CCL PRODUCTS (INDIA) LTD (CCL) Q3 FY23 Earnings Concall Transcript

CCL PRODUCTS (INDIA) LTD (NSE: CCL) Q3 FY23 Earnings Concall dated Jan. 19, 2023

Corporate Participants:

Praveen Jaipuriar — Chief Executive Officer

Challa Srishant — Managing Director

Analysts:

Abhishek Navalgund — Nirmal Bang Equities — Analyst

Lokesh Maru — Nippon India Mutual Fund — Analyst

Baidik Sarkar — Unifi Capital — Analyst

Srikrishna Sonti — JM Financial — Analyst

Kashyap Javeri — Emkay Investment Managers — Analyst

Manoj Gori — Equirus Securities — Analyst

Richard D’souza — SBI Mutual Fund — Analyst

Akhil Parekh — Centrum Broking — Analyst

Amar Maurya — AlfAccurate Advisors — Analyst

Amol Rao — Kitara Capital — Analyst

Zubin Pruseth — Ambit Investment Advisors — Analyst

Rohan Gupta — Nuvama Wealth Management — Analyst

Himanshu Nayyar — Systematix Group — Analyst

Vidit Shah — IIFL Securities — Analyst

Sameer Deshpande — Fair Deal Investments — Analyst

Rakesh Wadhwani — Monarch AIF — Analyst

Devanshu Sampat — YES Securities — Analyst

Presentation:

Operator

Ladies and gentlemen, good morning, and welcome to the Q3 FY ’23 Earnings Conference Call of CCL Products India Limited, hosted by Nirmal Bang Equities Private Limited. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Abhishek Navalgund from Nirmal Bang Equities. Thank you, and over to you, sir.

Abhishek Navalgund — Nirmal Bang Equities — Analyst

Thank you, Michelle, and everyone. On behalf of Nirmal Bang Equities, I welcome all the participants to CCL Products India Limited Q3 FY ’23 Earnings Conference Call. The management is represented by Mr. Challa Srishant, Managing Director; Mr. Praveen Jaipuriar, CEO; Mr. B. Mohan Krishna, Executive Director; Mr. V. Lakshmi Narayana, our CFO; Ms. Sridevi Dasari, Company Secretary; and Mr. P.S. Rao, Consulate Company Secretary.

Without further ado, I would like to hand over the call to Mr. Praveen for his opening comments, and then we’ll open the floor for question and answers. Thank you, and over to you, sir.

Praveen Jaipuriar — Chief Executive Officer

Thank you, Abhishek, and thank you, team Nirmal Bang, for arranging this call. I wish all the participants a very Happy New Year. And [Indecipherable] are concerned, here are the highlights.

The group has achieved a turnover of INR535 crores for the third quarter of ’22 to ’23 as compared to INR423 crores for the corresponding quarter of the previous year. And the net profit stands at INR73 crores as against INR58.47 crores for the corresponding quarter of the previous year.

The EBITDA is INR101 crores, and profit before taxes, INR70 crores. These are the major highlights. We already announced our expansion for the FD plant at Vietnam. And I open the floor for questions.

Questions and Answers:

Operator

[Operator Instructions] We have the first question from the line of Lokesh Maru from Nippon India Mutual Fund. Please go ahead.

Lokesh Maru — Nippon India Mutual Fund — Analyst

Thanks. Congratulations, sir. I had a question on the new FD capacity and wanted to understand the unit economics there. So what if INR100 per kg is our EBITDA, what is the kind of spread that we fetch usually on the freeze-fried side?

Praveen Jaipuriar — Chief Executive Officer

So generally, the freeze-dried per kg EBITDA will be anywhere 30% to 40% higher than the spray-dried EBITDA, and that is what we’d expect from [Technical Issues].

Operator

Sir, sorry to interrupt, sir your voice broke actually. Can you please repeat your last line?

Praveen Jaipuriar — Chief Executive Officer

Is it audible now?

Operator

Yes, sir, please proceed.

Praveen Jaipuriar — Chief Executive Officer

Yes. So what I was saying is that generally, our freeze-dried EBITDA will be anywhere between 30% to 40% higher than the spray-dried EBITDA. And that is what we’ll expect from this new line in Vietnam as well when it gets commissioned.

Lokesh Maru — Nippon India Mutual Fund — Analyst

Okay. And given the numbers, which were posted on the exchange, the investment the capitate incur on this is usually how your…

Operator

Mr. Maru, I would request you to come closer to your headphones and please speak. We are not able to hear you clearly.

Lokesh Maru — Nippon India Mutual Fund — Analyst

Am I audible now?

Operator

Yes, please proceed.

Lokesh Maru — Nippon India Mutual Fund — Analyst

So also, given the capex number that you have mentioned on the exchange, is it right to assume that usually capex for the FD capacity is somewhere between 4.5 — 4 to 5x higher per tonne as compared to the spray-dried one?

Praveen Jaipuriar — Chief Executive Officer

4 to 4.5x higher? Okay, okay. So we had to do the mathematics. I haven’t seen the numbers this way. So yes, you’re saying for 16,000 tonnes, we had announced around 30 million, and this is for 6,000 tonnes, which is one-third. Yes, yes, I think you have done the math right. It will be that many times higher.

Lokesh Maru — Nippon India Mutual Fund — Analyst

So for the overall 32,000 capacity approximate comes at INR15 crore per 1,000 tonnes. For this one, it is approx 70 crores, right? So from ROCE point of view at optimum capacity utilization, maybe the ROCE for this one will be half approximately 15% to 20% compared to approx 30% that we are seeing at optimum capacity for the spray-dried one, right?

