Campco in pact with Cadbury

The Central Arecanut and Cocoa Marketing and Processing Cooperative Ltd (Campco), the Mangalore-based multi-state cooperative of Karnataka and Kerala, has struck a deal with Cadbury India Ltd to contract manufacture of 3,000 metric tonnes of cocoa butter and cocoa powder at its chocolate factory at Puttur in Karnataka.

Under the deal, Cadbury will supply cocoa beans to Campco for conversion into cocoa butter and powder. In addition to this, Campco will supply them 300 tonnes of cocoa butter for a period of one year. The deal, valued at Rs 12 crore, was signed a week ago, Suresh Bhandhary, general manager, Campco Ltd said.

At present, Campco has the largest cocoa crushing capacity of 4,500 tonnes in the country. However, it is getting only 3,000 tonnes of cocoa and the balance capacity had been lying idle. To make use of the capacity, it has entered into a deal with Cadbury, he said.

“Last year, we had crushed 1,500 tonnes of cocoa for Cadbury. This year, they have come to us again and have committed to supply 2,000 tonnes of cocoa and renewed the contract with us for the year 2011,” Bhandhary told Business Standard.

Campco operates a chocolate factory at Puttur with a capacity of 7,000 tonnes per annum. It also manufactures chocolates for Nestle, Perfetti, ITC, Lotte and Britannia apart from selling its own chocolates.

Currently, Nestle buys about 5,000 tonnes of finished chocolates per annum, while Britannia buys about 70 tonnes of cocoa powder and chocolate mass.

Bhandhary said Campco also entered into contract manufacturing agreement with Karnataka Milk Federation (KMF) for chocolates. It will supply 10 tonnes of chocolates per month in four varieties to KMF, of which two are éclairs and one moulded chocolate and an enrobed bar chocolate. As part of the deal with KMF, Campco will also sell its own brands like Melto, Turbo, Treat through the outlets of Nandini across the state.

To meet the growing demand from contract manufacturing, the cooperative is expanding its capacities at Puttur factory to 13,000 tonnes per annum at an investment of Rs 10 crore.

“We are importing a new éclair line from AMP Rose of the UK and another line for making enrobed (bar) chocolates. The new lines will start production by end of February. This will help us meet new contract manufacturing orders,” he said.

Campco Ltd, which reported a total revenue of Rs 120 crore from chocolate business in 2009-10, is set to close the current year with a revenue of Rs 150 crore, a growth of 25 per cent.