Skip to main content

Want a lesson or two on the risks of timing and the importance of shared global opportunities in the world of business?

Look no further than Sheela Woodbridge Urethanes Pvt. Ltd., a joint-venture between Mississauga -based Woodbridge Foam Corp., and India-based Sheela Group.

Formed in 2006, the venture supplies car makers with seat cushions. India's auto industry was booming until last year when it petered out after a local industrial slowdown resulting from interest-rate increases. Disposable incomes suffered, and costs increased for manufacturers and buyers. Sheela Woodbridge's plant on the outskirts of Delhi commenced operations just past the last round of the boom.

Story continues below advertisement

"The order comes to you when the car is being designed," says Rahul Gautam, chairman of the company.

Sheela Woodbridge got its first order from Honda Motor Co., and as luck would have it, the car company's Jazz model was subject to a recall. It had nothing to do with parts supplied by Sheela Woodbridge, but demand for the vehicle was affected. The Japanese auto maker helped Sheela Woodbridge with some orders for its Brio model but they have been delayed by six months.

Flooding in Thailand and the tsunami in Japan last year also cast shadows on the company's prospects – indicators of how a sneeze in one place can cause a cold thousands of kilometres away.

On the plus side, business is chugging along thanks to two significant India-based customers: Tata Motors and Mahindra & Mahindra. Sheela Woodbridge is supplying seats for Tata's Magic van and Mahindra's SUV, the XUV500. What could have an even greater impact on the company's bottom line is the world's cheapest car, the Nano, from Tata Motors.

Sheela Woodbridge's second plant is up and running in the Western state of Gujarat. The Nano had initially been hit by technical issues, delays and sluggish demand, despite a price tag of $ 2,800. Now, with 9,000 of the small cars moving every month, business is looking up. Sheela Woodbridge is also in advanced talks with General Motors and its Indian unit, which could put the operation on even more solid ground.

"The venture still has a very small market share of 5 per cent but the potential is huge," Mr. Gautam says. "And our capacities are enough to double the production."

Foam-based products are logistically difficult to transport, so plants are required to be closer to their original equipment manufacturers. "In India, the auto industry is not located on the basis of best (business) factors but on the basis of taxation and supportive governments," Mr. Gautam says.

Story continues below advertisement

Gujarat is 900 kilometres to the south-west of Sheela Woodbridge's plant in Delhi.

But location headaches are offset by other positives – the partners complement each other nicely. Sheela Group has a 30 per cent market share of foam products in India and it has a distribution network and the experience to help Woodbridge gain a foothold. The group, which records annual sales of around $180 million in India and about $60 million in Australia, was founded by Sheela Gautam, whose son Rahul took over when she moved into politics (she has served four terms as a federal lawmaker).

Rahul is an engineer with a degree from the prestigious Indian Institute of Technology.

Woodbridge's strength is on the design side, and in its global relationships with names such as Volkswagen, Toyota, Suzuki and Mercedes, which for Sheela Group can open doors to the global automotive industry – its staples are mattresses and pillows.

There are two added bonuses for Woodbridge. Six India-based design engineers are now employed by its global team, reducing costs as they combine Internet-based work with occasional flights to some of the 56 countries in which the company does business. It's a lean, mean operation from the point of view of its global managers, though the two plants in India employ 125 workers.

The other bonus is that Sheela Group is also a customer for the joint-venture's molded pillows and mattresses. With its Sleepwell mattress brand and presence across India, the local side provides Woodbridge an opening into a huge housing boom in a country that's a billion people strong, and where every apartment has potential customers.

Story continues below advertisement

Special to the Globe and Mail

Narayanan Madhavan is associate editor of the business news pages of Hindustan Times, a leading Indian daily newspaper. He has previously worked for Reuters, the international news agency, as well as The Economic Times and Business Standard, India's leading business dailies. Though focused mainly on business and economic journalism with a strong focus on information technology and the Internet, he has also covered or written about issues including politics, diplomacy, cinema, culture, cricket and social issues. He has an honours degree in economics and a master's degree in political science from the University of Delhi.

Join The Globe's Small Business LinkedIn group to network with other entrepreneurs and to discuss topical issues: http://linkd.in/jWWdzT

Our free weekly small-business newsletter is now available. Every Friday a team of editors selects the top picks from our blog posts, features, multimedia and columnists, and delivers them to your inbox. If you have registered for The Globe's website, you can sign up here. Click on the Small Business Briefing checkbox and hit 'save changes.' If you need to register for the site, click here.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter