CCL Products says reason for demerger is operational efficiencies & to consolidate all the brands

CCL Products' board recently approved the demerger of the marketing and distribution division of coffee and FMCG products of Continental Coffee, a wholly-owned subsidiary of the company, into the parent company CCL Products (India) on December 2.

Talking about the demerger, Challa Srishant, MD, CCL Products said, "The main reason for this demerger is operational efficiencies actually. The current subsidiary entity has two divisions. One is the branded business, the B2C segment that we are selling as a brand Continental Extra, Speciale, and Strong. The other entity is the kiosk business."

He said, "The idea behind the demerger is to consolidate all the brands in the parent company and wanted the subsidy company to focus on expanding the kiosk model on a pan-India basis."

The company has set up 15 kiosks in Hyderabad in the metro stations. This is a completely different type of business model which has now become self-sustaining by itself.

The company is coming up with a go-to-market strategy for the Kiosk entity. Srishant said, "In the next two to three months, we will have a clear plan of action in place. So after that, we can more confidently tell you that this is the vision and how we are going to take it forward."

He added, "The kiosk business is actually a very, very small fraction, it is about little less than a crore, which we are doing in the kiosk business today. This includes our central cloud kitchen as well as the coffee on wheels, that is food trucks as well as the kiosk that I was mentioning. The rest of the business which is about almost another Rs 200 crore or so will it get merged with the parent company."