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After a tepid year in India, Funskool wants to boost exports

After a tepid year in India, Funskool wants to boost exports

After a tepid year in India, Funskool wants to boost exports
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By Jude Sannith  Mar 20, 2019 8:14:18 PM IST (Updated)

MRF-owned Funskool India Limited is stepping into FY20 with an eye on the export market.

MRF-owned Funskool India Limited is stepping into FY20 with an eye on the export market. The company registered healthy growth in export volumes in the current fiscal and is looking to carry that momentum into the new financial year.

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Although, Funskool said revenue for FY19 is expected to dip by 10.26 percent to Rs 225 crore (revenue stood at Rs 235 crore in FY18), its revenue from exports for the year is projected to be around Rs 60 crore. The company netted Rs 40 crore in exports for FY18.
These encouraging numbers have caused the company to bank heavily on exports, with Funskool chief executive officer (CEO) John Baby saying that he expects similar growth in export revenue, for the coming fiscal, as well. “Our current focus is on exports where we are growing by 50 percent,” said Baby, speaking to CNBC-TV18, “This growth will be maintained in the coming year as well.”
Reason for this confidence is that Funskool now has a brand new plant, with greater proximity to the Chennai Port. On Wednesday, Funskool’s CEO, and MRF vice chairman Arun Mammen inaugurated the company’s third plant in India in Ranipet, Tamil Nadu.
“Our exports will be smoother from the new plant since the Chennai Port is much closer now,” Baby added. Funskool expects its new plant alone to account for Rs 30 crore in exports, which it says will take its total export revenues to Rs 90 crore by FY20.
The new plant is spread across 61,000 square feet and has seen Funskool cough up Rs 25 crore in investment. While the plant will focus on the export market, there are lines to cater to the domestic market as well.
At present, a total of 250 employees work at the plant, although the company expects that number to double by April 2020. Funskool expects a capacity utilisation of 90 percent by the plant’s second year of operation.
While the toy market in India is valued at Rs 3,500 crore, factors like demonetisation and a Goods and Services Tax (GST) of 12-18 percent on toys (depending on the type of toy), had caused headwinds in market growth over the last two years, said Funskool.  “However, the industry has still managed to grow at 10 percent year-on-year, with the next few years also slated to register similar growth,” said Mammen.
“Funskool is aiming for faster growth through exports, and our new plant will allow us to establish export opportunities in various markets,” Mammen added. “We will see more toy companies looking to India for growth opportunities since labour costs in China are rising,” said Baby, emphasising the opportunity in exports, for Indian toy-makers.
As on date, Funskool supplies to international toy companies like Hasbro, SpinMaster, ELC, Flair and Drummond Games. The company has also been expanding in European and American markets through its own brands, Giggles, Fundough and Handycrafts.
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