Mallcom (India), a Kolkata based listed company, which is into PPE manufacturing for the last 38 years and has presence in 72 countries, finds safety unawareness as the main hurdle in the growth of PPE business. But the Covid induced pandemic could be a game changer, though industrial safety remains the company’s main concern. The Indian market, which is worth around Rs 1,500 crore in size but mostly fragmented, is likely to be an above Rs 5,000 crore market in a few years. Ajay Kumar Mall, managing director, Mallcom, speaks to FE’s Indronil Roychowdhury about the industry’s future and the road ahead for its business. Excerpts:
The PPE Kit is quite a buzz word at this moment but you have been into the business of making PPE for a long time. How was your business pre Covid-19 and what sort of a boost did Covid give to your business?
PPE is personal protective equipment concerning occupational safety. It could be in the fields of medical science , in a factory, on a dock yard, on a road or even in a kitchen. Safety is a big connotation but what we are talking in India about PPE at present is a medical kit. We make medical PPEs but that’s a small segment of our overall business. We have tweaked it a bit during the pandemic but mostly in the areas of masks. We have been making FFP-2 masks when everyone was talking about N-95. N-95 is definitely meant for protecting high risk viruses and bacteria but FFP-2 is quite similar, largely used in Europe for safety of industrial workers, where generally gases are used or produced with probability of viruses and bacteria.
So we could supply FFP-2 for protection against Covid and it went along with N-95 in India. We also made disposable PPE suits and it was easy to make for us because we already had the infrastructure. We installed ten more machines but finally we couldn’t match in quality and price India was looking for. So most of our products were exported to Europe. We maintain the European standards because for the last 38 years our main market for PPE has been Europe. You cannot make a Mercedes and a Nano in the same factory. So we continued to focus on industrial safety and took a lead participation in it.
What are your range of products?
We make products for head to toe protection. We make PPE in five categories including safety helmets, bump caps, face mask, hand protection like cotton, leather, dotted, coated and hybrid gloves and safety shoes. These products cater to a range of industries like aerospace and aviation, agriculture, automobile and auto ancillary, bio technology, cement, chemical and the infrastructure sector as well.
Our product basket consists of 450 products without sizes but 60-65% of our products are tailor made, mostly exported. We make 2 lakh garments, 2 lakh pair of shoes, 19 lakh pair of gloves every month from our 12 factories of which 11 are in West Bengal and one in Haridwar. We also trade in safety goggles mostly used in the road sector for long distance viewing but don’t manufacture them.
Since all these products would require a diversified range of raw materials, how do you manage your supply chain?
We need a basic range of polymer, cotton, rubber, synthetic fibre, leather and chemicals. For leather we have our own tannery in Kolkata and we are processing it according to our requirement. Over the period of time we have been able to tie up for each category. Say for nitrile rubber we have tie ups with a number of Malayasian, Taiwanese and Korean vendors. Polyethylene we buy from companies like BSF, Bayer, Synthomer ( polymer) and chemicals we mostly source from India. Valuewise, 20% of our raw materials are imported. We keep two- three months’ stock and we keep a time of 60 days when we place our orders in Europe. But like other industries we faced problems during the Covid but things have come to normal now.
What percentage of your products are exported? Which are your major foreign markets?
Till 2008, we were a 100% exporting company but now 32% of our turnover comes from the domestic market. But of our 68% revenue from overseas, 65% comes from Europe. We are also fairly present in Chile, Peru, Bolivia and especially our safety shoes are in high in demand in Peru. Fire fighting suits, normal work wear suits, chemical resistant suits are largely in demand in Europe and South America.
What is the market size of the products you manufacture and what is your share in it? Who are your buyers and competitors as well?
Globally it is a $60 billion market and the Indian market size is around Rs 1,500 crore. But the entire market is fragmented and there are no players in India who make the entire range of safety equipment. There are organised players like Bata, PN Safetech, and Udyog Plastic but they make products for specific segments.
As far as our market share is concerned we are a small player, registering a turnover of Rs 287 crore in 2020. But our biggest competitor is the safety unawareness. We serve to industries like Shapoorji Paolonji, ArcelorMittal, Hyundai, Daimler Chrysler, L&T, Indigo, Spicejet, Hindalco, Nalco and others.
How has been your growth? Tell us something about your expansion plan?
We have been growing at a CAGR of 25% over the last five years and we have so far expanded organically and further plan to grow organically as well. We are putting up a garment plant at Ahmedabad and we want to expand in PU dipping shoes and dotted gloves as well. We are putting in an investment of around Rs 40 crore.
What is your outlook on the future market?
After the lash of Covid we expect the Indian market to grow between Rs 5,000-7,000 crore in the next 5-6 years. The market is set to change and we expect more opportunities for our company. We are confident about our products and we expect the market to become more quality conscious in future.