- Country: India
- Industry: Marketing, Communications, Media
- Stage: Expansion/Growth
- Investment size: $6,000,000 / min. $3,000,000
- Type of investment: Equity
Our company is willing to expand its business by taking leverage of its well established brand and healthy market relations.
We are a leading manufacturer of Banquet Furniture in India over the last 35 years. We specialize in manufacturing high quality Banquet and Restaurant chairs and tables widely used by Hotels and Restaurants. By concentrating on a narrow product line, we have achieved excellent standards of perfection in stacking Banquet Chairs and Banquet Tables. The company has supplied over 5000 Hotels and Restaurants in the country and by catering exclusively to them and constantly supplying high quality products, at reasonable prices, and by sticking to right delivery schedules has earned a name in the industry.
Our company wants to expand its business by taking leverage of its well established brand and healthy market relations. The Hotel Industry is expanding rapidly and demand for Quality Banquet Furniture has developed rapidly to be an over $100 million per year Market. Most Hotels are importing from China and Malaysia as we do not have the capacity or quality machines to produce high quality mass production
For this purpose we plan to set up a large furniture manufacturing plant in suitable industrial location of India with a proposed installed capacity of approx. 10000 chairs and 2000 tables in a month.
We are a 35 years old Company. Mr R. P. started this business in 1977 and continues to lead the Company. His experience of manufacturing and very good personal relations with key decision makers in the Hotel Industry who grew up with him and today occupy important positions in industry is the key to growth. Mr P. is a Hons Graduate from Delhi University in English and did his Post Graduation with a Diploma in Marketing. He was suitably employed at the start of his career with some Multinational Companies before setting up the business.
His wife Rosy P. has been with the Company since 1984 and continues to develop and produce new industry changing designs in furniture. Both are very well travelled to USA, UK, Malaysia, Thailand, Italy, Dubai, etc. and have visited many large manufacturers there to gain more knowledge.
We have a well settled manufacturing team in place working with us for the past 27 years and a marketing team working with us for the past 12 years.
Over 1000 new Hotels are opening in India. Each one of them by default has a Banquet Hall requiring in excess of 200 to 300 chairs and tables. Besides, new openings, old established Hotels are continuously upgrading. So, demand has exploded in the past 5 to 7 years.
The pain point for everyone in this industry is getting deliveries of QUALITY Banquet, Outdoor Furniture and Hotel Trollies in India. Most of the Hotels are now importing cheap furniture from China and Malaysia involving under-invoicing, bad quality, nil after-sales service. It is really a big pain for a Hotelier to import from China and many Hotels have been cheated.
We are the biggest brand in India with a limited capacity to produce. This hardly meets even 1 % of the demand. There are no medium scale Factories in India at all manufacturing this kind of furniture. It is a fragmented and regional market with small and very, very small manufacturers all over. Hence, the quality is poor. This market being one of over $ 200- million per year is underfed. There are no big players is in this field even 35 years after we started. So this is the big opportunity.
By setting up India’s first high-tech Hotel Furniture Factory we can address this issue to our advantage. Please note that in China and Malaysia there are over 10000 such huge factories with capacity to produce in 1 week what we produce in a year!
Rationale for the deal
As mentioned above the market size for Banquet furniture is appox. Rs 500 crores a year. With our new factory we propose to set up, with the same machinery, we can add different lines like Hotel Trollies, Outdoor Furniture, Hospital Furniture, etc. Each of these lines is equally demanded by Hotels and hence the total market size being addressed by this business is in excess of Rs. 2000 crores.
The Hoteliers import as the Indian players are small without access to technology. Quality is a major issue. Executing big orders of Rs 50 lakhs plus is not possible for any small player currently servicing this need. Hence the Hotels are compelled to import. This has spawned a legion of traders whose knowledge of the products is non-existent.
Most International Hotel Chains are now opening Hotels in India. Each of them has their own high specs which no manufacturer in India can even remotely come close to. Hence the Hotels have to import. Our company also represents many foreign manufacturers of Banquet furniture from USA, UK, Malaysia and Singapore to fulfil a part of this need.
Through the setting up of this factory, and with the huge goodwill that our we as a brand have in India, we will be able to practically reduce the imports from China and give a better quality and more economical product to the Hotels.
The technology needed here is easily available worldwide. Automatic tube bending machines, upholstery machines, CNC machines, Robotic welding machines, wood cutting machines, conveyorized epoxy powder coating plants, laser cutting machines. None of these have been applied by any manufacturer doing Banquet Furniture. Everything continues to be made by hand. This is a market whose needs are met by very small manufacturers for whom such investments are not possible as they cannot sell all over India. The capacity of production with these machines can only be sold by a national level player like us with a 34 years reputation and massive networking.
The application of such technology is widely prevalent in the West and China and they meet the capacity requirements by doing massive exports. If we can address the needs of the Indian market itself we will be more than satisfied. It is so huge!!
The Hotels, Resorts, Restaurant chains, Restaurants, Hospitals are the main buyers. The sales are 100 % institutional.
The price they will pay for the same will be lesser than their current landed, same quality furniture. Where Hotels import under the EPCG scheme we too can provide the products through bonded warehouses.
Why would consumers choose this over others?
For the simple reason that they have enormous faith in our company and will be able to get the best international Banquet Furniture and designs at Indian rates here in India itself. The best prices and best products better than International Banquet Furniture.
Most importantly, they can get dependable time tested and tried after-sales service which as a component in today’s imported market simply does not exist.
Use of financing
The Hotel industry is the best paymaster and always ready to pay a better price for a quality product. The Hotels do not buy on price basis. They buy on the basis of quality and the person with whom they are dealing. All hotels pay before dispatch of materials from the factory. So, there are no issues here at all.
Financial Projections: We can provide quarterly financial projections for the next 2 years and an estimate of the 5 year financial projection. They cover revenue, cost, gross margin and net cash flow.
Please see the annexure A.
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