Japan’s Kokuyo has set its sights on an ambitious growth trajectory in India, significantly bolstered by its recent acquisition of HNI India from HNI Corporation. This strategic move aims to triple the company’s presence in the Indian office furniture market over the next five years, tapping into the nation’s booming economy.
Strategic Vision for Growth
According to Koji Higashiguchi, Kokuyo’s India investment manager, India is a pivotal component of Kokuyo’s expansion strategy in Asia, alongside Japan and China. He expressed confidence in the acquisition, stating, “The goal is to reach $100 million (approximately Rs 850 crore) in office furniture sales by 2030, capitalizing on the economic growth in the region.”
Market Potential in India
HNI India, based in Mumbai, currently generates around Rs 250 crore in annual revenue, with a robust growth rate of 15% per year. The overall furniture market in India—including residential, retail, and office sectors—is valued at about Rs 1.4 lakh crore, with a growth rate of 13-14% annually, according to market analysts. Notable competitors in this space include Godrej, Steelcase, and Featherlite.
Plans for Expansion
Karan Sachdev, the Managing Director of HNI India, emphasized the company’s commitment to exploring various avenues for growth. This includes enhancing manufacturing capabilities, diversifying their product lineup, attracting more institutional clients, and positioning India as an export hub. Currently, HNI operates a 3.5 lakh square feet manufacturing facility in Nagpur and employs 350 people, a number expected to rise as the company scales up operations.
Global Insights and Future Goals
Globally, Kokuyo generates 50% of its $2.25 billion annual revenue from office furniture, with the remainder coming from stationery and office supplies, primarily within Japan. By 2030, Kokuyo aims to elevate its annual revenue to $3.5 billion, with India playing a crucial role due to its rapid urbanization and the influx of younger individuals entering the workforce.
Potential for Future Acquisitions
Sachdev also hinted at the possibility of future acquisitions to fill any gaps in their product portfolio within India. He remarked, “We are open to evaluating all opportunities. With Kokuyo’s global expertise in office furniture, we are well-positioned for sustained growth in this market.”
Design and Innovation Support
Kokuyo is expected to leverage its strong design sensibilities and focus on creating collaborative workspaces, areas where HNI has traditionally excelled. Higashiguchi noted that this synergy would enhance the Indian unit’s offerings, fostering innovative solutions in office furniture.
A Look Back at Previous Acquisitions
This acquisition marks Kokuyo’s second major investment in India in over a decade, following its purchase of Camlin in 2012. Now rebranded as Kokuyo Camlin, the stationery company reported sales of Rs 816 crore in FY24, experiencing a 5% growth from the previous year and a remarkable 83% increase in net profit.
Expanding the Sales Network
As part of its growth strategy, HNI India plans to bolster its 30-dealer network and enhance its direct sales force, signaling a robust expansion in operations across the country.
In conclusion, with strategic acquisitions and a clear growth plan, Kokuyo is poised to make significant strides in India’s office furniture market, contributing to both its local and global ambitions.
