Tyre major MRF-owned toy manufacturer Funskool is tapping export markets to drive its sales and is also expanding its capacity, a top company official has said.
The Chennai-based company that operates two factoriesin Goa and at Ranipet in Tamil Nadu--is commissioning a third plant at Ranipet in February, at an investment of Rs 25 crore.
"The first phase will be commissioned by February. We should have one more factory by 2020. We are not taking orders for exports now because we have capacity constraints in both these units," Funskool chief executive K John Baby told PTI here.
The toy maker clocked a revenue of Rs 235 crore last year and it expects this to touch Rs 250 crore this year.
"Last year our growth was in single-digit and it may remain so this year as well, between 7 and 9 per cent. But from next year, it should be double digits as we add capacity. That is why we are pushing exports in a big way and exports will be leading the growth," he said.
Already the company ships to Australia, Africa, Britain, Europe, the Gulf and the US.
"This year, exports will contribute 30-35 per cent of our revenue, up from 20-25 per cent last year. Exports are growing much faster than domestic sales. By the end of 2021, I look forward to a 50:50 ratio between export and domestic sales," he said.
He has also set a target of clocking around Rs 400 crore revenue by 2021.
Funskool, a wholly-owned company of the tyre major MRF after US-based Hasbro exited the joint venture, gets 40 per cent of its revenue from own brands and the rest 60 per cent from over 20 other brands, which it contract-manufactures for seven companies.
The company, which focuses on sub-Rs 500 price range, has a market share of 10-15 per cent in the Rs 3,300 crore domestic toy industry. However, industry estimates say as much as 80 per cent of toys sold in the country are imported.
The company has 16 retail stores, while online accounts for 12-15 per cent of sales.
Funskool, which spends 4-5 per cent of the topline on marketing and advertising, counts the South as its strongest market. Its biggest brand is Giggles in the infant and toddler segment that is growing at 40 per cent.
The infant and toddler segment is estimated to be 30 per cent of the Rs 3,300 crore toy market.
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