Praveen Jaipuriar — Chief Executive Officer

1.4 versus 1.9. 1.5 versus — 1.5 ROCE versus 1.9. So it is not half of it. It is approximately 40% lower than that.

Lokesh Maru — Nippon India Mutual Fund — Analyst

Understood. Understood. Sure, sir. So are we seeing any demand visibility on this side? And what is the time line as such? Last question from my side.

Praveen Jaipuriar — Chief Executive Officer

The time line is that quarter three of ’24 this ’24-’25 is where we will — is where we — is the time line we are looking for commissioning. And we have — freeze-dried, in our previous calls also, we had indicated that only when we get a fair bit of confidence that the volumes are [Technical Issues]…

Operator

Sir, your voice is breaking. Can you please repeat the last line?

Praveen Jaipuriar — Chief Executive Officer

Okay. So what I was trying to say is that freeze dried, as we have been informing in our earlier calls as well because, one, it is an expensive capex and second that the plant needs all the time. Even if you get the content of our orders, which we are now because we’ve been talking to some of our associates who have kind of given us this confidence to get these quantities as this [Indecipherable] case expansion for today.

Lokesh Maru — Nippon India Mutual Fund — Analyst

Sure, sir. Sure, sir. And some numbers point of view, utilization would be the pickup in utilization would be the same, like you’d highlighted earlier, 30%, 55% and 80% in the — for second and third years, respectively. [Indecipherable] right?

Praveen Jaipuriar — Chief Executive Officer

Freeze dried, as I was telling you that we have already got a lot of transformations from some of our speed. So it will be closer to 50%, 60% in the first year itself.

Lokesh Maru — Nippon India Mutual Fund — Analyst

Wonderful. I will get back in the queue. All the best. Thank you.

Praveen Jaipuriar — Chief Executive Officer

Thank you.

Operator

We have the next question from the line of Baidik Sarkar from Unifi Capital. Please go ahead.

Baidik Sarkar — Unifi Capital — Analyst

Hello gentlemen. Good morning and thanks for the opportunity. A booking question to start with. How should we understand the lag in correlation between your headline revenue growth this quarter and the EBITDA growth? Was there an inventory markdown that we’ve momentarily taken? How should we understand that? And secondly, I understand the trial runs through the new capacity in Vietnam has started. But when do you think we’ll move into a commercial dispatch mode? And what’s the time line for the utilization you’re looking here?

Praveen Jaipuriar — Chief Executive Officer

Okay. So your voice was a little unclear, but I think what I understood is what you are asking is about a little more insight on our top line and bottom line number for the quarter. And then you’re asking when do we start selling commercially from the expanded capacity of Vietnam. Is that right?

Baidik Sarkar — Unifi Capital — Analyst

Correct? That’s right, Praveen.

Praveen Jaipuriar — Chief Executive Officer

So the — as you have seen us top 10 [Indecipherable] 26.5% at the group level. This is backed by around very low single-digit volume growth. And the reason behind is that we had announced earlier also that we are taking a shutdown in our India plant, and we are doing trials at Vietnam. So we knew that there will be a volume [Technical Issues]…

Operator

I’m sorry, sir, your voice is breaking.

Praveen Jaipuriar — Chief Executive Officer

Is it okay now?

Operator

Yes, sir. Please repeat.

Praveen Jaipuriar — Chief Executive Officer

Yes. So what I was saying is that the off-line value growth is 26.5%, which is on top of around low single-digit volume growth. And the reason for this is that we had already announced a shutdown in our India plant, maintenance shutdown for 20 days, and that led to lower production and therefore, lower sales — volume sales.

And in Vietnam, we were doing pre-commercial trials. So that also took away some days of ours in terms of production capacity. And that’s the reason the volume growth plus [Indecipherable] as the commercial sales for Vietnam capacity has already started. So we are already informed that this quarter, we will be doing commercial sales for the Vietnam capacity. And that’s the reason we stay on our guidance of 20% to 25% volume growth because this quarter, we’ll get that additional capacity [Technical Issues].

Baidik Sarkar — Unifi Capital — Analyst

Okay. But your line was a little patchy. So I actually heard a common part of it. Could you flesh out any of your thinking behind the new capex really, because you answered this to the previous participant, and please — but if we just seem to flesh out in a little bit elaborate manner. Is there a disruption on the supply side that we’d like to take advantage in the free price side? Or is it driven by one of our buyer relationships, but really giving us the confidence to get into expansion more again. What’s the broad thinking here?

Challa Srishant — Managing Director

Yes, this is Srishant here. I think maybe I should explain this a little bit more in detail. See, normally, the indication of [Indecipherable] is something that we will take up maybe a year later, and that was the original plan. But what happened is about three months ago itself, our existing freeze dried capacity got three stores. And our existing customers itself have been asking us for some additional volumes, which we have not been able to provide. And we’ve been in discussion with the new customers in the recent past.

Operator

Sir, what I’ll do is I’ll just connect you back. I would request all the participants to stay connected while I try to reconnect the management now.

Ladies and gentlemen, the line of the management has been reconnected. Please proceed, sir.

Challa Srishant — Managing Director

Yes. So what I was mentioning earlier was that freeze-dried is something that we were actually planning on taking up about a year later. But what happened is three months ago itself, our existing freeze capacity got completely booked till FY ’24. And recently, we’ve added a couple of new customers who have been giving us that projections for the next couple of years. So one of these customers specifically came and told us that if you are willing to set up a new line they are willing to give us a commitment for five years in writing for 50% of the capacity.

