Cadbury Dairy Milk maker to invest ₹4,000 crore in India
3 min read 21 Mar 2023, 06:36 PM ISTMondelez India will expand capacity at its manufacturing facilities, build more warehousing capacity and augment cold-chain facilities such as refrigerators so its chocolates and cookies reach more households.
PremiumNew Delhi: Mondelez India is set to pump in ₹4,000 crore in a span of four years in India. The chocolate maker will expand capacity at its manufacturing facilities, build more warehousing capacity and augment cold-chain facilities such as refrigerators so its chocolates and cookies reach more households.
The investment is among the largest such announced by the maker of Dairy Milk chocolates. Between 2019 and 2022, the company had invested an estimated ₹1,500 crore in India.
“So we are really proud and happy on this occasion to announce an investment of approximately Rs4,000 crores starting from calendar year 2023 to 2026. This is in addition to the significant investment we made of ₹1,500 crores over the last four years, that were impacted by covid; even then we continued to invest in our business. This is a significant investment for us to support the surge in the consumption of our products that we’re seeing," Deepak Iyer, president, India, Mondelez International, said during a virtual interview on Tuesday.
India remains a priority market for the maker of Oreo cookies, Cadbury Dairy Milk and Toblerone chocolates, Iyer said. “Hence we will continue to not just invest but actually accelerate our investment in this country," he added.
Investments will go into expanding capacity at existing factories, warehousing and logistics associated with factories, and augmenting its route-to-market including investments in cold chain to reach rural markets, via chillers and refrigerators. “This investment will help transforming our manufacturing footprint by augmenting the capacity in our existing facilities. This investment is in addition to any other investments we continue to make on our brands, advertising and media," he said.
Investments are being ploughed into the company’s four existing facilities. “As and when the need arises, we will obviously look at greenfield expansion," Iyer said.
Last February, the company’s global chief, Dirk Van de Put, had said the company’s India business could touch $2 billion in revenues by 2030—growing from the $1.2 billion business then. The company draws a majority of its business from chocolate brands such as Cadbury Dairy Milk, Cadbury 5Star, and Perk; while the remainder comes from powdered beverages such as Tang and Bournvita apart from biscuits such as Cadbury Oreo and Bournvita. During the company’s fourth quarter 2022 and full-year global earnings conference call held in January, the the top management said that the India business grew in strong double-digit for the year and quarter, driven by both chocolate and biscuit.
In fiscal 2022, the company reported a 16% year-on-year jump in revenues to ₹9,296 crore.
Iyer said investments would be diverted towards ramping up production of all categories. “We are seeing healthy double-digit growth across categories—whether it is chocolates, biscuits or baked snacks. We are growing consumption across these three categories, a lot of this investment will be across all the categories," he added.
Investments come at a time when demand for packaged foods remains on an upswing, albeit impacted by high inflation that is eating into household budgets. Iyer said the company remains “cautiously optimistic" about India’s near-term growth prospects.
“Overall we believe snacking is growing. Some of it is also being used as meal replacement. So our outlook is obviously cautiously optimistic. Cautious, because we’re still not behind some of the inflationary headwinds which are continuing—in dairy and coco we are seeing a fair bit of inflation. However, we are fairly confident that over a period of time, inflation should ease with all the efforts being done on the monetary policy front, etc. We are confident and that’s why we are calling for such a big investment," he said.
