Mattel goes local in Brazil, India

Source: from Reuters

(Reporting By Dhanya Skariachan; Editing by Andrew Hay)

Mattel Inc (MAT.O), the world’s biggest toymaker, has begun making products for local consumption in those fast-growing countries in a new bid to hold the line on costs.

The move comes as manufacturers of many stripes are reevaluating China, which has seen its image as a low-cost manufacturing hub dented by wage inflation and higher shipping costs.

“That’s for efficiency reasons. It’s not to say we are not continuing in China,” Lisa McKnight, SVP Marketing of Mattel’s North American unit, said in a recent interview on the sidelines of the 110th American International Toy Fair in New York.

Mattel, home to iconic American brands such as Barbie and Hot Wheels, currently makes 74 percent of its products in China. Its other main factories are in Indonesia, Malaysia, Mexico and Thailand.

The El Segundo, California-based toymaker closed its last factory in the United States, originally part of the Fisher-Price unit, in 2002.

In Brazil, Mattel makes products including Uno card packs, puzzles, Fisher-Price Rock-a-Stack toys – brightly colored plastic rings that babies pile up on a pole – and some other simple molded products. In India, Mattel is assembling and packaging Barbie products on a small scale and having some paper-based products locally made.

A label on a pack of Uno cards Reuters obtained in India showed it was made for Mattel by Parksons Cartamundi Private Limited, a local manufacturer based in Daman, a city in the union territory of Daman & Diu in India.

Toys based on paper, cardboard and cardstock – such as puzzles and card games – are easy and inexpensive to make locally, the company said.

Local production helps Mattel get products to store shelves faster, cut down on import duties and reduce costs associated with moving products around, the toymaker said.

While the Mattel products made in India and Brazil are not now being exported, the company did not rule out that possibility.

“We are always evaluating our manufacturing and sourcing operations and look for opportunities for efficiencies; however we have no plans to share at this time,” Alan Hilowitz, a company spokesman, told Reuters.