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Gujarat town looks to topple China in global toy supply chain – BusinessLine

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By Rutam V Vora
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A file picture of an Ajanta showroom in Morbi
The manufacturing hub of Morbi known for its tiles and timepieces is making a big play to become the toy factory to the Mattels, LEGOs and Hamleys of the world. It aspires to replace Chinese supplies and become the new playground for multinational toy giants.
Around 150 electronics items and clock manufacturers from Morbi are in talks with firms which source parts or finished products from China for the Indian market. According to Jaysukh Patel, MD of Ajanta-Oreva Group, the world’s largest wall-clock maker, the ongoing Covid-19 crisis and the recent border conflicts with China have prompted factory owners here to explore new dimensions to their businesses and try and get a chunk of the orders going to China.
Patel points out that due to low demand, Morbi’s manufacturers are currently operating at barely 20 per cent capacity. Last year, the industry here operated at less than 60 per cent of its capacity.
“So, we started looking at our strengths and decided to replace China as a supplier for small electronic equipment for consumer appliances, toys and gift articles,” explains Patel.
He said not only are they engaging with toy and gift articles makers but also consumer durable firms such as Hitachi, Samsung and LG for new business.
Clocks and electronic gifts manufacturer Sagar Sutaria of Siddhart Gifts has already laid out plans to foray into moulded plastic toys and soft toys as an immediate extension of his business.
“We are not worried about entering the new segment of toys, because the market is very much accessible as most of the gift article shops sell toys and clocks together. It gives us easy access to the market.
“We will continue to make clocks and start a second line of business with toys and fill in the Chinese shoe,” Sutaria said.
Can Morbi match China in cost competitiveness? Morbi's businessmen have worked out the economics and are confident they can not only take on the country in cost but offer superior quality too.
“Our capability is not in mobile making or TV or big electronic products. But we are good at smaller products with economies of scale. And thanks to Covid-19, we now have spare labour, spare capacity and spare time — at least for the next one year. We plan to build on it and capitalise on this opportunity,” Patel said. He adds that a letter has been sent to Prime Minister Narendra Modi seeking government support and protection for this segment of products.
The letter dated July 5 raises concerns on under-invoicing/tax evasion by Chinese companies to dump goods into the Indian market and ruin the country’s MSME sector.
“Indian MSME is competent enough to compete with Chinese products provided we curb the unethical imports of Chinese products. It will be a great assistance and boon to the MSME sector, if we can curb such unethical imports,” the letter stated.
Notably, over the past 50 years, Morbi’s clock industry has updated itself with Japanese and German technologies of quartz for clocks and needled its way into prominence.
“Today, over 90 per cent of India’s clocks are made in Morbi. Raw material supplies of plastics and electronics inputs like PCBs, LCD, etc., are secured for them. So, they may not need to go looking for suppliers,” said Patel.
Morbi has over 300 SMEs operating in clocks, gifts and electronics items manufacturing employing over 35,000 workforce — mostly locally available.
The timing may just be right for the transition to toys.
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