Sonal Adhesives Limited is a leading manufacturer and exporter of BOPP Self Adhesive Tapes and various types of speciality adhesives & paint emulsions in India. Founded in 1991, the public-listed company has established a strong reputation in the industry for its high-quality products and reliable service.
In recent history, the company faced significant challenges in procuring raw materials due to the tightening of credit markets.
In this case study, we will explore how Sonal Adhesives Limited made their working capital stronger and regained momentum and growth in their business.
As a result of an economic slowdown, the credit markets in India had become significantly tighter, making it difficult for companies to secure the financing they needed to procure raw materials. For Sonal Adhesives Limited, this meant that their suppliers, such as Jindal Polyfilms, were now requiring advance payments instead of offering a credit period of 30-40 days as they had in the past.
This created a significant strain on the company's cash flow, making it difficult to meet production timelines and fulfill customer orders on time. The company's capacity utilization had also been limited to 30-40%, leading to lost revenue and opportunities for growth.
To address these challenges, Sonal Adhesives Limited turned to Bizongo. Bizongo's one platform with embedded financing provided access to a network of financial institutions that could provide them with the financing they needed to procure raw materials on time.
The company also onboarded four new vendors onto Bizongo's platform, streamlining their procurement process and improving communication with suppliers.
With access to financing through Bizongo's partner financial institutions, Sonal Adhesives was able to overcome the credit challenges caused by the pandemic.
Thanks to embedded supply chain financing on the Bizongo Platform, Sonal Adhesives Limited was able to overcome the credit challenges and improve its operational efficiency.
“We were able to increase our capacity utilization from 35% to 100%, resulting in a significant increase in revenue. In 2021, our sales were 17 Cr, but after partnering with Bizongo, it increased to 58 Cr in 2022, and by the third quarter, we had already achieved a sales of 60 Cr.” - Mr. Sandeep Mohanlal Arora, Director of Sonal Adhesives Ltd
The digitization of the procurement process through Bizongo's platform also significantly improved the company's efficiency, allowing them to process orders and dispatch products in a timely manner.
The company's increased capacity utilization and revenue growth are a testament to the effectiveness of Bizongo's platform and partner financial institutions network.
Sonal Adhesives is now better equipped to manage its cash flow and financing needs, allowing them to pursue new opportunities for growth and expansion.
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