Small towns key for Godrej's locking biz

Godrej Locking Solutions and Systems expects small towns to account for 5-10 per cent of its sales this fiscal and believes the share can double by 2020.
"I see an opportunity in tier III and tier IV cities for business development and therefore we are already pushing hard in those cities. Tier III and IV would deliver between 5-10 per cent of our revenues this year.
"By 2020, they have to significantly contribute. I see that 5-10 per cent becoming 15-20 per cent easily by 2020. The share of tier-III and tier-IV will increase," Godrej Locking Solutions and Systems Executive Vice President and Business Head Shyam Motwani told PTI.

The firm, part of Godrej & Boyce Manufacturing Company, has over 700 stock keeping units (SKUs) and is eyeing a turnover of over Rs 700 crore for this fiscal.
The locks market was estimated to be around Rs 4,000 crore in 2014, with the organised sector constituting 40 per cent of the industry.
Godrej Locking Solutions and Systems has a market share of 35 per cent within the organised segment.

Motwani expects the market share to increase significantly over the next five years with increasing urbanisation, rising disposable incomes and government initiatives like 'Smart Cities'.
The domestic locks market has been sluggish over the last 12-18 months due to the slowdown in the real estate industry, he said.

"There has been a slowdown in real estate over last 12-18 months and that certainly has had its impact on the building material industry. We are also in the same industry that supplies a lot of building materials, so the pace has slowed down a bit.
"The rate at which we wanted to grow and the rate at which we grew two years back, last year and this year, we have seen the pace has gone down a little bit," Motwani said.
"From a double digit growth we were at single digit... Our aspiration is to grow anywhere between 22-24 per cent a year. We were doing very well until FY15.

"FY16 and the current year FY17, the pace of growth has slowed down to single digit... My sense is, we will end at 9-12 per cent growth for this fiscal," he said.
The company, which largely operates in premium and masstige segment, is also tapping the online route and is making separate products for e-commerce.
"We are already working on products which are specifically designed for online and which are not available in normal traditional trade at all. We are looking at some of the main door locks for online today," he said.
Godrej Locking Solutions and Systems, which currently exports to Middle East, Africa and Asia, is planning to enter South America and North America as well.

Exports account for 3 per cent of its revenues and the company is expecting the share to increase to 4-5 per cent this fiscal.