CCL Products India Ltd is working into the business of processing coffee and it exports most of its produced amount. The main export markets are North America, Europe, East Asia, Australia, Russia and other CIS Countries. The company doesn't have plantations of its own; it does value addition in raw coffee and sells it in international market. Management Team consists of senior professionals with decades of proven experience in the field of production, purchase, finance and marketing. Prosperity of talent, expertise and experience is the background of CCL Products India functions. Instead of expanding manufacturing capacity in India, company is also planning expansion in African countries. Uganda is a major coffee producing country and setting up processing base there can provide cost competitiveness to the company.

To diversify the product mix the company is expanding into higher value added freeze- dried and freeze concentrated liquid coffee. Freeze dried coffee is 50% more expensive than spray dried coffee. Uniqueness of the project is that coffee is freezing to below 50 degrees. This is exported in thermal containers either as hot or cold cans to various markets. The company has technology tie-up with Niro Denmark and Strategic Soluble Services Ltd of UK, who are world leaders in coffee technology. This is a high value added product and would fetch better margins in future. The company has started manufacturing Freeze concentrated liquid coffee. This is a higher value added product and commands high premium over conventional freeze and spray dried instant coffee. Company has been awarded ISO 9001-2000 certification in January 2003 for fulfilling the requirements of the International Quality System Standards. Company also has been HACCP certified for Food Safety Systems by Food Cert-Netherlands.

Products & services:

Company is one of India's leading coffee suppliers. An initial capacity of 3600 tones makes it the only major exporter of instant coffee to the United States, the European Union and the Far East from India. Company has a most modern manufacturing facility At Duggirala Village, Guntur District, Andhra Pradesh (India). The Plant is designed to meet the global demand for top quality Spray-dried/Agglomerated Instant Coffee, Freeze dried Coffee and high quality Freeze Concentrated Liquid Coffee. In the International market, company name is known for Quality, Value for Money, Customization. From more than a decade company is preferred supplier of Instant Coffee to companies around the world. Company manufactures variety of products- Pure soluble coffee - Spray-dried powder/granules (Agglomerated). Pure Soluble Coffee processed from choicest Indian Robusta and Arabica coffee grown in the high hill areas, various types are available as Arabica and Robustas, which are blended in varying proportions to differing International tastes. Soluble coffee / chicory mix- as spray dried powder Chicory blended Soluble Coffee gives a stronger cup at a slightly cheaper price compared to Pure Soluble Coffee. Current Brands are- Mysore Supreme (Spray Dried Powder), Continental Special (Spray Dried Powder), Continental Special (Granules), Supreme Instant with 30% Chicory. To ensure constantly high quality, company has comprehensive control system is in place alongside sampling and tasting procedure equal to the international standards.

Valuations:

At current market price, stock is trading at 8.26 P/E multiple of its FY 2010 estimated earnings. We recommend investors to buy "CCL products" for medium to long-term investment horizon.