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.
The company’s founder and chairman, Pravin Patel told to Business Line, “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 position in the Indian furniture space.”
Patel, however, said the company has not undertaken a brand valuation exercise so far, but it has registered a business turnover of Rs. 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 per cent 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.
Incepted in 1986, 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 Rs. 100 crore.”