Neo Rubber Products Manages Its Cash Flow With the Help of the C2FO Early Payment Platform

Early days

Jitendra Kewalramani, a diploma holder in computer technology, went through an interesting journey of building a strong brand name for Neo Rubber in the industry. Looking at the potential that this industry held, he realised that to scale up the business in the future he would need an in-depth knowledge of the materials, industrial processes and other internal operations regarding rubber manufacturing. With this in mind, Jitendra immediately enrolled himself in a three-year rubber technology course, and by the age of 27, he was ready to take on the mantle of growing Neo Rubber Products.

From 1996 to 2008, the Kewalramanis organically built contacts in the industry. They supplied their products to small regional clients and slowly kept building their product catalogue to cater to as many clients as possible.

After experimenting with a wide range of products for a few years, Jitendra decided to position Neo Rubber Products specifically in the pipes and fitting industry, with specialty manufacturing of rubber rings. Neo Rubber Products found its big break in 2008 when it roped in Astral Pipes as a client.  

Rubber rings formed a crucial part of the supplies required by the pipes and fitting industry, and Neo Rubber Products ensured that the delivery timelines and product quality met Astral’s expectations. Astral Pipes’ trust in Neo Rubber Products grew over the years and was profitable for the company in terms of huge order quantities.

Building the company from the ground up 

Jitendra focused on adopting the latest technologies to achieve high-level production efficiencies. He knew that the kind of growth he desired wasn’t possible through manufacturing processes that were heavily dependent on manual intervention. He turned labour-oriented manufacturing operations into automated processes that yield higher outputs in less time. What 120 workers achieved earlier is now possible with merely 40-50 workers. A significant reduction in labour costs was a benefit that Neo Rubber Products accrued by default as a direct result of the automation of its setups.

Rubber product manufacturing is highly dependent on the accuracy of temperatures throughout the process. So automation was an inevitable step to acquiring growth and scalability. In 2003, Neo Rubber adopted semi-automatic machines, and by 2008, they became fully automatic, which drastically increased the company’s production capacity.

According to the Equirus Research paper on Prince Pipes, the Indian plastic pipes industry is estimated to be around ₹400 to ₹420 billion and pegged to grow at an 11%-12% compound annual growth rate (CAGR) from FY21 to FY25. Neo Rubber stands well prepared to ride this wave of growth in the coming years. Nineteen years of business and some very crucial strategic decisions have transformed Neo Rubber from a company having a couple of small setups in Bhandup and an office in Mulund to four manufacturing units in Bhiwandi spread across 22,000 square feet with 300 moulds that produce 70 tons to 100 tons of final output.

The decision to automate the manufacturing processes helped Neo Rubber Products to acquire ISO and WRAS (UK) certifications, which further helped the company to supply its products to foreign markets. Neo Rubber Products started exporting around 2013-14, and currently, 70% of Neo Rubber’s products are sold to domestic clients, whereas 30% of supplies are exported to international markets.

Raw materials required for rubber product manufacturing are expensive, especially base polymers. These rubber base polymers are a critical part of the manufacturing process. Jitendra wanted the end product to be of the finest quality. Keeping that in mind, he imports nitrile rubber from Russia and EPDM rubber from Taiwan, Japan, Germany and the United States. Such emphasis on quality has helped Neo Rubber to retain clientele and build good relations across the industry with clients like Supreme, Jain Irrigation, SWM and many more.

C2FO’s role in managing cash flow

Jitendra was introduced to C2FO via Astral Pipes in 2020. Neo Rubber Products has been using C2FO’s Early Payment platform and has discounted several invoices since then. Being a manufacturer that deals with vendors and clients at the same time, the payment cycles on both sides almost never coincide to automatically maintain a healthy cash flow for the company. C2FO helps Neo Rubber Products compensate for such irregularities in payment cycles. 

Jitendra mentions a specific instance during the pandemic when Neo Rubber Products was facing a cash crunch and early payment came as a relief. C2FO’s Early Payment platform helped the company maintain amicable partnerships with its vendors via timely payments and efficiently manage the cash flow in the company. Apart from his team, Jitendra often operates the C2FO platform himself and loves the interactive user experience. He emphasises the fact that C2FO is the best available early payment option in the market at present considering how easy and quick it is to use.

Future plans

The Indian construction market is expected to grow at an average annual growth rate of more than 6% from 2023 to 2026. This will directly lead to increased demand for pipes and fittings-related products. Neo Rubber is planning to extensively invest in quality check and research equipment and machine infrastructure. The company has a patent on the Tight Fit “Fix-o-Ring”. These are customised-sized rubber rings manufactured per the client’s requirements and used in domestic, industrial and large-scale projects.

Apart from this, Neo Rubber Products is also expanding its product catalogue to other pipe-fitting products like lubricants, solvent cement and metal clamps. Such expansion requires meticulous financial planning and Jitendra thinks that C2FO will play a crucial role in his future plans for Neo Rubber Products.