and intent in the direction of work safety picked up momentum. The 1980s was also the decade of the first wave of liberalisation in India, when foreign companies like Suzuki, Honda Group and Mitsubishi entered the country with new business opportunities.

Emergence as a market leader

Industrial safety standards were made more stringent after the Bhopal disaster, and the new foreign entrants already had uncompromising standards with their work safety regulations. This positive change in the industry favouring work safety led to an increased demand for high-quality safety equipment, and Marvel Gloves was ready for this demand surge.

It was the only company in India that could manufacture products equivalent to international standards and had four years of experience manufacturing products at the desired quality. This was the beginning of Marvel Gloves’ emergence as a market leader in the industrial safety equipment sector. Marvel Gloves hasn’t looked back since then. Over the years, Marvel witnessed impressive growth, and as of this date, has its manufacturing setups at Ankleshwar in Gujarat and Mumbai in Maharashtra. Presently, it does business with 600-650 companies, exports products to 18 countries, including the top multinational corporations, and employs 350-400 workers in India.

The growth and expansion phases

In business, any remarkable growth needs to be sustained with adequate preparation and upgrades. Therefore, the surge in market demand required Marvel to scale up operations and strengthen its manufacturing capacity. This required an infusion of not only fresh ideas but also working capital and investment. Also, factors such as drawn-out processes for environmental clearances and fewer working days cut down the up-time and caused major setbacks in overall output.

In 2014, Manal Farooq made a calculated and well-thought move towards international expansion and tie-ups. It was a strategic move and factored in both local and international government policies and regulations. Manal went on to set up three joint manufacturing plants in China, one plant in Sri Lanka, and three more plants in Malaysia.

Managing the cash flow with the C2FO advantage

While Marvel Gloves has found an efficient way to run and expand its capital-intensive business through national and international joint ventures and partnerships, working capital and cash flow management still remains a major requirement in terms of sourcing raw materials, administrative expenses, and machinery purchase and maintenance.

Besides the above, there are numerous unpredictable factors like import duties, the cost associated with delays in imports and the fluctuating cost of raw materials that adversely affect cash flow. Manal was looking for a solution to better manage working capital when C2FO entered the picture as an immediate solution to Marvel’s cash flow issues.

With the C2FO Early Payment platform, Manal can now meet the increasing market demand by using the early payment funds to their best advantage. Manal admits that the enhanced cash flow has helped Marvel rebuild its inventory and secure a firm footing in the market. Marvel’s relationship with its clients has improved since minor delays in payment and longer-than-usual credit cycles are sometimes compensated by early payments from the C2FO platform.

The Marvel Gloves team finds the C2FO platform to be very intuitive and easy to use. The C2FO early payment solution has enabled Marvel to function efficiently and maintain steady growth in business. C2FO takes pride in the fact that it now features prominently in Manal’s future plans for Marvel.