Playing for business

MY BIG IDEA

Ashok Kumar Bansal, 48, practised chartered accountancy for more than nine years before he tired of helping others become rich. Instead, he decided to take advantage of the opening of the Indian economy and set up Hanung Toys in 1990.

Today, the company is India's leading manufacturer and exporter of soft toys and has also diversified into home furnishings. Bansal now employs over 1,600 people and his closely-held company clocked sales of Rs 131.7 crore in 2004-05.

CARPE DIEM
I grew up in Bathinda where my parents were commission agents for agricultural products. After graduating from Punjab University in 1977, I moved to Delhi and qualified as a chartered account and company secretary.

I set up my own practice and slogged it out until 1990, when I realised I was tired of working only for the benefit of others. At the time, the Indian economy was liberalising. Special concessions were being given to export businesses, so I decided to try my luck there. I decided to venture into a new line of business.

I travelled extensively across Japan and South Korea and realised that South Korea made the best soft toys in the world.

But this is a labour-intensive industry, so costs were escalating and Korean manufacturers were looking for alternatives. India seemed the best bet: labour was cheap and there was hardly any organised trade in this product.

PARTNER POWER
I scouted around and found that Hanung Industries of Korea was a well-respected name in soft toys. We entered into a technical collaboration agreement and over a two-year period, Hanung helped us finalise machinery and start production.

There was no financial deal with Hanung: I set up the company with Rs 25 lakh my parents gave me. But I did use Hanung's name, for at the time India as a production source lacked credibility.

When I did show them my samples, clients wouldn't believe that they were manufactured in India. I was often accused of buying toys from Korea and China and trying to palm off them as India-made.

I made profits from the first year itself, but it wasn't easy. I had 50 machines, of which many were lying idle. I now have 400 machines that can make 20,000 pieces per shift. Last year, Hanung manufactured 10 million toys.

SOFTLANDING
It took almost six months of protacted negotiations before I landed my first client: Ikea The Swedish home furnishings chain placed an order for soft toys worth Rs 6 lakh and it has stayed with me ever since: Hanung is now a preferred supplier to Ikea.

We also supply to all the big international chains, including Wal-Mart, Target, J C Penney, Sears and Debenhams. In India, our brand Play-n-Pets is present in Archies showrooms as well as department stores. Last year, we ventured into home furnishings for the export market and simultaneously launched a brand - Spaces - in India. As with toys, 90 per cent of our revenues still come from exports, but we are considering building up our presence in the domestic market as well.

ANIMAL MAGNETISM
In the course of our business, we've learnt a lot about customer preferences and how they differ from region to region. In the West, for instance, right now Christmas-themed toys and shaped cushions such as Santa Claus, snowmen and reindeer are immensely popular.

Animal choices are also country-specific: moose are favoured in Germany, while kangaroos are king in Australia. India, though, is different. Tastes range more towards wild animals like tigers and leopards.

Of late, though, cartoon characters are particularly in demand, which is why we've signed on as suppliers to Disney; we are already licensees for Garfield and Popeye toys.