“Profitability averse to price volatility”: CCL Products India’s Jaipuriar says fluctuations in coffee prices won’t affect business
Despite the fluctuations in global prices of coffee, CCL Products India (Limited) will not be affected as the company operates on cost plus model, said CEO Praveen Jaipuriar.
“Coffee prices have been very volatile in the last year and a half, but our business has been stable since we worked on the cost-plus model. It makes our profitability deflect the price volatility,” Jaipuriyar told Filesadmin.co Business.
Founded in 1994, CCL Products is today the largest exporter of coffee from India, with a market capitalization of Rs.7,500 crore.
It produces more than 900 blends of coffee and exports its products to 100 countries and 400 customers.
With a new production facility in Vietnam commissioned last month, the company’s production capacity has been boosted to 54,000-55,000 metric tons per year.
In its latest forecast, the company stated that its growth volume will be between 20% and 25%, and that the achieved growth rate will range between 18% and 20% over the next three to four years.
CCL Products is not only a coffee exporter, but also ships the raw materials used in coffee production abroad.
The US dollar exchange rate plays a major role in such a scenario as the company participates in both.
When asked if his company feels the rise in the rapid rate of exchange rate change, Jaipuriyar said the company’s imports and sales are in US dollars, which also helps balance the margin pressure caused by the exchange.
“Our imports and sales are in US dollars, so fluctuations in the exchange rate hardly have any impact on our business. Since we pay in dollars and get paid in dollars, they balance each other out,” he said.
The company has a strong B2B structure and recently announced plans to enter the B2C sector.
When asked what the company’s B2C strategy would be, he said, “We haven’t moved from B2B to B2C, but both are different sectors. Like a FMCG company, we launched the B2C sector and saw sales of Rs 250 crore worth of domestic products in the first year itself.”
“Among these Rs 250 crore, Rs 150-160 crore are pure brand sales. We have a good foundation in B2C, and we want to launch our products, like coffee etc., in more countries. We want to act like a multinational FMCG company” .
The company sells products in different geographic regions around the world.
When asked about the fastest growing market for his company, he said: “Our growth is very comprehensive;