Campco to diversify into rubber trade

Central Arecanut & Cocoa Marketing & Processing Cooperative Limited (Campco), the Mangalore-based multi-state cooperative of Karnataka and Kerala, which wiped out accumulated losses of Rs 27 crore in its only loss making chocolate division a year ago, has chalked out an ambitious expansion plan. After rescuing a large number of arecanut traders in both the states by procuring the crop from them, the cooperative is all set to diversify into rubber trade.

S R Rangamurthy, President, Campco said, “There has been a massive rise in the plantation of rubber in the districts of Dakshina Kannada and Udupi. In the last couple of years over 35,000 hectares land has been brought under rubber cultivation in these districts. Campco is already having a vast network in Kerala and Karnataka to procure rubber. We have already received approval from our board and are waiting for a nod from Central registrar of cooperative society to start rubber trade.”

He said Campco will be fully equipped to handle rubber business in the next four years when the new plantations in Karnataka start yielding the produce. “In addition to new rubber growers Campco will also procure rubber from existing growers in Kerala,” he said.

Campco’s main activities include procurement of arecanut and cocoa from the its members in the states of Kerala and Karnataka and sale in the open market. It also has a 12,000 metric tonne per annum chocolate factory in Puttur (near Mangalore) where it manufactures a wide range of chocolates, cocoa powder, butter and markets under its own brand name apart from contract manufacturing for Nestle. It also exports cocoa butter.

As part of its diversification strategy, the cooperative society is entering into green energy sector by setting up its own wind mill. It has recently signed a memorandum of understanding with Suzlon to erect and operate a 1.25 Mw wind mill at an investment of Rs 7 crore at Huvina Hadagali in Bellary district. The plant will be operational in March 2009.

“We want to achieve twin objectives by setting up our own wind mill. Presently, we are spending Rs 2.5 crore per annum to purchase power to run our chocolate factory. The wind mill will help us not only reduce power costs, but also gives us an opportunity to enter into carbon trade,” Rangamurthy told Business Standard. The wind mill will help Campco bring down its power purchase costs from the present Rs 4.52 per unit to Rs 1.36 per unit.

For the year ending March 2008, Campco reported a growth of 9.8 per cent in its arecanut sales to Rs 410.6 crore and 54 per cent jump in the sales of chocolates to Rs 78.6 crore compared to the previous financial year. It has reported one and a half time growth in its net profit at Rs 6.9 crore in 2007-08 compared to the previous year. Its topline also grew by 19 per cent to touch Rs 506 crore in FY 2008 compared to the previous financial year.