Mondelez International plans to make Rs 1,200 crore Andhra plant an export hub

US-based food, confectionery and beverages giant Mondelez International plans to make its $190 million (approximately Rs 1,264 crore) new plant in Sri City in Andhra Pradesh cater to both domestic and export markets, a senior company official said.

The $30 billion (approximately Rs 2 lakh crore) group owns brands like Cadbury Dairy Milk, Cadbury 5 Star, Bournvita, Halls, Oreo, Tiger and Toblerone. 

"We are investing in this plant for the future. India is an important market for us. We have invested more than $100 million during the last three years. The investment in this plant is part of our global capacity expansion," Maurizio Brusadelli, president, Asia Pacific, Mondelez International, told reporters here.

The 60,000 tonne per annum (tpa) plant in Chittoor district was inaugurated by Andhra Pradesh Chief Minister N. Chandrababu Naidu on Monday. 

Inaugurating the plant, Naidu urged Mondelez India to increase its sourcing of cocoa as the state government will be increasing the crop acreage.

Naidu said the state government wants to increase the cocoa planting area to 75,000 hectares from the current 25,000 hectares.

The chief minister also said that Andhra Pradesh is good in cow milk production and can cater to the demands of the company.

According to Naidu, the government will be developing Sri City, Nellore and Tirupati as a tri-city industrial corridor.

The chief minister urged young workers in Mondelez India to behave responsibly as any labour unrest will drive away international investors.

Naidu said Hero Motors will also set up base in Andhra Pradesh. "The plant will be expanded in three phases in five years. 

Meanwhile, Mondelez India Foods Private Ltd. managing director Chandramouli Venkatesan said that at the end of the third phase, the total capacity of the newly inaugurated plant will go up to 250,000 tpa. 

By that time it will be a multi-product locality," he said.

Mondelez holds 134 acres in Sri City and has utilized only around 30 percent of the land for building the new facility.

Venkatesan declined to comment on the company`s total capacity, including the Sri City facility.

According to Brusadelli, exports will start after the third phase and the production will cater to the domestic market till then.

"Three of our suppliers will set up their facilities near our plant. Their investment will be in addition to ours," Daniel P. Myers, executive vice president, Global Integrated Supply Chain, said.

Mondelez India recently expanded its biscuits portfolio, launching Bournvita biscuits.

Venkatesan said he was hopeful that the brand extension will be successful, though another health drink maker`s attempts to extend its brand to biscuits did not succeed greatly.