COVID-19 has affected national toy industry shipments. Some companies have even postponed their investment plans. However, the CEO of Funskool India Ltd. Baby jeans believes the situation will improve in the coming months. Edited excerpts:
How has the economic downturn and COVID-19 impacted your projects?
Of course, both affected our business and our new investment plans. The coronavirus (COVID-19) will seriously affect the business and profitability.
COVID-19 hit the industry during the most critical months – March and April. March being the end of the year when maximum shipments are forecast for export activities and April being the most important selling month for the domestic market.
Normally, factories start production shortly after Chinese New Year. However, this year, due to the lockdown in China, many workers were unable to enter factories after it. Thus, production delays became inevitable which also had a cascading effect on shipping dates.
Did this have an impact on your turnover or your export figures this fiscal year?
We were looking for 50% growth over the previous year.
Last year our export turnover was 60 crore. Since March ’20, the expeditions have not taken place. We expect to end the year with growth of around 40%.
How is the Ranipet unit doing?
The Ranipet II unit did well. We have targeted export production of 20 crore in the first fiscal year. We expect to end with ₹ 25 crore.
Are you going to expand the second unit in June?
The collapse of the domestic market during the year and the tightening of liquidity had a negative impact on our cash flow, causing delays in projects. The project is our priority. It will be resumed once the overall economic situation improves.
What is the future of the national toy industry?
We foresee a bright future for the domestic industry due to the government push for domestic manufacturing and many global toy companies looking to India as a manufacturing destination. In addition, the budget for the current year has dramatically increased import duties on toys, making it more economical to manufacture toys in India.
Currently, it is estimated that 80% of toys sold in the country are imported. With the increase in duties, we will see a positive change in the Indian toy industry.
What would be your income for FY21?
Figures slightly lower than the previous year. Last year we were around 225 crore. For the current fiscal year, it will be over 200 crore.
Your investment plans for FY21 …
The latest estimate for the new plant alone was around 50 crore. For now, it all depends on the economic recovery and the recovery from COVID-19.
Do you have relations with the Chinese market?
Most of the major toy brands we work with source Chinese products and therefore we import these brands directly from China.
We rarely source unbranded Chinese products. We also get molds / toolings for products made in China.
How many new products will be added in the coming year?
We plan to launch more than 60 new products manufactured in our three factories, in 2020-2021.
This year we will focus on developing the wooden range under our infant and kindergarten brand – Giggles.
Last year we tasted success with the My First Easel. This is why our design office has returned to the drawing board and designed a wide range of educational wooden toys to launch this year. We just launched an Abacus.
We will soon be launching an educational wooden clock that is also a shape sorter, Info Cubes, a 6-sided wooden cube with lots of educational learning and an activity table and chair set for toddlers. In addition, we will also be launching products from the Handycrafts range.