Tata Coffee board approves ₹450 crore investment for capacity expansion of its Vietnam-based facility | Mint
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Business News/ Companies / News/  Tata Coffee board approves 450 crore investment for capacity expansion of its Vietnam-based facility
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Tata Coffee board approves ₹450 crore investment for capacity expansion of its Vietnam-based facility

Tata Coffee's Vietnam company plans to add additional capacity in the next two years to meet the growing demand for freeze-dried coffee.

Tata Coffee received approval from its board for the capacity expansion of its Vietnam-based facilityPremium
Tata Coffee received approval from its board for the capacity expansion of its Vietnam-based facility

Tata Coffee's board of directors, on Thursday, approved the capacity expansion of its Vietnam-based subsidiary firm at an investment of 450 crore. 
As part of the expansion plan, the board approved the setting up of an additional 5,500 tonne freeze-dried coffee facility in Vietnam, according to Tata Coffee's BSE filing. 

Earlier in the day, the company stock touched tis 52-week high mark of 280 per share on BSE in morning. However, the company scrip closed 0.40% higher at 277.25 per share on Thursday. Tata Coffee's share value has improved by 27.44% YTD and by 19.17% in last one year.

“The Board of Directors of the Company, at its meeting held on November 30, 2023, has approved the setting up of an additional 5500 Metric Tonnes (MT) Freeze-Dried Coffee facility in Vietnam. This facility is being undertaken by Tata Coffee Vietnam Company Ltd, a wholly-owned subsidiary of the Company," said the company in its stock exchange filing on Thursday.

The additional capacity would be created with an investment of $53.3 million (approximately 450 crore). The funding will be sourced from internal accruals and bank financing, said the company in its filing on Thursday.

The current capacity of Tata Coffee's Vietnam company is of 5,000 tonnes. About 96 per cent of the total capacity is under utilisation. The additional capacity which is proposed to be added in next two years aims to cater to growing demand for freeze-dried product, it added.

Over the time, Tata Group plans to increase its focus on branded coffee under its strategy of “building core categories for the future".

 

“Coffee is clearly an opportunity that is staring us in our face. We are now on the right trajectory in the coffee business and we have to maximise our offerings and up our coffee play,’‘ Puneet Das, President, Tata Beverages told TheHindu.

Tea and salts have so far been Tata’s core categories and the company said it was currently in the process of building more core categories for the future and coffee was clearly a prominent one.

“We were negligent players in coffee. But in the last three years we have increased our focus on coffee. Last year we grew 31%, last quarter saw coffee growing 21%, overall we are seeing double-digit growth in this segment and will continue to grow in the 30% range in the future as well," Mr. Das said.

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Published: 30 Nov 2023, 02:56 PM IST
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