So once we got that commitment from that customer, that’s when we put it to the Board, and we said that we’ll go for that expansion. So we have a fair amount of visibility for this new expanded capacity and a commitment from an existing customer, one of the newly added customers.

Baidik Sarkar — Unifi Capital — Analyst

And that usually happens, Srishant. Congrats to the team [Indecipherable] it’s good to know, and thanks for fleshing this out. It gives us perspective. And if I may just end with one last question. What’s the status of the India capex? Are we on track for a 15-month launch from here on? And how should we imagine that coming in?

Challa Srishant — Managing Director

Yes. So we are on track for that. So by March of 2024, we should be up and running in India.

Baidik Sarkar — Unifi Capital — Analyst

And I mean just one last one for me. What’s the status of our domestic branded business. Any comments on how that’s shaping up? And by end of FY ’24, should we to look at a breakeven in that business, how should we manage that part of the business?

Challa Srishant — Managing Director

So on an MIS basis, we already broke even last year itself. And that’s — in fact, that’s one of the reasons why we’re going ahead with this demerger as well because it didn’t make any sense for us to separate it into two entities due to transfer pricing issues. We have to show profit in one entity and a loss and another. It’s actually giving a bit of a misleading information in the market. So the fact that we’ve broken even last year from this year onwards, it will be profitable and growing.

Baidik Sarkar — Unifi Capital — Analyst

Sure. Thanks, and best wishes from my side.

Challa Srishant — Managing Director

Thank you.

Operator

We have the next question from the line of Srikrishna from JM Financial. Please go ahead.

Srikrishna Sonti — JM Financial — Analyst

Sir, first of all, congratulations for a good quarter. So my question is any indication on capacities in Vietnam for the coming quarter, like and what do you think what — any indication on that — for before Vietnam.

Challa Srishant — Managing Director

So for Vietnam, I mean, last quarter, we were actually doing — we started the commissioning part you started taking up some trials or. And now in Q4, that commissioning will be completed.

Srikrishna Sonti — JM Financial — Analyst

Okay. And — okay, all right. And what do you think about the capacities? Like any — like what would your expansion plan? Like what have you planned anything on that?

Challa Srishant — Managing Director

No. So Vietnam in this quarter, we will become 30,000 tonnes of FD capacity in Vietnam. And that additional 6,000 will come in next year, next calendar year.

Srikrishna Sonti — JM Financial — Analyst

Okay, understood. Thank you so much.

Operator

[Operator Instructions] We have the next question from the line of Kashyap Javeri from Emkay Investment Managers. Please go ahead.

Kashyap Javeri — Emkay Investment Managers — Analyst

Am I audible?

Abhishek Navalgund — Nirmal Bang Equities — Analyst

Yes.

Kashyap Javeri — Emkay Investment Managers — Analyst

Congratulations for a great FY ’23. I have three questions. The first one is you mentioned that one of our new customers has given a specific commitment for 50% of the FD capacity in Vietnam. Having said that, have the underlying factors change generally for the market? Because until last quarter, what you were mentioning is that the whole FDC side of the business is in overcapacity and people are finding it literally difficult to sort of freed up their expansions. So have the underlying factors changed? And this is one which is specific to us.

Challa Srishant — Managing Director

So actually, that’s a very good question. One small correction after give actually. The capacity commitment has not been given for Vietnam specifically. The capacity commitment has been given to the organization 50% of the expanded capacity they want us to supply.

Now the FD scenario has not changed in the world at all. In fact, earlier also, we were always operating in the bulk space. But now that a new EOU 2 facility has come online and small packs also have come online, the customer I’m referring to is actually a small pack customer who has given us this commitment. So we will be executing that from India and some of the bulk production which we are currently doing in India, we are planning on transitioning that to Vietnam.

Kashyap Javeri — Emkay Investment Managers — Analyst

Okay. And so in that case, any particular reason why this plant is being put up in Vietnam and not an extension of the existing FDC plant here in India itself?

Challa Srishant — Managing Director

Yes, most of our existing customers, especially after the Russia situation that come to us asking for options of territorial derisking. Today, right now, we are in a position where India and Vietnam have both taken a similar stand with respect to the Russia, Ukraine war. But what if the stance were different? Then it would have been a bigger risk for our customers that would be in Russia or in Europe or in other parts of the world.

So most of the customers across the world now as part of the systems, processes and policies, they want multiple origin suppliers to be onboarded. And if we as a company can offer from two different locations, automatically, we go to the top of the list.

Kashyap Javeri — Emkay Investment Managers — Analyst

Okay. Okay. Second question is on, again, from our previous conference calls, what I recall is that on the working capital side, there were two issues. One was that, obviously, the raw material prices were higher, which means that as an absolute number, the working capital went higher. And second is that because of the shipping routes not working properly, there was a higher inventory, which was also being built up. Any of these problems have gotten sorted out now?

And consequent question is that when we take up this $50 million expansion, and that issue on the working capital also is probably if not subsiding, then by FY ’25, what would our gross debt number be? Would it be crossing a four digit number on, let’s say, INR1,000 crore, INR1,100 crore number?

Challa Srishant — Managing Director

It’s about — so it’s likely to reach around INR1,085 crores, which includes freeze-dried expansion, everything put together. And as you were asking, see, yes, these two changes have taken place. One freight rates have started easing up and the supplies are becoming much more stable now, which is why slowly we are focusing on our inventory levels also coming down. In fact, one of the things you would have noticed also is that though we did a plant shutdown, there has been a similar or, in fact, a similar amount of dispatches, if not maybe slightly more in quarter three also. So — same way, even the working capital cycle is coming down because of this and the — I mean, the transport costs are also coming down.

