The Hindu Business Line : Pen makers write new script with cos' freebie spree

PEN manufacturers appear to be making the most of the increasing trend of FMCG, consumer electronics and even pharma companies to dish out freebies as part of their marketing campaigns.

With an increasing number of such companies opting to offer free pens for every purchase of their products, Indian pen manufacturers see this segment as a potential one in the coming years. Many have set up a separate division to handle this market segment, as the `free-gift-on-every-purchase' campaign uncorked by FMCG companies is acquiring a shrill note.

Says Mr Ronnie Netto, Director of Today's Writing Products Ltd (TWPL): "We noticed this trend about two years ago and it has picked up since then. Last fiscal, our revenue from this segment was over Rs 10 crore of our total turnover of Rs 80 crore. And this fiscal, we expect it to almost touch the Rs 20-crore mark." For TWPL, FMCG major Hindustan Lever Ltd (HLL) was the major client — the company picked up 2.3 crore pieces of Today's brand of pens for co-brand marketing. Apart from HLL, TWPL had undertaken similar bulk supplies for Phillips and a few pharma companies. "We have set up an exclusive division to handle such orders, as they require personalised service. We estimate this market segment to grow to Rs 500 crore in the coming years," says Mr Netto.

Another area that is opening up for Indian pen manufacturers is the trend among overseas stationary companies to outsource their pen requirements from India.

Industry sources say that in the last six months, several foreign companies, including Wal-Mart, Office Depot and Staples of the US, which have so far been procuring pens from China, have visited India for outsourcing their pen requirements. While at present China has a market share of 10 per cent of the Rs 50,000-crore global writing instruments industry, India has not been able to corner any significant share of the market. This has been largely due to the hugely lucrative Indian market, currently pegged at Rs 1,500 crore, industry sources point out.

"Now, Indian manufacturers are beginning to reach out to the overseas market. After UK's Poundland tied up with TWPL to have Today's brand of pens in its chain of stores, we expect to export pens worth $1 million to UK in the current fiscal," says Mr Netto.

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