CBL Foods to invest Rs. 600m to increase capacity

by Surekha Galagoda and Koji Ando

CBL Foods International (Pvt.) Limited, the Chocolate and Cake manufacturing arm of Ceylon Biscuits Limited will invest Rs.600m to expand capacity which includes Tiara cakes, Ritzbury Chocolates, Munchee Chocolate Biscuits and GoJelly.

Managing Director, Susantha Gunawardene said that this investment is necessary to increase output because of present capacity constraints. "At present exports contribute to five percent of the turnover.

There is a demand for our products and we want to increase exports to 15 percent of the turnover and this can be done only by expanding capacity. He said that there is a big demand for cakes, candy and cereal bars especially from India but we can't commit ourselves until the capacity is increased".

Gunawardene said that from the time the company started operations they have invested over Rs.2.5b to date and they will continue investment as planned. The idea to start a factory at Ranala was mooted in 2002 for production and expansion of chocolate manufacture, which was being done as part of the operations of the parent company, Ceylon Biscuits Limited. It was decided that cakes should be added to the range. Commercial operations at CBL Foods commenced in late 2004.

Tiara cakes was an interesting project as it was a new concept known as manufacturing in a Clean Room, where cakes are made in sterile conditions. Clean Rooms are defined by ISO standards. This enables Tiara cakes to have a long shelf life.

The process is automated and computerised and therefore the cake is not touched until it is sealed and packed. The operating staff have special uniforms and enter and leave the Clean Room through an air lock. An important requirement is to keep the Clean Room air handling system operating 24 hours for seven days of the week, said Gunawardene.

The Ritzbury range has expanded and is now the market leader according to external market surveys. The range includes chocolate-coated products, slabs as well as candy bars which was introduced by the company recently.

He added that Tiara as a brand is leading and the demand for cakes is growing. He said, "We have created a unique segment, manufacturing cakes with a long shelf life. At the time we introduced cakes to the market there was no national player. There were many regional players who were restricted to their regions because of the inability to keep cakes long enough after manufacture, which is necessary for islandwide distribution. Today, we command 65 percent of the branded cake market.

AGM Marketing (Chocolates and Cakes) Nadeeja Karunathilake said that the company first started manufacturing portion cakes and it was a huge success and there has been no turning back, since then the company introduced the Tiara Family Layer Cake and the Swiss Roll.

He said earlier all cakes except the butter cake was purchased as gifts. Now it is not so and during the festive season they run short of cakes. He said that cakes can be kept for six months outside the refrigerator in ambient temperature. The demand for Tiara Cakes is high in rural and urban areas.

Karunathilake said that in the chocolate market too, they enjoy a market share of 45 percent and continuous innovation, quality of products and affordability are factors leading to our success.

The GoJelly range is made using Carrageenan, a product made from Red Seaweed and is therefore a vegetarian product. Since Red Seaweed is grown in tropical waters CBL has started a pilot project in Batticaloa to grow seaweed engaging fisher families.

This activity is part of the Group's policy of sourcing raw materials locally wherever possible. Cereal and Candy bars are two new products launched by the company. Cereal bars target people who are health conscious and contain cereal and glucose. The cereal comprises several grains grown locally such as green gram and corn and comes in a convenient pack.

Candy Bars are marketed under the Ritzbury brand and have caramel, nougat and coconut centres with chocolate coating. They are also manufactured in a fully automated line.

At present CBL exports to over 45 countries. CBL Foods contribute to these exports with their products and CBL as Group is offering customers a wide variety of products.