Six firms propose Rs 1500 crore investment as Karnataka bets big on Koppal toy cluster
The Economic Times, January 11, 2021
BENGALURU: India’s first toy manufacturing cluster coming up on a 400-acre plot at Koppal in North Karnataka has received investment proposals worth $ 211 million (Rs 1540 crore) from six firms.
Chief Minister BS Yediyurappa performed the ground-breaking at the site, on Saturday, for the toy cluster being developed by Aequs Group, promoted by Aravind Melligeri, an entrepreneur hailing from the region. Melligeri is a co-founder of Quest Global, a multinational conglomerate which runs its SEZ in aerospace manufacturing in Belgavi district.
Aequs is developing the toy facility in a bid to attract big ticket investments from global toy makers and win over a chunk of global toy business, dominated by Chinese manufacturers. Aequs said it expected the cluster to get about Rs 5000 crore investments in near future as many toymakers and suppliers have shown interest to source from the facility for global markets. The facility is expected to be up and running within a year.
The six firms that offered to make investments through an MoU are: Aequs Force Consumer Products ($ 80 million), Aequs Engineering Plastics ($ 60 million), Micro Plastics ($ 40 million), Playgro ($15 million), Sterling ($ 10 million) and Hotshot ($ 6 million). On implementation, these agreements have a revenue potential of about $ 450 million (Rs 3300 crore) over the next five years, Melligeri said.
The cluster, according to Aequs, will have state-of-the-art and ready-to-use, consisting of an SEZ for exports, apart from a domestic tariff area for companies to tap the Indian market, a mix for both local manufacturers and overseas participants.
The chief minister performed the ground-breaking, amid loud cheers from local villages as the project, he said, would have about one lakh, both direct and indirect, jobs for people of the region. Koppal, industries minister Jagadish Shettar said, has a tradition of making traditional Kinna's toys. “It is against this backdrop that we aim to make Koppal a country's toy-making hub by promoting this art,” he added.
“It is on the strength of our decade long experience and success in running the Belgavi SEZ and setting up such manufacturing ecosystems, that we seek to repeat at the Koppal Toy Cluster now,” Melligeri said, and added. “So much so, five or ten years hence, when many of marquee names of the toy world would be operating out of here, and Koppal is a household name globally, we hope you will look back on this day with fond remembrance.“
The market for toys in India is estimated at $1 billion annually, almost 60 % of this demand is met by imports. “We seek not just to bridge this gap, but also to make significant inroads into the $80 billion global toy market as we move along on this journey,” Melligeri said.
Karnataka is the third-largest market for toys in India. It constitutes 9.1 per cent of the national market valued at (USD 159 million), additional chief secretary, Industries, Gaurav Gupta said.
This article first appeared in The Economic Times