One of IKEA’s first Indian suppliers, this PU foam brand clocks Rs 210 Cr turnover
An entrepreneur at heart, rubberised coir supplier Bhagwandas Malani chose to start his own mattress manufacturing unit in 1988. Seeing a lack of organised players in the growing mattress market, Malani decided to fill the gap and started the Shree Malani Group and Centuary Mattresses.
In 2008, the group launched Shree Malani Foams and began manufacturing foams under its Cenflex brand.
At the time, premium categories of foam were almost non-existent in the market with a handful of large players such as Sheela Foam. This proved to be a lucrative business opportunity for Telangana-based Shree Malani Foams.
“The premium category had not been promoted by many Indian manufacturers of PU foams. We took up the daunting task of creating the category ourselves. Hence, we decided to position Cenflex in the premium category,” says Siddharth Malani, Managing Director of Shree Malani Foams, in an interaction with SMBStory.
Siddharth Malani, MD, Shree Malani Foams
Until then, PU foam was a commodity, and generally not branded. Shree Malani Foams was one of the first to introduce branded foam and pioneer technical grade foam for applications in automobile, lamination, clothing, lingerie, packaging, etc., claims Siddharth.
The growth story
Shree Malani Foams timed its move right. PU foams have a wide range of applications in upholstered furniture, mattresses, footwear, etc. Over the last decade, the demand for good quality foam for all such applications increased, and Shree Malani Foams was well-positioned to meet it.
Creating a premium foams category turned out to be a game changer for the business. It started becoming the go-to firm for premium and technical grade foams, and scored partnerships with multiple international suppliers and buyers.
In 2018, the company formed a partnership with Swedish furniture giant IKEA for mattresses, and claims to be its first Indian PU mattress supplier. Shree Malani Foams began making roll pack mattresses and send them to IKEA to retail in its Indian stores, as well as international ones.
“The IKEA tie-up was a feather in our cap and brought many more large format operators to us,” Siddharth adds.
Malani’s sheer belief and confidence in creating a new category had paid off. While shaping demand and market perception of quality took some time, it eventually bore fruit for the company.
In 2019-20, Shree Malani Foams made Rs 210 crore revenue, and has become a leading PU foams manufacturer in the country, says Siddharth.
A family legacy
Some part of the foam business’ success can be attributed to the strong foundation in manufacturing laid by the Malani family business since 1988.
But it was no stroke of luck that founder Bhagwandas Malani decided to launch a business. The Malani family always had a strong business background with a rich history of entrepreneurship in the Hyderabad region.
“Bhagwandas was the great-grandson of Ramgopal Seth Malani, an eminent entrepreneur in the Hyderabad region during the Nizam's era,” revealed Uttam Malani, third-generation entrepreneur and Bhagwandas’ grandson, in an earlier interaction.
With nine generations of entrepreneurs involved in several businesses, it was natural that Siddharth, a chemical engineer by qualification, would follow the same path.
He immersed himself in product development and innovation in advanced foam products. Under him, Shree Malani Foams was one of the first players in India to introduce the German Hennecke technology for PU foam manufacturing to the Indian market.
“By virtue of using superior materials and chemical formulations, our products are durable. Our lifetime ownership costs are better than many other products in the market. We have developed several proprietary products, such as antimicrobial foams and open cell foams that remain fresh and hygienic even after years of use,” he says.
Shree Malani Foams' manufacturing unit in Telangana
Cenflex distributes its products through a network of retailers and furniture makers across India. On the other hand, Flamex, the family’s technical brand, services direct B2B partnerships with large consumers in the automobile, insulation, packaging, and footwear industries.
For Shree Malani Foams, diversifying its business into various foam products and industries happened naturally. Customers approached the company seeking private label opportunities, especially in the furniture and mattress markets.
“But we were quite selective in our approach. We decided to focus on growing the baseline of the foam business to a market leadership position,” Siddharth says.
At present, Shree Malani Foams manufactures at its plant at Chegunta near Hyderabad. It is planning to launch another plant in Bhubaneswar, Odisha.
Said to have a capacity to manufacture 6,000 tonnes of PU foam, the Rs 55 crore plant is expected to become operational by 2021 and boost the company’s presence in the north and northeast India.
Impact of COVID-19 and lockdown
COVID-19 and the resultant lockdown has been the biggest challenge Shree Malani Foams has seen so far, claims Siddharth.
Its operations were completely stopped and the business decided to focus on digitising its various processes. Even as lockdown restrictions were eased gradually, employees were encouraged to use video-conferencing technology for meetings and told to avoid large gatherings at work. Guidelines and processes for daily screening, social distancing, and sanitisation were also put in place.
At present, Shree Malani Foams is seeing a rebound in consumer demand.
“We anticipate a shift towards the branded and organised segment for PU foams due to better product quality, safety, and hygiene. We have already surpassed our pre-COVID-19 sales and are on track for posting another year of robust growth,” Siddharth says.
The Shree Malani Foams team at the manufacturing unit
Going forward, Siddharth believes there is “plenty of headroom” in the industry for select and organised players to consolidate demand and “drive out spurious products” from the unorganised sector.
One such company is Sheela Foam, a leading PU foam maker in the APAC region and the manufacturer of popular mattress brand Sleepwell.
With the global PU foam industry expected to grow at a CAGR of eight percent, the market is estimated to increase from $54.19 billion in 2018 to $79.77 billion by 2023.
Rising demand for PU foam across bedding, furniture, building, and construction end-use industries is expected to contribute to this growth.
Shree Malani Foams is well-positioned to take the Malani legacy further and capitalise on investments from new infrastructure development and housing projects.