HMT likely to get revival package by beginning of FY'11
Public sector enterprise HMT Watches is likely to receive a revival package from the government by the beginning of the next financial year for plant upgradation and revamping marketing strategy, a top company official said.
"We have already submitted a revival plan to the government and we expect to get the package by the beginning of FY'11. We then plan to strongly focus on marketing and brand-building of our watches," HMT Watches Managing Director S Paulraj said without divulging further details.
It is, however, understood that the package would be somewhere in the range of Rs 700-750 crore and the company could break-even by end-FY 11 with its help, he said.
With an eye on the rural market, the Bangalore-based mini-ratna plans to enhance its marketing set-up and launch advertising campaigns for wider publicity, besides roping in new dealers this year.
"We want to strengthen our brand in the rural market, where bigger brands such as Titan are not present (in a big way). We see a huge potential in the smaller cities. HMT still has a good image and we want to leverage this," Paulraj said.
HMT will invest on brand-building this year, including in advertising, he said.
The company plans to launch a range of trendy and sporty watches and hopes to attain a sizeable share of the Rs 4.2 crore watch-market in the next 2-3 years.
The new range of watches would be available in the price range of Rs 500-2,500, he said.
"We expect a 150 per cent growth from the current level by end of next fiscal. By FY'12, we hope to achieve 400 per cent growth. Despite some existing financial constraints with the revival package, we expect to break-even by FY'11," the HMT official said.
The 48-year old company, which is writhing under a severe financial crunch since the past few years, also plans tie ups with few international brands in the high-end luxury watches segment with an aim to compete with leading brands like Titan, Esprit and Citizen.
"We are looking at a few joint ventures with some international brands to make high-end watches. We are in talks with a few parties and in a year or two we will enter the luxury segment as well," Paulraj added.
The company will also use some of the funds (from the revival package) to modernise its units and double production, he said.
At present, despite having a capacity of 60 lakh watches per annum, HMT manufactures only 5 lakh units from all its five facilities, he said.
Its plants are located at Bangalore, Kalamassery in Kerala, Hyderabad, Ajmer in Rajasthan and Pinjore in Haryana.
"We are looking at doubling our production this year and by FY'12, we are expecting to produce 20 lakh units per annum. We will focus more on mechanical watches now," he added.