Toy-making cluster at Koppal to start by Feb 2020

Aequs Aerospace, which has set up India’s first aerospace SEZ at Belagavi, is now setting up India’s first and largest toy manufacturing cluster in Koppal district. The company has invested an estimated Rs 1,500 crore in phases for the toy cluster.

“We have acquired around 400 acres in Koppal district. The toy manufacturing campus is divided into two parts - DTA (Domestic Tariff Area) and SEZ (Special Economic Zone). The proposed land is 110 acres for DTA and 295 acres for SEZ,” Aravind Melligeri, Chairman & CEO, Aequs Aerospace told DH.

He said the Koppal toy manufacturing cluster will commence operations by February next year. It is expected to generate 1 lakh jobs (direct and indirect) by 2025. At this cluster, Aequs plans to manufacture a variety of toys, mostly high-end and advanced toys like electronically operational toys.

The company will be sourcing some of the raw materials locally while components for electronic toys will be imported.

The company will be exporting toys to all the leading and global toy brands across the world, primarily USA, Latin America, and Europe among others, Melligeri said.

Currently, Aequs is contract manufacturing toys at a plant located in the Belagavi Aerospace SEZ for its customer Hasbro.

Going forward, it will manufacture toys for various other customers, Melligeri said without mentioning names, due to a non-disclosure agreement.

“India is the preferred destination for toys sourcing after China. Major factors influencing this trend are labour arbitrage, power tariffs, etc. Aequs has the advantage of creating a unique manufacturing eco-system facilitating easy access to manpower and other logistics incentives, among others,” Melligeri explained.

To begin with, the Koppal toy manufacturing cluster will ship about 100 million to 150 million products to global brands and expand further by 2025, when the toy cluster expansion will be completed, he said.

At its Aerospace SEZ in Belagavi, Aequs has set up a 600,000 sq feet facility for manufacturing plastic toys. At Koppal, it is also planning to enter into partnerships with companies from across the world to manufacture electronic toys and some of them will be complex toys.

“It took us ten years to set up a facility for manufacturing aerospace components at our SEZ, whereas it took us just two years to set up a toy manufacturing facility after the idea was conceived. Currently, 100% is exported, but going forward we will be selling to domestic customers as well,” Melligeri said.

Aequs is eyeing a turnover of $30 million (Rs 210 crore) from toy business, while the overall turnover will be in the range of $150 million (Over Rs 1,000 crore) by March 2020, he said.

Melligeri said toy business requires a lot of manpower and there are plenty of human resources available in Koppal district.

“With little training, we can engage a large number of people at our toy cluster. A majority of our workers will be women who will be trained to work on the shopfloor,” Melligeri added.