Vietnam has devalued the dong for the third time this year. This will make life difficult for coffee exporters like CCL

Quoting the Hindu – “CCL Products, which exports to about 56 countries, has so far shipped about 24,741 tonnes of instant coffees in the current calendar year. Tata Coffee has exported about 10,207 tonnes, while Nestle with 8895 tonnes were the other large instant coffee exporters.”

http://www.thehindubusinessline.com/economy/agri-business/instant-coffee-demand-seen-boosting-exports/article7562212.ece?ref=sliderNews

TCPL packaging fell today while the entire market picked up. I think this is a counter intuitive trend. The Guwahati capacity is already in play and as capacity utilization increases, the overall margins will go up. This is because, the Guwahati factory is already running and incurring the fixed costs of rent, electricity, salaries etc. Any incremental capacity utilization will directly result in the total margin being added to the bottom line.
Moreover, it shows a lot of business strength to be capacity constrained in a market which is marked by over capacity. Being from the FMCG line and having dealt with them earlier, I see a much brighter future for them.

Anuj
Discl: Invested and accumulating

Avanti Feeds to consider sub-division of equity shares
http://www.bseindia.com/corporates/anndet_new.aspx?newsid=58f49e12-bea9-474f-96bc-01c66b6ba660

very useful thanks a lot dhiraj – i was long worried about this margins – seems a credible story. will look at adding more on dips.

I have one question related to chemical industry. How these small indian companies are able to export their colors or dyes to other countries out side india, especially to european countries. How do they compete with large foreign players. Is it because of more stricter norms in manufacturing of chemical outside india? Could not reach a conclusion. Do they have pricing power as compared to foreign companies?