Mondelez to set up Rs 1000cr plant in Andhra

A decade-long battle with minority shareholders has not dented the appetite of erstwhile Cadbury India, now Mondelez India, from making big-ticket investments here. The company will set up its biggest facility in Asia Pacific, report CNBC-TV18’s Sajeet Manghat and Arvind Sukumar, as the chocolate maker focuses on growth despite continuing to face several challenges including an SEC investigation.Mondelez India is setting up a multi-category food campus in Sri City in Andhra Pradesh, which will be its largest chocolate production plant in India and the largest for Mondelez International in Asia Pacific. This plant will also position India as an exporting hub for the region. Mondelez is spending close to Rs 1,000 crore on this expansion. While expansion is on the cards business in the last financial year wasn't that sweet. For the financial year-ended December 2013, the company saw its earnings dip 13 percent to Rs 319 crore while sales grew 13.5 percent to Rs 4,604.44 crore. In fact, the company had to depend on the Rs 257 crore of profits it earned from sale of its Mumbai corporate office, Cadbury House. The chocolate major saw its malted foods business jump by 49 percent in 2013, while chocolates which accounts for 73 percent of its portfolio, grew at 9 percent in 2013 to Rs 3,549 crore. Its biscuits business, which is the third largest division, grew at 5.6 percent to Rs 224 crore in 2013.The company has also taken some tough calls including shutting down its Bangalore facility. The company is also staring at an SEC investigation after its erstwhile parent Kraft received a subpoena from the US regulator about alleged impropriety in its dealings with agencies of the Indian government. The independent investigation conducted by Mondelez attributed to this: "…weaknesses in the company's internal controls over payment to external consultants hired by the company, which may have resulted in improper payments having been made by such consultants." But the financial impact subsequent to the ongoing SEC investigation cannot be ascertained. Mondelez India is also continues to battle a section of minority shareholders who are seeking a higher price for their shares as part of the company's de-listing process. The chocolate major is hoping to move beyond the hurdles and focus on growing its business in India.