So obviously, that means that working capital cycle also will ease up a little bit going forward. And actually, the green coffee prices also have come down from the 2,300 levels to right now around 1,900. Came to 1,700 and now that stabilized more or less at the 1,900 levels. Going forward in the second half of this year, we’re expecting a further drop in raw material prices because of Brazil crop and all that. So once that happens, automatically, that working capital also, the requirement will reduce.

Kashyap Javeri — Emkay Investment Managers — Analyst

Right. And last question from my side. Now with the 6,000 tonne announcement, we would be reaching now to almost 76,000, 77,000 tonnes of capacity. Beyond FY ’25, how much growth should one look at? Is there still scope for us to grow at a similar double-digit number even beyond that? Or we would be a fair size of the global market for us to then have a slightly moderated growth?

Challa Srishant — Managing Director

To be very frank, at this point in time, it is difficult for us to give a projection beyond three years, but our fair understanding of the market is quite simple. End of the day with the economies of scale and our current positioning where we are, we are present across the world.

We’ve established ourselves as reliable partners for our customers across the world. We are getting into value-added products. So that gives us a lot more credibility in market, which is also one reason why we’ve been getting not only existing customers. New customers are also coming on board and our volumes have been increasing.

There are certain markets, which we haven’t even started tapping into, again, because we were running at peak capacity till now. Our idea is we’ve already started developing partners in different territories. And depending on how things are, if you are able to ramp up our volumes and the utilization comes to the levels that we are projecting for the next three years, we will look at setting up maybe another unit outside India and Vietnam.

Of course, there are a couple of options which we are looking at. But that, again, at least, for two to three years, we won’t be acting on that. We’re just creating a market first. There are a couple of customers, in fact, have given us offer saying they want to partner with us. So a lot of options are always there on the table. We haven’t decided or concluded on anything right now. We’ll first grow the market, create a volume base in that territory, and then we’ll take a call if you have to set up a unit.

Kashyap Javeri — Emkay Investment Managers — Analyst

Okay. Thank you so much sir. That’s it from my side and all the best.

Challa Srishant — Managing Director

Thank you.

Operator

We have the next question from the line of Manoj Gori from Equirus Securities. Please go ahead.

Manoj Gori — Equirus Securities — Analyst

Good morning team and thanks for the opportunity. My question here would be, so rightly said like we have been adding new capacities very aggressively. I just want to understand, if you look at from a — so you talked about the new territories and new markets. So can you please highlight like what would be the total percentage of the instant coffee these markets would be having today? Just to understand the addressable market per year?

Challa Srishant — Managing Director

So today, the total instant coffee market size is about 900,000 tonnes. And this is growing at a pace of about 2.5% year-on-year. And market leader, obviously, is Nestle, and they’ve been in this industry for more than 100 years. And after Nestle, in private label, we are the largest manufacturer in the world. And now with these capacities, the next second — and the second private label manufacturer will be about half our capacity — of our expanding capacity.

Manoj Gori — Equirus Securities — Analyst

Right sir. My question was you just stated about getting into new markets. So what would be the size of this market? So probably this would be a new opportunity for us. So just to understand the quantum of this market. This kind of opportunity.

Challa Srishant — Managing Director

So you — if you talk about actually globally coffee, which is being spread across the world, we develop the countries are the main consumers. And these developed countries has already a lot of suppliers, competition and all that. But there are several other countries, which are there, which have high import duty restrictions and because there are no manufacturers locally. All these countries, people are actually paying these duties, taxes and selling it in those local markets.

So our idea was if we can actually create a base back of customers in these markets, then it will be justified for us to explore the option of setting up a manufacturing in Europe, which why they’re talking to existing brand owners and these factors in these markets who are already buying large volumes. So if we address this market in the future, it could be a market of maybe even 100,000 tonnes.

Manoj Gori — Equirus Securities — Analyst

Right. So initially, we would be supplying from India and Vietnam and probably once we get that confidence, we would be setting up new capacities.

Challa Srishant — Managing Director

Exactly. Because again, we don’t want to take any risk or chances unless there is a 100% clear addressable market. We will never take a chance of going in for that expansion. We always in conservative, we even — however conservative. I know everyone things they’re going in for aggressive expansion but from our side, we are still being very conservative with whatever we are selling. We don’t want to take any access to that.

Manoj Gori — Equirus Securities — Analyst

Sure. So secondly, if you look at — when you say that the new commitments are coming from your existing clients as well, when the instant coffee market is growing roughly at around 2.5%, why your clients would be growing at such as aggressively or probably they are changing their suppliers, and they have more confidence in you. And accordingly, you would be having a larger wallet share.

Challa Srishant — Managing Director

Yes. So the answer is actually quite simple today. Until now, our company, we’ve always been under absolute bottom of the pyramid with bulk manufacturing, basic products. Even if you’re doing premium products, we are able to do that at a particular cost price point, which nobody else can actually come close to.

Now from that, we are changing the entire image of the company after we got into FMCG products, after we started getting into our own brand and a range of products that we introduced. Even our customers are in these products that the price is the entire range that we have, and now they have that confidence that we’ve been able to take on the big play even in India. And now they have that much more confidence that we can support them in their respective territories, which is why they are coming on board coming to us. So they want to not only work with us, they want to partner with us.

