Japanese major Kokuyo, which acquired furniture maker HNI India earlier this year, will tap segments such as residential real estate, lifestyle and education to grow its presence in the domestic market, Masahiro Fukui, managing officer of the firm’s global workplace division, said in a conversation with FE.
The plan is to grow India revenue over three-fold in five years, Fukui said, for which the company may look at further acquisitions to fill portfolio gaps. Kokuyo has completed the rebranding of HNI India, its second acquisition in the country, to Kokuyo Workplace India (Kokuyo India). Kokuyo India has an annual revenue of Rs 250 crore, growing at 15-20% per annum.
Kokuyo’s first acquisition is that of stationery maker Camlin from the Mumbai-based Dandekar family, which was done in 2012. Now called Kokuyo Camlin, it is listed on the stock exchanges in Mumbai with an annual turnover close to Rs 800 crore. Fukui says there is no plan to merge Kokuyo Camlin into Kokuyo India. The two will operate as separate units in the country for now, he said.
“If we have to increase turnover three-fold in five years for Kokuyo India, we see our current pace of growth accelerating. The residential real estate, lifestyle, office and education segments are booming here. There is huge potential for growth as far as the furniture business goes,” Fukui said.
Karan Sachdev, MD, Kokuyo India, says that the company will formulate its new strategy over the coming months and will also increasingly look to get Kokuyo’s best-in-class products in seating and other furniture segments such as collaborative work spaces and work stations into the country. The company has a 3.5 lakh sq ft manufacturing facility in Nagpur. It employs 350 people in India, which is expected to increase as Kokuyo gets into growth mode.
“We are planning further investments in design innovation across all product categories, and sustainability-focused manufacturing,” Sachdev said. Kokuyo’s India strategy will also include a step-up in manufacturing, expansion of product portfolio, tapping more institutional clients across sectors and making India an export hub.
India ranks among Kokuyo’s top three markets after Japan and China as far as its office furniture business is concerned. Globally, Kokuyo derives 50% of its annual revenue of $2.3 billion from office furniture, the other half comes from stationery and office supplies, respectively. Office supplies are restricted to the Japanese market only.
By 2030, Kokuyo is aiming for an annual revenue of $3.5 billion, with international markets such as India being key contributors, given its rapid urbanisation, formalisation of the economy and younger people getting into the workforce, Fukui said.