CCL charts Rs 200 cr expansion

CCL Products (India) Limited, manufacturers and exporters of instant coffee, proposes to expand its capacity from 8,000 tonnes to 15,000 tonnes per annum (tpa) besides setting up a 3,000 tpa coffee granulation and packaging unit in the United Kingdom.

"The Rs 200-crore expansion plan will be completed by 2007," company's managing director, Challa Rajendra Prasad, told Business Standard, adding that the expansion would be funded through debt and internal accruals.

Prasad said that CCL would be further expanding its capacity to about 25,000 tpa by December 2008, thus emerging as the largest producer of instant coffee in the country. "In fact, following this expansion, CCL will be among the top three instant coffee producers in the world," he said.

CCL had been expanding capacity phase-wise over the past few years. In the first phase, it expanded its capacity from 3,000 tpa to 4,800 tpa.

In the second phase, which was completed last month, the company raised the capacity from 4,800 tpa to 8,000 tpa at a cost of Rs 100 crore. Of the 8,000 tonnes, freeze dried instant coffee accounts for 1,500 tonnes.

The Hyderabad-based company, which has manufacturing facilities in Guntur district of Andhra Pradesh, posted a turnover of Rs 150 crore and a net profit of about Rs 40 crore in 2005-06.

The company expects to post a turnover of Rs 200 crore in the current financial year.

According to Prasad, CCL is setting up a coffee granulation and packaging unit in UK at a cost of Rs 50 crore so as to cater to the needs of the European market. The company, which currently exports instant coffee to 36 countries, has a trading outfit in UK.