Andhra snatches coffee giant Lavazza away from TN

In what is seen as a victory for Andhra Pradesh over its southern neighbour Tamil Nadu, Italian coffee giant Lavazza has decided to move its manufacturing facility out of the Tamil Nadu capital Chennai to the Sri City special economic zone (SEZ) at Tada in Nellore district of Andhra Pradesh.

To come up at an investment of €20 million (Rs125 crore), the new facility will initially cater for the Indian sub-continent and is slated to be Lavazza's manufacturing hub for the entire Asia Pacific region in three years time, Giuseppe Lavazza, vice-president of the €1.1 billion Lavazza group, said in Hyderabad on Friday. The company has already begun work on what is slated to be a state-of-the-art facility.

Talking about the reasons for the move, Lavazza said, "Apart from the lease on the Chennai facility expiring, the Tada facility is close to Chennai, where our Indian operations are headquartered. We were also impressed by the proactive approach of Andhra Pradesh and the services being offered at the SEZ.''

The world leader in the coffee market, Lavazza has four facilities in Italy and one in Brazil.

The company has acquired 40,000 sq m for the coffee processing facility that will employ nearly 150 people and will have an initial capacity of 1,100 tonnes per annum. This will be scaled up to 1,600 tpa in the third year of operations. The Chennai plant, which was set up in 2007, had a capacity of 960 tpa.

The 116-year old Italian company, which acquired Barista Coffee Co and Fresh & Honest Cafe Ltd in 2007, is also brewing plans to expand its retail presence in India.