Sheela Foam looking at exports, import substitution as next big opportunities

Sheela Foam Ltd, maker of popular mattress brand Sleepwell, is looking at exports and import substitution as the next big opportunities for itself leveraging "on China becoming weaker on sentiments" in the global markets, according to company Managing Director Rahul Gautam. The company, which recently completed 50 years of operations, is also looking to expand into beddings related adjacent areas such as bedsheets, comforters, duvets, and beds and bedroom furniture as it embarks on the journey for the next half century.

"Post corona, I think there are two things which are coming out as glaring for us. Number one is exports. Till date we could not have thought that voluminous items like mattresses we would be able to export but with China suddenly becoming weaker on sentiments and other things, that opportunity has come by and we're trying to take full advantage of that," Gautam told .

Earlier, the company wasn't too focussed into exports although it was shipping some quantity to the US from India.

"Foam products are very voluminous and the freight costs are very high. There was no background or system for exporting polyurethane foam, except that China had learned to compress the mattress into a small box and put it on a ship and send it across. And that's the technology that we use now," he said.

At present, Sheela Foam has a presence in Spain and Australia. The company also uses its Spanish operations to export to the US market.

"Exporting from Spain to the US is much easier, much closer and it also has the quality approval of a European manufacturing. Therefore, it is easier to send it to the US," Gautam said.

He further said, "Spain is a good place for low-cost manufacturing and whether we would require something from another place in Europe, I think that time will tell and the places there would be more like East Europe, which is, again, low-cost manufacturing."

As for Australia, he said, "It is manufacturing only for Australia and New Zealand. That's a developed country. Manufacturing economically is not possible there, but it is good for the local markets."

Although the company has internal targets for exports, Gautam did not disclose it but said, "We have set targets, but if we keep doing what we are supposed to do we will exceed those targets."

Asked if the company is looking at the Latin American markets for exports, he replied in the negative saying it is a "little down" in the priority list of the company at the moment.

The company has also been exporting to neighbouring countries like Bhutan, Nepal and Bangladesh from its Jalpaiguri plant.

On import substitution, Gautam said Sheela Foam is looking at opportunities to replace items which have been usually shipped from overseas.

"A new opportunity that has arisen is the import substitution such as supply of foams to the Railways which were earlier imported. We have developed that (foam) internally and that opportunity has arisen and therefore today it is for 100 coaches, easily this can go up to 4,000 to 5,000 coaches," he added.

When asked about diversification, Gautam said the company will enter into very adjacent areas of its current business "which are beddings related, whether it's bed sheets or comforters or duvets".

"We are also looking at furniture, which is again related, especially the beds and the bedroom furniture, which is related for sure," he said said.

On the journey for the next 50 years, Gautam said in the past the company has focussed on doing the right things with its values intact and it would continue to do so to deliver the results without focussing too much on achievement milestones.

However, for this ongoing fiscal, he said the target for the sales team is to cross Rs 2,000 crore revenue from operations on a standalone basis. Last fiscal, the company had clocked Rs 1,689.49 crore revenue from operations.