Aequs to set up India's first toy-making 400-acre cluster in Karnataka

Business Today, July 3,2020

At its aerospace SEZ in Belagavi, Karnataka, Aequs has set up a 600,000 sq feet facility for manufacturing plastic toys. A few large scale manufacturers have already set up shops in the past two years

Aequs Aerospace, the Karnataka-based aerospace manufacturing specialist, which set up India's first Special Economic Zone (SEZ) for aerospace manufacturing, is setting up a similar toy manufacturing cluster at Koppal in Karnataka.

The first of its kind toy manufacturing cluster in India will come up at over 400 acres near the trading hub of  Hubballi in Koppal, about 350 km from Bengaluru. The SEZ will try to attract leading high-end and electronic toy brands from abroad, which currently produce mainly in the toy manufacturing hubs in China and Vietnam. The cluster is targeted to create 1,00,000 direct and indirect jobs by 2025 and revenues in excess of $500 million. The facility will have a SEZ for exports and DTA (domestic tariff area) for the domestic market, with all the infrastructure for plastic and electronic toy manufacturing like design, moulding, painting, printing and packaging, set up at over Rs 1500 crore.

"In China, many of the toy manufacturing units have a production capacity of 3-5 million units a year and we are targeting leading brands and manufacturers having units with over 5 million toys capacity, employing 25,000-plus people, and exporting 100-150 million products initially," said Aravind Melligeri, Chairman & CEO, adding that already many units have evinced interest, but COVID-19 is delaying take-off of the project.

Cheap and semi-skilled labour is a key component in toy manufacturing and India has abundant potential. Currently toy manufacturers in India, mostly in the small scale sector, cater to only 15 per cent of the domestic demand and do not make high-end and advanced electronic products that require big investment and research and development. A lion's share of the Indian market is currently dominated by China, which has more than 10,000 toy manufacturers employing around six million workers. India's toy market worth over $1.5 billion is growing at over 15 per cent and is poised to grow to over $3 billion by 2024, say industry sources.

At its aerospace SEZ in Belagavi, Karnataka, Aequs has set up a 600,000 sq feet facility for manufacturing plastic toys. A few large scale manufacturers have already set up shops in the past two years. That SEZ is also making electronic and complex toys.
Aequs Aerospace had witnessed a growth of 30-40 per cent in the past in line with the global demand for new aircraft, but the COVID-19 pandemic has now reversed the trend, said Melligeri. Many airlines are suffering and it may take months and years for the industry to come back to old growth trajectories, he said.

Production at Aequs Aerospace SEZ, where over 25 companies including a dozen foreign joint ventures operate, has come down by 30 per cent as a fallout of the COVID-19 situation. Aequs operates several manufacturing facilities in India, US and France, with precision engineering companies into forging, machining, metal fabrication, aero-structure assemblies and surface treatment for the aerospace and allied industries with revenues in excess of $100 million.


This article first appeared in Business Today