INTERVIEW WITH GIUSEPPE FUNARO
PARTNER AND DIRECTOR OF BUSINESS DEVELOPMENT
With the frenzy surrounding the PPE market it is no big surprise that some new players emerge in this very competitive marketplace.
Today we are with Giorgio Velati CEO BLUE CORPORATION LTD
“Dr. Velati tell us about this new project, The Glove, Star Glove, The Mask and The Wipe”
Yes, but first of all let me tell you what’s happening as a consequence of the Covid emergency and the consequent surge in demand of all PPE (“Personal Protection Equipment”). The sudden huge increase in demand has not only created a disruption in the traditional supply chain due to a multiple fold increase in normal requirements, but it has importantly determined a dramatic increase in price of these products.
PPE is a category of goods comprising hundreds of different devices and the disposable ones are amongst the most sought after due to the need for large quantities at a global level. More specifically, disposable nitrile gloves are in huge demand and this trend is continuing to grow. Nitrile gloves come in powdered or powder-free variants, are flexible, and fit varied hand sizes. The protein-free, latex-free, chemical and puncture resistant nature of the gloves, brings a high level of protection with durability and retained sensitivity to touch being paramount for anti-allergies and skin irritations. The current pandemic has brought about a shortage of gloves that is pushing up the demand and because of their heavy-duty protection, nitrile gloves are fast becoming the ideal protective gear to limit the spread of the virus.
Nitrile Gloves are projected to reach a market size US$66.8 billion by 2027.
“That is a huge market for such a niche product! Nevertheless, with big players and manufacturers capable of generating high volumes of nitrile gloves why enter this space and what is the business model of The Glove and Star Glove?”
“You see the supply chain has been somehow broken by market dynamics and that has created tremendous issues in a traditional and mature market such as PPE. In spite of the huge increase in turnover and market capitalization the big players such as Top Glove and Hartalega, have not been able to control the distribution chain to the point where customers in need of nitrile gloves have resorted to other “non-traditional” channels to satisfy demand.
These “non-traditional” channels consist primarily of big investors that have acquired large quantities of existing stock and determined a somehow unreliable supply chain. Not only has this anomaly generated a surge in prices, it has also attracted many dealers with "dubious morals" to this potentially very lucrative market opportunity. In a normal situation, international commerce for all goods is regulated by standard rules and all actors involved (manufacturers, distributors, buyers, etc…) abide to them. In the current environment this is not the case, and many have suffered huge losses due to trading scams and illegal practices. Therefore, we are in a situation where suppliers and buyers basically do not trust each other to the point where the basic rules of commerce are no longer valid.
This is bad for everyone and does not help anyone satisfy their needs.
“How does “The Glove” solve this issue? What basic need do you satisfy and how?”
“As many others involved in satisfying customers’ requirements, Assoimprese had begun looking at PPE supply for its over 600,000 SME members in Italy. It rapidly became apparent that the market had become flooded by inexperienced and unprofessional players and we could not rely on them to meet demand. We quickly realized that the most difficult PPE to source was nitrile gloves and thus began investigating how to develop a transparent and reliable end-to-end supply chain. Back in July of this year we started negotiating the acquisition of production capabilities with Asian manufacturers and kicked-off an important capitalisation project of a group company.
The first phase of the project has resulted in the creation of our OEM brand, The Glove and Star Glove.
We currently have commitment with manufacturers for a production capacity totalling 30,000,000 (thirty million) boxes of 100 units of nitrile gloves per week.
Our business model is very simple: no risks or upfront payments. We can do that because we control the whole chain and will have direct contact with our customers internationally, either directly or through exclusive distributors (note: we have just signed a three years distribution agreement for the US market).
By choosing “The Glove and Star Glove” international customers, will not only have the security of receiving the goods in a short term, but may also be able to pay it only when these have arrived at the place of destination and only after import and SGS inspection.
We will cover all risks 100% by activating a protection system against fraud and money laundering for our clients in line with European and international regulations.
The buyer will pay only after the goods have arrived at the destination and may be inspected after the customs clearance operations have been completed. Payment is made using very safe and internationally accepted financial instruments (i.e. Letters of Credit or escrow accounts).
It will also be possible, after the issuance of the L/C account or 'escrow', for customers to inspect the goods at the port of arrival and pay by immediate bank transfer.
“That sounds great! What are the next steps and objectives in this exciting project?”
Yes, it is very exciting and somehow “scary”, believe me! We are conscious that the sheer volumes we are going to produce, represent not only a logistical challenge, but also requires a very sound and reliable distribution network. This is our next challenge, and I am personally looking for trusted partners worldwide to develop the brand and possibly extend it to other PPE products in the future.
Interviewer: “What about Spain? What are your plans for our market?”
“I am glad you asked. Spain for us is a key market and that is why we have decided to create our European hub in Barcelona. Spain has one of the highest standards in terms of quality for nitrile gloves and to be able to meet Spanish customers’ requirements is a very important factor in building the brand reputation in the long run.
We will initially distribute to the rest of the EU countries from our hub in Barcelona and will eventually create a network of local storage and distribution centres.
“Dr. Velati, thank you very much for your time and wish you all the best with Blue Corporation Ltd!”
“Thank you and let’s break a leg!”