And after seeing what we have done, we are also realizing that other companies, which are based in say, Europe especially with the current situation that is that if energy prices going through the and multiple other issues coming up and a lot of disruptions being there. They’ve understood that they need right partners who will be with them throughout.

And here, we are one of the very few companies that can offer from two different ligation. For example, the largest manufacturing currently for instant coffee today is still present. The volumes at present, it’s still the largest. But all the Brazilian manufacturers are restricted to use only local raw materials to create products.

For us, there is no such restriction. We can buy raw materials from anywhere in the world, in India and in Vietnam. So our range of products will be much, much wider than what a present can offer. If you look at economies of scale, yes, Brazil will be competitive. But once you restrict yourself to only one raw material and 60% to 70% of the product cost depends on that raw material, we are restricting the world [Phonetic] a lot.

So because the flexibility is what we can provide, we started focusing on that as our strength. And now that we can do small parts and we are state-of-the-art facilities in place, that is giving even customers of the confidence. Customers who thought you will never get these kind of qualities anywhere else in the world, except Europe.

These customers are shocked to find that we have all the necessary certification. We have all the sustainability measures in place. We are doing innovation and R&D constant receive. So the surprise that we are doing so much, which is why normally any customers will sell. So they tried us out last year, they’ve seen the quality consistencies. They’ve been explain happy, which is why we’ve given us tender commitments. So we are actually, in a way, going up that branded chain. And as we are going up that value change is giving us that much more confident that we can keep growing in a very sustainable way.

Manoj Gori — Equirus Securities — Analyst

Right. So we don’t have a commitment, but at least, we have a lot of confidence that we’ll be able to scale up the utilization rates for the new capacities that we would be adding over the next couple of years.

Challa Srishant — Managing Director

So we have a commitment not only uncertainty [Phonetic]. We have working commitment from the customer. Otherwise, we have said that we are not going to go ahead. So after getting a written commitment on me, we made the announcement.

Manoj Gori — Equirus Securities — Analyst

But was we have a lot of confidence.

Challa Srishant — Managing Director

Right now, this is purely confidence because we repeat customers, and we know what we are doing. So we were running short of capacity. Our domestic brands are growing. We needed to free capacity in India also. So strategically, if we have to achieve the growth rate that we had in mind, we had to take a chance. We had to go in further expansion. And Day 1, we are now still running at — I mean, as soon as the commissioning has done, we’ve all submitted samples to customers. We already started getting approval also for the new line. So that gives us the confidence that whatever numbers that we’ve given, we’ll actually stick to that.

Manoj Gori — Equirus Securities — Analyst

Right. And from fourth quarter onwards, should we expect like the outsourcing would reduce significantly given that Vietnam capacity has started with commercial operations?

Challa Srishant — Managing Director

Yes, it will. As a couple of the contracts, which have been that have been next financial year, that’s from April onwards, we are hoping it will become zero. But as of now, we are still outsourcing a little bit because we already have some commitments and some lower bookings and all that. To streamline all that, this quarter also, there will be some outsourcing that we will be doing stabilized rate and everything has to be done in Vietnam. That will also take some time.

Manoj Gori — Equirus Securities — Analyst

Right. And sir, on the freeze rate capacity commitment that we have got from one of our clients. So there, the margins would be normal as compared to the current volumes, right?

Challa Srishant — Managing Director

It’s actually because it’s small packs, a little bit better. But again, whatever assumption because of Vietnam, we look at Vietnam as a complete stand-alone unit by itself. So we’re not assuming those additional margins will come in, which is why if anyone asks for ROCE and all that, we will just take the most conservative numbers. We will not assume that with additional margins will be attributable to that entity.

Manoj Gori — Equirus Securities — Analyst

Right. And sir, last question…

Operator

I’m sorry to interrupt, sir, I would request you to please rejoin the queue. There are many other participants who are waiting for their turn. We have the next question from the line of Richard. This is a from Richard D’souza from SBI Mutual Fund. Please go ahead.

Richard D’souza — SBI Mutual Fund — Analyst

Good morning. Just two, three questions from my side. One is these new customers who are coming in. I mean, could you give a [Indecipherable] on the — whether going to establish brands or superstores or different stores.

Challa Srishant — Managing Director

That actually two of our existing customers — two sub-customers, I should say. One is an established brand by itself and another is a big supermarket chain.

Richard D’souza — SBI Mutual Fund — Analyst

So if you look at the overall picture, Srishant, then could you share what would the presence among the consumers of coffee? Will there be other brands or the coffee change on of? And then how much space do you think we have to grow?

Challa Srishant — Managing Director

Pardon?

Operator

I’m sorry to interrupt. Sir, your voice is fumbled. Can you please use your handset for your question?

Richard D’souza — SBI Mutual Fund — Analyst

I was asking that CCL Products, what would be your presence among the top 10 consumers of coffee?

Challa Srishant — Managing Director

Across the world or you’re talking about India?

Richard D’souza — SBI Mutual Fund — Analyst

World. You’re talking about the world.

Challa Srishant — Managing Director

World. Apart from Nestle, who we are not selling directly to, I think we might be selling indirectly to them. But apart from that, I think almost all the top brands we are only supplying to JD is number two in the world. There are customers, public information.

Strauss is one of our partners for almost 20-odd years. Yes. Several other customers that would be in the U.S., in U.K., Russia, so all the top brands are there. Some of them, I can’t actually name because of our confidentiality agreements. But most of these things are there in the public domain also. And within India also virtually all the start-ups, we are working with anyone who is doing coffee, instant coffee, especially at a thumb connector the other with us. Let it be a [Indecipherable] or Blue Tokai or Coffee, Reliance, Big private labels, all of them, they’re working well.

