CCL Products says new coffee unit in Vietnam to be ready by FY25

CCL Products India Ltd expects its newly announced $50-mln freeze-dried coffee unit in Vietnam to be ready by the December quarter of 2024-25 (Apr-Mar), via a press release.

The company's management said that it had enough client agreements to consume the produce during a post-earnings conference call.

The company presently produces 30,000 tn of freeze-dried goods annually in Vietnam, and it is currently expanding that capacity by 6,000 tn at a new operation there. Similar freeze-dried coffee production capability is also available at CCL Products' facility in Guntur, Andhra Pradesh.

The company intends to raise around $35 million of the $50 million in capital expenditures through loans and the remaining $20 million through internal accruals.

The company had 9 billion rupees in total debt as of December 31.

The management said that unless there was a clear commitment from customers, CCL Products will never go for expansion. The company has secured a five-year commitment for the offtake from the new capacity in Vietnam.

The company said its current capacity at Vietnam was booked till 2024-end, as the company had added new customers in recent months.

Along with selling in stores under the "Continental Coffee" brand, CCL Products also produces instant coffee and freeze-dried coffee. Additionally, it provides goods to a number of private label coffee retailers.

The business reported a total net profit of 731 million rupees for the December quarter, up 25% from the prior year. At 5.4 billion rupees, its quarterly revenue increased year over year by 26.5%.

Shares of CCL Products were trading at 519.20 rupees at 1100 IST, up 0.3% from the previous close on NSE.