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

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

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

FPJ Web DeskUpdated: Thursday, January 19, 2023, 12:12 PM IST
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CCL Products says new coffee unit in Vietnam to be ready by FY25 | Image: CCL (Representative)

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.

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