Aequs Pvt Ltd, a contract manufacturing company based in Karnataka, has secured a contract with Stone Sapphire, the licensed distributor of Disney products in India, to design and produce 36 collectible pullback cars featuring Marvel characters. The manufacturing will take place at the Koppal Toy Cluster, marking Aequs’ venture into Original Design and Manufacturing (ODM) toys, a departure from its origins as an Original Equipment Manufacturer (OEM) in 2016.
Aravind Melligeri, Chairman and CEO of Aequs, highlighted the significance of this open-ended strategic collaboration with Stone Sapphire, emphasizing the company’s transition into original design and manufacturing for a licensee. The design process for the Marvel collectible pullback cars commenced 18 months ago, resulting in the production of 200,000 toys in the initial phase. Aequs plans to export these toys to Gulf countries in the next quarter.
Melligeri disclosed that Aequs invests between $200,000 and $300,000 per toy, covering expenses related to molds and tools specific to the design. The company’s current manufacturing capacity allows for the production of 200,000 toys per month. Aequs collaborates with 15-20 Micro, Small, and Medium Enterprises (MSMEs) for various components, stickers, and packaging, providing employment to around 200 workers dedicated to Disney toys production. The production takes place at Aequs’ extensive 300-acre unit in the Special Economic Zone (SEZ) section of the cluster and a 150-acre unit in the Domestic Tariff Area (DTA) section. The decision to expand to the DTA unit was influenced by a notable increase in import duties on toys, rising from 60% to 70%, resulting in a 70% decline in toy imports.
Discussing Aequs’ pricing strategy, Melligeri highlighted that the new Disney toys are priced between Rs 300 and Rs 400 per piece, targeting the broader middle-class consumer segment. He emphasized the global toy market’s size at $90 billion, with the Indian market projected to reach $3 billion by 2028. Melligeri urged the need for production-linked incentives and emphasized the importance of building a conducive ecosystem to establish India as a significant player in the global toy manufacturing industry.