Japan’s Kokuyo, which bought office furniture maker HNI India last month from NYSE-listed HNI Corporation, is looking at an over three-fold growth in the country in five years in the category.
“India is key to our growth story in Asia. The others being Japan and China,” Koji Higashiguchi, India investment manager at Kokuyo, told FE during an exclusive interaction.
“With the acquisition of HNI India, the plan is to touch $100 million (Rs 850 crore) by 2030 within office furniture, riding the economic boom in the country,” Higashiguchi added.
Mumbai-based HNI India has an annual revenue of Rs 250 crore, growing at 15% per annum. India’s overall furniture market including residential, retail and office furniture is valued at Rs 1.4 lakh crore, growing at around 13-14% per annum, according to industry experts. Some of HNI’s competitors include Godrej, Steelcase, Featherlite among others.
Karan Sachdev, MD, HNI India, now part of Kokuyo, said the company was looking at “all options” to accelerate growth in the country, including a step-up in manufacturing, an expansion of product portfolio, tapping more institutional clients and making India an export hub. The company has a 3.5 lakh square feet manufacturing facility in Nagpur. It employs 350 people in India, which is expected to increase as HNI gets into growth mode.
Globally, Kokuyo derives 50% of its annual revenue of $2.25 billion from office furniture; the other half coming from stationery and office supplies respectively. Office supplies are restricted to the Japanese market only. By 2030, Kokuyo is aiming for an annual revenue of $3.5 billion, with international markets such as India being key contributors, given its rapid urbanisation, formalisation of the economy and younger people getting into the workforce, Higashiguchi said.
Sachdev said the possibility of further acquisitions to beef up portfolio gaps in India couldn’t be ruled out in the future. “We will evaluate all opportunities with an open mind. Having said that, Kokuyo has global expertise in office furniture and this should help us in our journey of growth in the country,” Sachdev said.
Kokuyo is expected to support its Indian unit with its strong design and spatial value sensibilities, emphasis on seating, collaborative work spaces and workstations, areas where HNI has been traditionally strong, Higashiguchi said.
The HNI India acquisition will be the second for Kokuyo in the country in over a decade after it bought stationery maker Camlin from the Mumbai-based Dandekar family in 2012. Now called, Kokuyo Camlin, the firm, which is listed on the local stock exchanges, reported annual sales of Rs 816 crore in FY24, a growth of 5% over the previous year and a net profit of Rs 44 crore, a jump of 83% versus the previous fiscal.
HNI India is also likely to increase its 30-strong dealer network as well as direct sales force as it expands operations in the country.