Private label instant coffee manufacturer CCL Products, which exports to over 90 countries, plans to expand its Vietnam plant as well as set up an agglomeration and packing unit in Chittoor, A.P., with an investment of $20 million.
While $8 million is to be invested on the coffee making plant in Vietnam, taking its capacity from 10,000 tonne to 13,500 tonnes, the remaining $12 million will go towards the agglomeration and packing unit to be established in Chittoor. The investment is to be met through internal accruals, managing director Challa Srishant told the media here on Tuesday. The investment is to be made this year and the facilities will get into operations mode next fiscal, he added.
The move comes in the backdrop of CCL Products expecting more demand from several export markets, especially the U.S., where stricter quality regulations are being put in place, as well as from the recent foray into the domestic market. Exports account for 93% of revenues of the ₹1,100-crore company.
Earlier, chairman Challa Rajendra Prasad formally announced the launch of products across the instant, filter and pre-mix segments, under the Continental Coffee brand, in the country. Actor Nithya Menen will be the brand ambassador, he added.
Responding to queries, the senior leadership of the CCL said volumes in domestic market had been steadily rising. Starting with south India, the company planned to take its products across the country by 2021. The contribution of Indian business to overall revenues of the company is estimated to more than double to 15% in the next two years.
On the size of the market in India, CEO Praveen Jaipuriar said the instant coffee is concentrated in the organised sector and estimated to be Rs.2,000 crore. The filter coffee market is largely unorganised and around Rs.500 crore.
The company’s combined manufacturing capacity of 50,000 tonne, including those for agglomeration and packing, is spread across Guntur and Chittoor in Andhra Pradesh, Vietnam and Switzerland.
Mr.Srishant said the company had bagged contract from all the major supermarkets in Europe for next three years to supply small packs.
