Cafe Coffee Day brews global plans

To set up 50 retail outlets in five international cities

Cafe Coffee Day, a division of the Rs 300-crore Amalgamated Bean Coffee Trading Company Limited, plans to set up 50 retail cafe outlets in five international cities including Dubai, Vienna, Beijing and Shanghai by the end of 2006.

Speaking to Business Standard, Sudipta Sen Gupta, head (marketing) of Cafe Coffee Day, said, "During the Dubai Shopping Festival last year, we had a makeshift cafe and the number of footfalls that we received exceeded our expectations. Encouraged by this, we plan to set up at least five stores initially."

Looking exclusively at the market in China, she said that talks are underway for setting up outlets on the campuses of Wipro and Infosys there. "Before the Beijing Olympics in 2008 we want to have a sizeable presence in China with at least 100 outlets," Gupta said.

The company is also looking at increasing the number of outlets in the country from the present 214 to around 500 by 2007. "An investment of Rs 18-25 lakh would be required to set up each outlet which would be raised from internal accruals," she said.

On the company's plans for Andhra Pradesh, she said that the target is to reach around 20 outlets from the present 12 in Hyderabad.

Cafe Coffee Day also has one outlet each in Vijayawada and Guntur. This apart, the company is also looking at having an outlet in Visakhapatnam by April this year.

Cafe Coffee Day expects to close the current financial year with a turnover of Rs 100 crore. "We have been doubling our revenue with the addition of new outlets over the last couple of years and we expect to maintain the trend in the coming years too," she said.

Setting aside an initial public offer (IPO) route for the company's expansion plan, Gupta said, "We will be investing between Rs 25 crore and Rs 30 crore every year through internal accruals for setting up around 100 Cafe Coffee Days. Our division contributes a major portion of revenue to the parent company. We expect the Cafe Coffee Day to contribute even more to the turnover with the growth of network in future."

The company has also planned to tie up with PSU oil companies such as Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Limited ( HPCL) and Bharat Petroleum Corporation Limited (BPCL) to set up outlets on highways with the first one coming up on the Delhi-Dehradun sector.