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Toy industry is now coronavirus-hit, says Funskool CEO John Baby

Funskool India Ltd. CEO John Baby

Funskool India Ltd. CEO John Baby  

Shipments hit badly, says Funskool India CEO

COVID-19 has affected shipments by the domestic toy industry. Some firms have even deferred their capex plans. However, Funskool India Ltd. CEO John Baby feels the situation will change for the better in the coming months. Edited excerpts:

What has been the impact of the economic slowdown and COVID-19 on your plans?

Of course, both of them affected our business and new investment plans. Coronavirus (COVID-19) will affect the business and profitability badly.

COVID-19 has hit the industry in the most critical months — March and April. March being the year-end when maximum shipments are planned for export business and April being the biggest selling month for the domestic market.

Normally, factories commence production soon after the Chinese New Year. However, this year, on account of the lockdown in China, many workers were not able to make it back to the factories after it. So, production delays have become inevitable, which also had a cascading effect on shipping dates.

Did it impact your turnover or export figures this fiscal?

We were looking for a growth of 50% over the previous year.

Last year, our export turnover was ₹60 crore. Since March ’20, shipments have not taken place. We expect to close the year with a growth of around 40%.

How is the Ranipet unit faring?

The Ranipet unit II has done well. We targeted an export production of ₹20 crore in the first financial year. We expect to end with ₹25 crore.

Will you be expanding the second unit in June?

The slump in the domestic market during the year and the liquidity crunch had a negative impact on our cash-flows, resulting in project delays. The project is our priority. It will be taken up once the overall economic situation improves.

How is the future for the domestic toy industry?

We foresee a bright future for the domestic industry on account of the government’s push for domestic manufacturing and many global toy companies looking to India as a manufacturing destination. Further, the current year’s Budget has increased the import duties on toys substantially, making manufacturing of toys in India more economical.

Currently it is estimated that 80% of the toys sold in the country are imported. With the duty increase, we will see a positive change in the Indian toy industry.

What would be your revenue for FY21?

Marginally lower numbers compared to the previous year. Last year, we were around ₹225 crore. For the current fiscal, it will be above ₹200 crore.

Your capex plans for FY21...

The last estimate for the new plant alone was ₹50 crore approximately. As of now, it all depends on economic recovery and recovery from COVID-19.

Do you have any dealings with the China market?

Many of the major toy brands that we work with source products from China and therefore, we import such brands directly from China.

We rarely source unbranded Chinese products. We also get some moulds/toolings for products done in China.

How many new products will be added in the coming year?

We expect to launch over 60 new products manufactured at our three plants, during 2020-21.

This year our focus will be on developing the wooden range under our infants and pre-school brand — Giggles.

Last year, we had tasted success with the My First Easel. Hence our design department went back to the drawing board and conceived of a wide range of educational wooden toys to be launched this year. We have just launched an Abacus.

We will shortly be launching an educational wooden clock which is also a shape sorter, Info Cubes, a 6-sided wooden cube with a lot of educational learning and an activity table and chair unit for toddlers. Additionally, we will also be launching products under the Handycrafts range.

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Printable version | Jul 3, 2020 4:23:44 PM | https://www.thehindu.com/business/Industry/toy-industry-is-now-virus-hit/article31259651.ece

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