With its eyes set on Foreign Direct Investment (FDI) for its furniture brand HOF, the Ahmedabad-based office furniture player, HOF Furniture Systems Pvt Ltd, is expanding its operations in the hospital furniture and home segments, to become a comprehensive furniture brand in the next three years.
“In the next three years, we plan to have FDI investments in our brand to add value to our existing operations, bringing global expertise in technology and best practices and further strengthen our positioning in the Indian furniture space,” said Pravin Patel, Founder & Chairman, HOF Furniture Systems Pvt Ltd
Patel, however, said the company has not undertaken a brand valuation exercise so far, but it has registered a business turnover of INR 70 crore for the fiscal 2016-17. “We have not started the discussions as yet with the foreign investors, but we would like to have Italian and German investors through FDI. And we may offer them up to 30% in the company,” said Patel, adding that the decision on FDI would be taken once the two newly-introduced segments of home furnishing and hospital furniture stabilises with the sizeable product basket.
HOF recently set up 100 dealerships across the country and is on an aggressive expansion with plans to double the dealerships by next year and increasing the store count from the 27 currently (including one in Nepal) to 50 by March 2018.
Hailing the GST rollout for bringing about ease in logistics and goods movement, Patel said, “GST is a big plus for industries like us. Now, we have to deal with a single tax, which makes it convenient to distribute goods from a single location.”
The company plans to set up two depots – each to feed the Northern market as well as the Eastern region. “Going forward we also plan to set up two facilities – completely knocked-down (CKD) units – one each in Nepal and Guwahati in eastern India. This will expand the manufacturing base for the company,” Patel said. The current facility at Ahmedabad will continue to feed the CKD facilities with parts, besides catering to the western and southern markets.
Patel said, “The government’s push for affordable housing and infrastructure development has opened new potential for furniture demand in the housing segment. With new segments and turnkey project assignments, we will be able to close the current fiscal at INR 100 crore.”
The company is also planning overseas expansion by opening franchisee stores in Tanzania, Kenya, Uganda, Sri Lanka, Bangladesh, the UAE and Nepal. “But looking at the current opportunity in the domestic market, we are focusing more on the India market,” added Patel.
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