Titan to cut China watch-part imports

Titan Industries, the watches, jewellery and eyewear major from the Tata Group, is looking at reducing dependence on import of watches and watch parts from China as costs are rising.

The watchmaker will instead increase manufacturing capabilities in India to save costs, managing director, Bhaskar Bhat told DNA.

While the company manufactures 70% of watches in India, imports of watches and watch parts make up for 30% of business.

“Outsourcing (of watch parts) is becoming expensive, because China is becoming expensive, so we need to start manufacturing in-house. We will reduce import dependence and manufacture as much as we can ourselves,” Bhat said.

He said the company has started witnessing rise in costs over the last 18 months and will be increasing manufacturing capacities in India to make 16.5 million watch pieces this year.

The company has recently started a new facility in Pantnagar with a capacity of 5 million pieces.

It is also upping capacities at its parent manufacturing unit in Hosur near Bangalore in certain areas like gold plating and stainless steel case manufacturing.

“The advantage we had out of outsourcing at the high-end products has reduced and India manufacturing has become economical,” Bhat said.

The company has already taken a price hike of 5% on products to consumers.

Bhat said Titan would spend Rs200 crore this year towards opening retail stores and expanding manufacturing capacities.

The watchmaker that sells the flagship brand Titan in over 25 countries in Asia and Africa adds a new market every year. Last year it forayed into South Africa and is looking to enter Indonesia this year.

Fastrack, Titan’s youth watch, eyewear and accessories brand, will cross Rs500 crore this year.

While mass-end brand Sonata is the biggest contributor for the watch division in volume terms, Fastrack is growing fastest in terms of turnover, selling approximately 3 million watches and a million sunglasses every year, and contributing 25% to the watch division’s turnover.

Bhat said that the company could take the youth brand to other international markets soon.

“It is a possibility. The potential is there, because youth all over the world are the same. In fact Indian youth is so globalised now. We are thinking of taking the brand to other markets, but have not executed yet, because we are busy with the Indian market,” he said.

The company will open 100 exclusive Fastrack stores this year in addition to the 49 stores it already runs under the brand.

In the prescription eyewear business where the company runs 150 Titan Eye+ stores, it will add another 100 stores this year. In fiscal 2011, its watch business grew by 23% over fiscal 2010.

Analysts say buoyant consumer sentiment is the key reason for strong performance for the watchmaker.