Richard D’souza — SBI Mutual Fund — Analyst

Good to hear that. So the this is basically a [Indecipherable] and when we reach out [Indecipherable].

Challa Srishant — Managing Director

I can’t hear you clearly.

Richard D’souza — SBI Mutual Fund — Analyst

Just a minute. Can you hear me now, sir?

Challa Srishant — Managing Director

Yes, yes.

Richard D’souza — SBI Mutual Fund — Analyst

Sorry about that. But I was asking that now that we are present with most of the top consumers, and when we reach our estimated capacity of 75,000, 80,000 over the next two, three years, I mean what further after that? Because that 700,000, 800,000, maybe will be about 7%, 8% of the global instant coffee market. So how do we envisage growth after that?

Challa Srishant — Managing Director

So one of the things that we made clear from day one, is we would — we are endeavoring to transition into an FMCG company. So we are actively working on improving our brand presence, not only in India, we’re looking at outside India as well. So we have a road map planned out, and we are ensuring that we will go to only areas of territories where there is no conflict with our existing customers.

So a lot of these distributors who’ve been in the business for several years, they’ve also expressed interest of placing our products in those respective countries. And the partners that we’ve developed, including supermarkets, because of the private label connects that we have with them, they’ve also agreed to place products that are not competing with them directly. So we do have a road map planned out — and the next two, three years, we are going to do the seating, and we’ll see the results after three years.

Richard D’souza — SBI Mutual Fund — Analyst

Okay. Okay. Okay. And one last question for me is on the China market. So what is your approach going to be there, in China?

Challa Srishant — Managing Director

We’re already supplying to the China market from Vietnam directly. And going forward also, we — I mean, we will be addressing this market. It’s one of the fastest-growing markets actually for coffee.

Richard D’souza — SBI Mutual Fund — Analyst

Yes. And could be one of the largest also going ahead?

Challa Srishant — Managing Director

It is already one of the largest actually. Other countries, at least there’s a degrowth here, there’s a substantial growth. And they buy everything, like from the cheapest quality to the most expensive quality. So it’s a very, very wide range market and a bit complex also.

Richard D’souza — SBI Mutual Fund — Analyst

Okay. Okay. Could you share a light on how large is the market right now in China for instant coffee estimate?

Challa Srishant — Managing Director

I saw was around 50,000 tonnes is the capacity — is the consumption that’s taking place right now 50,000 to 55,000.

Richard D’souza — SBI Mutual Fund — Analyst

Okay, okay, thank you. Thanks a lot, thanks to both of you and good results.

Challa Srishant — Managing Director

Thank you.

Operator

[Operator Instructions] We have the next question from the line of Akhil Parekh from Centrum Broking. Please go ahead.

Akhil Parekh — Centrum Broking — Analyst

Yes, all right. Thank you for the opportunity. My first question is on the Vietnam FD plant. I couldn’t get the time line by when it will be commercialized? And how are you planning to fund the expansion?

Challa Srishant — Managing Director

Okay. So Vietnam FD Plant will be up and running by our FY ’24-’25 Q3.

Akhil Parekh — Centrum Broking — Analyst

3Q FY ’25 basically.

Challa Srishant — Managing Director

Yes.

Akhil Parekh — Centrum Broking — Analyst

So December ’24 kind of.

Challa Srishant — Managing Director

Yes. In the quarter, in quarter 3, whether December, October or November, it will vary a little bit. And the cost of the project is about $50 million, around $35 million is the debt [Indecipherable] that we are looking at as of now.

Akhil Parekh — Centrum Broking — Analyst

Okay. Okay. And looking from the previous expansions and the targets we have given for FDC, so would it be fair to assume that this INR350-odd crore would be a peak utilization for this capacity.

Challa Srishant — Managing Director

INR350-odd crores will be peak utilization for what?

Akhil Parekh — Centrum Broking — Analyst

Sales, peak sales from the capacity.

Challa Srishant — Managing Director

From this capacity. Yes. Again, it depends on the raw material prices and all these other factors as well. But assuming about INR360 crores is — with the current levels around INR360 crores is the number.

Akhil Parekh — Centrum Broking — Analyst

Okay. Okay. And can you just put some light on the private label business in terms of a phase where we have reached and are you in line to achieve INR200 crores, plus FY ’23.

Challa Srishant — Managing Director

Private label business?

Akhil Parekh — Centrum Broking — Analyst

Yes, the profit [Speech Overlap].

Challa Srishant — Managing Director

Domestic business.

Akhil Parekh — Centrum Broking — Analyst

Domestic brand, yes.

Praveen Jaipuriar — Chief Executive Officer

So yes, the business continues to grow. This quarter was a little when you compare to the 30%, 35% growth that we were achieving. This is a less growth because we have taken very steep price increases doing some putting some stricter financial controls also. But the YTD growth are intact. We are growing at around 25%. And yes, INR200 crores is what we were looking to achieve. It could be INR10 crores, INR20 crores here or there. But in that range, we will kind of achieve the numbers.

Akhil Parekh — Centrum Broking — Analyst

And this is pure…

Praveen Jaipuriar — Chief Executive Officer

Well as we had said earlier, but there could be INR10 crores, INR15 crores of here or there because we are correcting a lot of things in the market. But the growth momentum, the secondary grows the market share gains, all that is continuing on the same momentum as we were doing it.

Akhil Parekh — Centrum Broking — Analyst

Sure, sure. And this INR200 crores is pure domestic — pure brand business or 70% would be a brand?

