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Cadbury sees India as cocoa growth market

June 02, 2009 13:26 IST

Cadbury is looking to build on its dominant position in India's chocolate market by turning the country into a regional centre for cocoa production.

The UK-based producer of brands such as Cadbury's Dairy Milk and Bournville said India was proving to be one of its most resilient markets, with profit continuing to grow at about 20 per cent a year, and sales at 30 per cent - in spite of the global recession.

"Cadbury should be in a position to sustain the growth we have had in the last three years," said Anand Kripalu, president of Asia and managing director of Cadbury India.

The challenge for Cadbury, which has been in India for 60 years, has been to change local cultural habits in a country that has traditionally not eaten chocolate.

Cadbury has also been forced to become more self-sufficient in cocoa beans in India than in other countries because of a 30 per cent import duty on the commodity, which is mostly grown in Ghana and the Ivory Coast.

The company is hoping to source all of its beans domestically by 2015 rather than from the traditional overseas markets, which are also less politically stable than India.

Cocoa seedlings grow alongside coconut palms in southern India and therefore do not require fresh clearing of forests for plantations.

Cadbury believes that if it can persuade 20 per cent of Indian coconut farmers to include cocoa trees in their plantations it could increase national production of the beans from 10,000 tonnes to 150,000 tonnes a year - or 3 per cent of world production - by 2020.

"As a company, we believe we want to derisk cocoa," said Mr Kripalu.

Cadbury controls more than 70 per cent of the chocolate market in India with a presence in 1.2m stores while Nestle controls about 25 per cent.

Copyright The Financial Times Limited 2009

Joe Leahy in Mumbai
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