Corporate Development     

Published: November 30, 2023
Updated: November 30, 2023

Tata Coffee (TCL)

Vietnam unit to hike coffee output

TCVCL has an installed capacity of 5,000 tonnes and its present capacity utilization is 96%. The proposed capacity addition is likely to be operational within two years at an investment of Rs 450 crore ($ 53.3 million) and will be financed through internal accruals and borrowings. As of end-September this year, on a consolidated basis, TCL had long-term borrowings of Rs 400 crore and short-term borrowings of Rs 558 crore.

The company produces 8,000-10,000 tonnes of shade-grown Arabica and Robusta coffee at its 19 estates in south India. It exports green coffee to countries in Europe, Asia, the Middle East and North America. It is also the largest corporate producer of pepper in India. The company’s two instant coffee manufacturing facilities in India have a combined installed capacity of 8,400 mt. TCL is the exclusive and sole supplier of premium speciality Arabica roasted beans to Tata Starbucks stores in India.

ROBUST OPs

Upon releasing the financial results for Q2/H1 ended September 2023, Chacko P Thomas, Managing Director, TCL, commented, “The performance of the company continues to be robust amidst a challenging macro-economic situation with a stellar performance by our instant coffee business. Tata Coffee Vietnam’s operations continue to deliver excellent performance with a healthy order pipeline and the operations are running at maximum capacity. Our coffee plantation performance was subdued due to lower volumes, though realisations have improved. Overall, it has been a very encouraging performance.” TCL has entered into a composite scheme of arrangement with Tata Consumer Products Ltd (TCPL) and TCLP Beverages & Foods Ltd (a wholly owned subsidiary of TCPL). Upon the scheme becoming effective, TCL will stand amalgamated with TCPL. TCL’s shareholders will get 14 shares of TCPL for every 55 shares held. It’s worth mentioning that TCL is a subsidiary of TCPL with a 57.48% equity stake whereas the balance 42.52% is held by about 2.19 lakh public shareholders.

COFFEE STATS

As per the data released by the Coffee Exporters’ Association, in the current financial year till now, India’s total coffee shipments stood 6.5% lower in volumes at over 2.44 lakh tonnes over the same period of last year’s 2.61 lakh tonnes. However, in value terms, it has been higher by around 6% at $ 775 million compared to $ 733 million over the last year. During fiscal 2023, India exported 3.96 lakh tonnes of coffee valued at $ 1.12 billion.