Praveen Jaipuriar — Chief Executive Officer

So total will do approximately INR250 crores, out of which INR70 crore. So it will land around INR175 crores or INR180 crores, pure, pure brand.

Akhil Parekh — Centrum Broking — Analyst

And lastly, what’s the total net position right now, and the plans of retailing to the debt in the next one, two years?

Praveen Jaipuriar — Chief Executive Officer

Sorry, we just didn’t get your question.

Akhil Parekh — Centrum Broking — Analyst

Total debt position as of…

Praveen Jaipuriar — Chief Executive Officer

Total debt position…

Akhil Parekh — Centrum Broking — Analyst

And the plans of rebate.

Praveen Jaipuriar — Chief Executive Officer

So India, it was INR146 crores term loan as of now, and working capital was around INR420 crores. And at our Vietnam, it was USD20 million as the [Indecipherable] debt and $15 million is the working capital debt. So it means $35 million is the Vietnam and here, it is around $20 million term debt and around $50 million working capital.

Akhil Parekh — Centrum Broking — Analyst

Okay. Okay. And then fourth, obviously, with this new basic capacity expansion, another $35 million of debt will be added, right?

Praveen Jaipuriar — Chief Executive Officer

But is the FD facility that is getting added.

Akhil Parekh — Centrum Broking — Analyst

Correct. And plans of repayment of the debt.

Praveen Jaipuriar — Chief Executive Officer

It was truly to repay in four years from commencement of commercial operations, that is from December ’25, the repayments for the [Indecipherable].

Akhil Parekh — Centrum Broking — Analyst

Okay. December ’25?

Praveen Jaipuriar — Chief Executive Officer

Yes, ’24 we schedule. Q3 of ’25, we schedule to commence the operations. And one area is the moratorium, that is the December ’25 commences. From there, it was four years repayment period.

Akhil Parekh — Centrum Broking — Analyst

Sure, sure. Sorry. And lastly, the cost of debt would be for this new FDC?

Praveen Jaipuriar — Chief Executive Officer

Just too early. I think it is linked with the SOFR, and we expect SOFR plus somewhere around — the spread that will vary from bank to bank closer to the financial close. We’ll be able to come out of this. It is liked with — all the USD loans are linked SOFR as we all know.

Akhil Parekh — Centrum Broking — Analyst

Okay. That’s all from my side and best wishes for the future.

Praveen Jaipuriar — Chief Executive Officer

Thank you.

Operator

We have the next question from the line of Amar Maurya from AlfAccurate Advisors. Please go ahead.

Amar Maurya — AlfAccurate Advisors — Analyst

Hello? Hello, I audible to you?

Operator

Yes, please proceed.

Amar Maurya — AlfAccurate Advisors — Analyst

Sir, thanks a lot for the opportunity. Majority of my questions have been answered. One, just a clarification. You indicated that this quarter, the volumes were down because of some issues in India as well as in Vietnam. So are you saying that year-over-year volume would have degrown?

Praveen Jaipuriar — Chief Executive Officer

No, it wouldn’t have degrown. So we were low single digit is what I mentioned. So it’s not a degrowth at all. There is no issue. This was a planned shutdown that we took and which announced also. And the next quarter, because of our enhanced capacity, we will catch up on that as well. Okay. So basically, despite, let’s say, low single-digit kind of a volume growth, EBITDA — overall EBITDA, absolute EBITDA had been pretty decent INR107 crores. So basically, are you saying that then the EBITDA per kg or the realization has improved significantly versus, let’s say, the year-over-year. So EBITDA also grew in the same line. So the volume grew by single digits. The EBITDA also grew by single digit this quarter, if you’ll see. So there wasn’t any change per kilo of EBITDA. It remains this thing. So both the volume and EBITDA we have always maintained will grow at the same levels.

Amar Maurya — AlfAccurate Advisors — Analyst

But EBITDA growth, if I’m not wrong, EBITDA growth is around, let’s say, 13%, right?

Amol Rao — Kitara Capital — Analyst

No. EBITDA growth is around 8%. Exact 8%, 8.5% or something like that. And volume growth is, I told you single digit, low single digit. Pretty much both are in line, absolutely in line. And that’s what we kind of maintain that our EBITDA growth will actually more or less follow the volume growth.

Amar Maurya — AlfAccurate Advisors — Analyst

Okay. Perfect, sir. Perfect. Thank you.

Praveen Jaipuriar — Chief Executive Officer

Thank you.

Operator

We have the next question from the line of Zubin Pruseth from Ambit Investment Advisors. Please go ahead.

Zubin Pruseth — Ambit Investment Advisors — Analyst

Am I audible?

Operator

Sir, there is some background noise.

Zubin Pruseth — Ambit Investment Advisors — Analyst

Sir, I’m sorry, I just joined a little late. So I just wanted to know for this quarter, what were the utilization levels for Vietnam as well as India, sir? I think so I missed that part, if it was asked before.

Praveen Jaipuriar — Chief Executive Officer

So if I were to — so initially, we announced that there was a shutdown at our India plant and because of trials at Vietnam plants, we lost a few days of our production. So that way, if you see our capacity utilization would be 75% or so. Generally, which is at 85%, 90% because that’s the maximum you can go to. So that was the capacity utilization for this quarter. But that is, of course, an aberration because of the shutdown that we had taken.

Zubin Pruseth — Ambit Investment Advisors — Analyst

Right, sir. Sir, if you could just help me with the breakup for Vietnam at least. So India, okay, we had shut down, but for Vietnam?

