Contract manufacturing giant Aequs is setting foot in the Original Design and Manufacturing (ODM) space. The aerospace and consumer goods manufacturer has signed a contract with Stone Sapphire, a company licensing Disney’s Marvel franchise in India.

As part of this deal, Aequs is set to manufacture a collection of 36 pullback cars, each based on popular Marvel characters. The range will be priced starting at ₹300 and will be produced for sale in India only.

The manufacturer will do so in its toy cluster in Karnataka’s Koppal district. The Koppal Toy Cluster spanning 7,00,000 sqft was envisioned by Aequs in 2020 who invested ₹400 crore into the space. The cluster was inaugurated in 2021, by then-Chief Minister BS Yediyurappa. The project, initially motivated by Prime Minister Narendra Modi’s ‘Make in India’ scheme, will generate 25,000 jobs and 1,00,000 indirect jobs, said the company. 

Aequs had in 2009 set up an aerospace manufacturing facility in the special economic zone (SEZ) in Belagavi. The SEZ currently expands over 2 million square feet of manufacturing space.“Koppal is developing at a faster pace compared to Belagavi which took 15 years to develop. We have 32 operating units in Belagavi today. Fast forward 5-10 years, we’ll have a similar ecosystem in Koppal. But this is not an overnight journey. As an investment strategy, developing a cluster usually takes 20-30 years. We are committed”, Aravind Melligeri, CEO and Chairman of Aequs told businessline. 

The intent is to develop a whole ecosystem and bring in the right partners to supply and create more value and be more competitive globally, he added. 

Challenges

However, the Aequs CEO says India has not been very accommodating of the toy market. “Manufacturing toys has to be done in a domestic tariff area and not in a special economic zone where policy is focused on exports. But if you manufacture there and want to sell in a domestic area, you have to pay duty as if it’s imported into the country”, said Melligeri. 

The import duty on toys was increased from 20 to 70 per cent earlier this year. The Bureau of Indian Standards (BIS) has not approved any Chinese toy manufacturer. China, earlier, was a dominant exporter of toys in India. “Developing an export market for toys in India takes time. It’s important to capture the global market but at the same time, India’s domestic market too is important”, said Melligeri on how India’s net disposable income sees toys as luxuries. 

The Aequs chairman, however, believes that the Koppal toy cluster can change this dynamic. “Today, Karnataka is a leader. We are one of the largest toy exporters in the country. The cluster is beneficial for Karnataka and India from a ‘Make in India’ perspective.” 

The design process of the Marvel toy range began 18 months ago and will be available for purchase next week. Aequs is also an OEM manufacturer for national players like FirstCry, WinMagic, and PlayShifu. The company’s international OEM client is Hasbro for whom they manufacture Nerf guns. Other international clients include Stomp Rocket and Spin Master.

Reporting by BL Intern Sanjana B

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