New Delhi: Mondelez India set to invest ₹4000 crores for four years in India. The chocolate maker will expand its production capacity, build more storage space and expand cold chain capabilities such as refrigerators to ensure that its chocolate and biscuits are delivered to more households.
The investment is one of the largest announced by chocolate maker Dairy Milk. Between 2019 and 2022, the company invested about ₹1500 crores in India.
“Therefore, we are really proud and happy on this occasion to announce an investment of around Rs 4,000 crore starting from calendar year 2023 to 2026. This is in addition to the significant investments we have made in ₹1500 crores in the last four years have been affected by covid; even then we continued to invest in our business. This is a significant investment for us to support the growth in consumption of our products that we are seeing,” said Deepak Iyer, president of Indian company Mondelez International, during a virtual interview on Tuesday.
India remains a priority market for maker Oreo biscuits, Cadbury Dairy Milk and Toblerone chocolate, Ayer said. “Therefore, we will continue to not just invest, but actually accelerate our investment in this country,” he added.
The investment will focus on expanding production capacity at existing plants, warehousing and logistics associated with the plants, and expanding the route to market, including investments in the cold chain to reach rural markets through chillers and refrigerators. “These investments will help transform our manufacturing base by increasing the capacity of existing facilities. These investments are in addition to any other investments we continue to make in our brands, advertising and media,” he said.
Investments are made in four existing enterprises of the company. “As soon as the need arises, we will obviously consider expanding from the ground up,” Ayer said.
Last February, the company’s global chief executive, Dirk Van de Put, said that the company’s revenue in India could reach $2 billion by 2030 – up from $1.2 billion at the time. The company gets most of its business from chocolate brands such as Cadbury Dairy Milk, Cadbury 5Star and Perk; While the rest comes from powdered drinks like Tang and Bournvita, minus biscuits like Cadbury Oreo and Bournvita. During the Q4 2022 and full year global earnings conference call in January, senior management said business in India grew in double digits for the year and quarter, helped by both chocolate and biscuits.
In fiscal 2022, the company reported 16% year-on-year revenue growth to ₹9,296 crore
Ayer said the investment will be aimed at increasing production in all categories. “We are seeing healthy double-digit growth across categories, be it chocolate, cookies or baked goods. We are increasing consumption in these three categories, most of this investment will be in all categories,” he added.
The investment comes at a time when demand for packaged foods remains on the rise, albeit still affected by high inflation that is eating into household budgets. Iyer said the company remains “cautiously optimistic” about India’s immediate growth prospects.
“Overall, we think snacking is on the rise. Some of them are also used as a meal replacement. So our forecast is obviously cautiously optimistic. Watch out because we’re still keeping up with some of the inflationary headwinds that are going on – we’re seeing significant inflation in dairy and coconuts. However, we are reasonably confident that inflation should come down after some time with all the efforts being made on the monetary policy front etc. We are confident and that is why we are calling for so much investment,” he said. .
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