Travel solutions firm Samsonite Corporation is looking for prospective partners for outsourcing its product manufacturing in Tamil Nadu and Gurgaon.
The company is negotiating with a Hyderabad-based firm for outsourcing shoe manufacturing, the segment it plans to re-enter by the year-end.
The move comes after Samsonite announced that it will be gradually phasing out manufacturing from India. The company's Nashik facility is its second largest in the world.
Ramesh Tainwala, president, Samsonite South Asia, said the company was planning to outsource part of the premium Black Label range of travel bags launched globally this week to India as well. Currently, this line, priced between Rs 10,000 and Rs 80,000, is being manufactured mostly in Europe and partly in China.
Tainwala did not disclose the name of the Hyderabad firm but said the company had to take a final decision soon as the Hyderabad firm was too eager to enter into this field. The outsourcing plans for Tamil Nadu and Gurgaon are still in initial stages, he added.
"India has caught up with China to make an equally attractive market for the company. It makes sense now to outsource high-end product manufacturing to India as this market is growing at 50 per cent year-on-year," he said.
While Samsonite has its own manufacturing facility at Nashik for regular products, the capacity addition in other range of products in the country would be only through outsourcing.
Besides, it was now focusing more on India following the company's change in business strategy in favour of expanding the spread all across the markets, he added.
Hyderabad is one of the five Indian cities the company is positioning its Black Label range, which will be sold only through its five exclusive stores.
In the first phase, the company will invest about Rs 10 crore (Rs 100 million) apart from Rs 10 crore to be spent on an advertisement campaign, which starts next week. The company sees 20 per cent revenues in this range coming from the Hyderabad store in the first year.
Ramesh said the IT professionals made an important customer base for the premium range citing the example of Cognizant, which bought 10,000 bags a couple of months back.
The overall market size of travel solutions in India is about Rs 800 crore annually, according to him. The company operates around 160 stores for regular Samsonite brand products across the country.
