Coffee producer CCL Products crosses $1-billion in marketcap

CCL productsa local coffee manufacturing company established 28 years ago, has crossed the billion dollar mark in market capitalization.

“What started as a small company with an annual capacity of 3,000 tons, has now become a company with an annual capacity of 55,000 tons,” said Founder and President C. Rajendra Prasad.

The company, which recorded a turnover of ₹2,070 crore in 2022-23, is the world’s largest manufacturer of private labels and the third largest coffee manufacturer in the world.

Company script Closed at INR 651.50 on Monday.

“We supply coffee to customers in 100 countries. We are investing Rs 400 crore both in India and Vietnam to increase production by 22,000 tonnes,” said Shala Srichant, General Manager, CCL Products.

The company has a production capacity of 55,000 tons, with four manufacturing facilities (two in India and one each in Vietnam and Switzerland). “We will have a production capacity of 16,000 tons near Tirupati and 6,000 tons in Vietnam. These two will increase and run by 2024-25.”

Also read: Coffee exports are likely to drop by 10% this fiscal year

The company is now looking to double its market capitalization in the next five years, said Srichant, son of the company’s founder and chairman C. Rajendra Prasad.

In a select press conference, Rajendra Prasad spoke about the initial hurdles like obtaining licenses and gaining the trust of importers.

Own brand

CCL Products, which was mostly a volume player until five years ago supplying coffee to global players, decided to launch its own brand. In the last financial year, it contributed ₹150 crore to the company’s turnover of ₹2070 crore. The new vertical broke even two years ago.

earlier this month, CCL has acquired six coffee brands From the Swedish Löfbergs Group, he opened up a business-to-consumer market for them in the lucrative UK market.

“Our core business is growing by 20 per cent. We will further focus on our own brand by diversifying the product portfolio and splitting between traditional business and branded products at a ratio of 50:50,” said Srichant.

Heavy import duties

Srichant said the country should reduce import duties on coffee products. It’s up to 100 percent now. It must be reduced to at least 30 percent. It will still protect the interests of farmers. “If we open up, we can expand the market, which will be beneficial for the ecosystem,” said Srechant.

He said the fee reduction would help lower the price of coffee for Indian consumers.