India Brand Equity Fund (IBEF) has turned down Titan Industries Ltd's application for assistance.
The IBEF subcommittee conveyed their inability to provide assistance to Titan on the grounds of little "India" connection to the company's products.
"The company's export strategy is to promote the brand Titan at the global level. In accordance with the practice followed by several internationally known watch brands, the country of origin or country of manufacture is not specifically highlighted," senior Titan officials told Business Standard.
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Titan sought Rs 15 crore of assistance from the IBEF for all three of its principal export markets, these being Europe, the Middle East and the Far East.
Titan has targeted to sell seven million watches worldwide this year. In the domestic market, Titan would focus on establishing the Sonata brand and consolidating the various sub-brands and range additions created last year. In the international market, Titan would be expanding its presence and creating a significant position for itself in the many markets where it is marketed.
With the lifting of trade barriers on imports of international brands of clocks and watches, Titan foresees a flood of brands from Europe, Japan and Hong Kong. Some are expected to be expensive, while others will be cheaper.
"We believe our brand equity, distribution strength and service infrastructure give us a significant competitive advantage and the combination of range of products, its quality and prices are internationally comparable if not superior to what can be termed as relevant competition," the officials said.
In 1999-2000, Titan's total income increased by 33 per cent from Rs 484.45 crore to Rs 643.34 crore. Despite increased intensity of competition, volume sales of watches grew from 5.11 million to 5.90 million accounting for a new high of Rs 468.22 crore and a larger market share.
The jewellery business continued to grow with turnover more than doubling from Rs 76.11 crore to Rs 154.07 crore despite delays in the opening of new boutiques. For the first time, income growth from the jewellery business exceeded that from the watch business. Exports increased from Rs 31.56 crore to Rs 42.70 crore.
At the same time operating costs have increased and the main reason for this being the higher level of excise duty, more payroll expenditure following the signing of a three-year agreement with the company union, larger outlays on overseas and domestic marketing and a negative exchange difference of Rs. 9.45 crore on borrowings, advances and export receivables compared with a positive impact of Rs. 4.70 crore in the previous year.