CCL Products expects 20-25% volume increase this year

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CCL Products expects 20-25% volume increase this year

C Srishant, ED of CCL Products, in an interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee, said that the company will have better realisations than previous year as the green coffee-bean prices have stabilised. He added, "We might do 5-10% better than last year."

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C Srishant, ED of CCL Products , in an interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee, said that the company will have better realisations than previous year as the green coffee-bean prices have stabilised. He added, "We might do 5-10% better than last year."

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He further added, "We are increasing our volumes and expect at least 20-25% increase in volume this year. We expect the bottom-line to grow accordingly."

Below is the verbatim transcript of the interview. Also watch the accompanying video.

Q: What are the green coffee-bean prices like as they had gone up substantially? Is it a raw material for you?

A: Last year, we had prices of about USD 1300 per tonne. This year, the green coffee prices are around the range of USD 2600-2700 per tonne.

Q: What will this mean in terms of realisations for your company compared to the Q4 of FY11?

A: Last year, we faced a sudden spurt in the green coffee prices. Passing on the cost to consumers was a transition period. Now that the prices have stabilised this year, we should get better realisation than what we have seen previously.

Q: Would you be able to put a figure to that?

A: Unfortunately, no. Percentage-wise, we might do 5-10% better than last year.

Q: What will the margin profile be like this year? If green coffee prices come off and realisations are strong, can one expect some improvement in profitability?

A: Yes. We are increasing the volumes. We expect at least 20-25% increase in volume this year. We expect the bottom-line to grow accordingly.

Q: Earlier, there were some talks or rumours about a stake sale at CCL. What is going on there?

A: In 2002, we had taken over a company Complete Coffee Limited in UK. It became a subsidiary company of CCL Products. In 2010, the managing director Ian Breminer of CCL UK wanted to buyback the company from CCL.

He was willing to offer us a premium from what we paid in 2002. He had sold about 1.2% of his stake in CCL to one of our other marketing collaborators and raised the capital. He then bought back the subsidiary company.

Q: So, there is no truth to the fact that the listed entity here is looking to make any stake sale or get a strategic and financial investor in?

A: Absolutely nothing. More than 60% of the stock is held by promoters, collaborators and few NRIs. Usually, that stock will not see the light of day. All the investors are staying put.