Aequs to design and manufacture toys for Disney

Aequs Pvt Ltd, a contract manufacturing company in Karnataka's Belgaum district, has ventured into original design and manufacturing (ODM) for Disney toys in collaboration with Stone Sapphire, the licensee for Disney in India.
The partnership involves designing and producing 36 collectible Marvel pullback cars, marking Aequs's transition from original equipment manufacturing (OEM) to ODM for toys.

The strategic relationship with Stone Sapphire is open-ended, and the design process began 18 months ago. The initial production phase involved manufacturing 2 lakh toys, set to be available in the market soon, with exports to Gulf countries scheduled for the next quarter.
Aequs is investing between $200,000 and $300,000 per toy, covering molds and tools specific to the design. The company's current capacity allows the production of 2 lakh toys per month, and it has collaborated with 15-20 micro, small, and medium enterprises (MSMEs) for various components. The production is divided between a 300-acre unit in the special economic zone (SEZ) and a 150-acre unit in the domestic tariff area (DTA) section of the Koppal Toy Cluster.

To access the domestic market without import duties, Aequs set up the DTA unit in response to a 10% increase in toy import duties in Budget 2023. This change resulted in a 70% decrease in toy imports, creating an opportunity for Aequs to cater to the market.

Aequs is pricing the new Disney toys between Rs 300 and Rs 400, targeting the middle-class consumer. Aequs chairman and Chief Executive Officer, Aravind Melligeri said: “Despite global inflation in the toy industry, India's toy market is performing well. The consumption demand is high in India but the distribution efficiency needs to be improved, especially in the smaller cities to be able to address the demand there.”

The Indian toy market is presently estimated at $1.5 billion, projected to reach $3 billion by 2028, with a compound annual growth rate of 12% since 2022. Aequs chairman calls for production-linked incentives, stating that India lacks the necessary ecosystem to become a major toy manufacturer.
Aequs, having invested over Rs 400 crore in Koppal, aims to eventually relocate its Belagavi toy production line to the Koppal Toy Cluster, where products for seven other customers are manufactured. Of the 11 brands produced by Aequs, only two are Indian. The toy segment currently contributes 20% to the company's overall revenue.