Praveen Jaipuriar — Chief Executive Officer

Vietnam also, we had the commissioning is happening for the new line, the additional 16,000 tonnes capacity line that we have commissioned. So because of that commissioning, there is line to line alignment and all other utility alignment that has to be done, which meant that will be shut down for around five, six days for that unit as well. So that is also the volume that we lost. So there also, the capacity utilization for the current capacity would have been at 80%.

Zubin Pruseth — Ambit Investment Advisors — Analyst

Okay, okay sir. That’s it sir. Thanks sir.

Praveen Jaipuriar — Chief Executive Officer

Thank you.

Operator

We have the next question from the line of Rohan Gupta from Nuvama Wealth Management. Please go ahead.

Rohan Gupta — Nuvama Wealth Management — Analyst

Hi sir, good morning and thanks for the opportunity. Sir, question is on our long-term growth perspective. So as we — by FY ’25 probably will be roughly 65,000 to 75,000 tonnes capacity up and running that will be close to 7% to 8% of the world, global market. And you mentioned that by that time, probably the second largest player will be almost half of our capacity. So we will be having a fair large market share globally, though it will be in a global context, it may be only 7% to 8%.

Do you see, sir, that this global market will keep on relying more and more on outsourcing and the market will be getting more and more consolidated in the hands of larger player like you, so you can gain more market share and drive the further economies of scale and geographical distribution? That’s what you have mentioned, that is working in favor of fiber for you right now the most. How the market will change it after FY ’25 is some indication?

Challa Srishant — Managing Director

Coffee market, instant coffee, traditionally, apart from one or two big companies having their own manufacturing, almost all of the companies have realized that brand is where the money really is. So they’ve always been outsourcing. Nobody wants the headache of manufacturing products, creating new products. They just look for the right partner who will create these products.

And we have positioned ourselves as the right partner for most of these people. So it could — like, for example, a few days ago, we get this news that Blue Tokai did the fund raise and they’re doing really well. Immediately, we start getting inquiries from other companies who are interested in introducing their own products. Now obviously, it doesn’t make sense for them to consider setting up their own manufacturing unit, but benchmarking companies like Blue Tokai, they want to get into the space. So they’ll have to come to people like us and buy the products.

And we’re one of the only companies that can offer the entire range of products that will actually distinguish themselves from the existing people who are already there in the market. We’re creating so many new products in our portfolio that we can actually offer a wide range of products to customers. So we really don’t see that changing any time soon in the international market also.

There is a possibility that if a brand is extremely successful, if they feel that the supplies are getting threatened, they may want to acquire existing factories or want to have their own manufacturing. But date have not seen that happen. We’ve seen brands with manufacturing, selling that manufacturing units are shutting down the manufacturing units because it feels easier, much more economical and safer to just procure from our existing manufacturers. So that is what we’ve seen in the global context till now.

Rohan Gupta — Nuvama Wealth Management — Analyst

Sir, you have also mentioned that you have recently got customer confidence or assurance for the lifting almost 50% of the additional capacity, which we’ll be creating at Vietnam. So — and this is the new customers, which you have acquired? Or this is from the existing set of customers itself, which you have got?

Challa Srishant — Managing Director

As you know, we have partners in different regions. And our partner in one of these regions has acquired two new customers on our behalf. So the commitment that we got is from our existing customers whom we’ve had a relationship for more than 25 years. And the new customer that is acquired, they’ve given a back-to-back commitment which is what has been passed on to us automatically.

Rohan Gupta — Nuvama Wealth Management — Analyst

So basically, this is coming through a distributor with whom you are already or a partner with. But this, he has got a new customer.

Challa Srishant — Managing Director

Yes. It’s actually — basically, I wouldn’t call this person as a distributor, I’d say, partner because we are genuinely also partnering with this person with this company. And whoever they have acquired as the customer is basically our customers, who we have helped them acquire. So it’s been for multiple reasons, is being routed through this distributor and partner. They are our face in that particular region.

Rohan Gupta — Nuvama Wealth Management — Analyst

And sir, generally…

Operator

Sorry to interrupt, sir, I would request you to please rejoin the queue. There are many other participants. We have the next question from the line of Himanshu Nayyar from Systematix Group.

Himanshu Nayyar — Systematix Group — Analyst

Hi, thanks for taking my question. So first, just to understand this quarter a bit better. There’s been a sharp jump we have seen in depreciation and interest, and there’s been a negative tax number. So if you can just explain it whether this is on account of commissioning of the new Vietnam capex? Or there is a working capital increase element to this as well, especially the sharp jump in interest for the quarter.

Praveen Jaipuriar — Chief Executive Officer

As explained to you, there is a bit of working capital utilization has gone up from like the previous level. And also, we all know that the rate of interest — yes. The rate of interest, it has been increased for the last almost where we all witness RBI from [Indecipherable] it has gone up to 600%, which has reflected in interest rates that are being extended by the brand. So because of the rate of interest increase and the volume of working capital increase, the interest cost unit finance cost has gone up. The second thing, the capitalization of the growth [Phonetic] on the packing facility has been declared in the month of September. And due to that, the additional depreciation has come in play.

Himanshu Nayyar — Systematix Group — Analyst

Okay. And on the tax, you can explain, I mean, is there any one-off adjustment there?

Praveen Jaipuriar — Chief Executive Officer

No — yes. This is having capitalized the acting facility, we could claim we are eligible to claim edition depreciation, thereby, the tax is addressed on the MAT rate against the book profit. So hence, you would see that when we account for the MAT rate, combining the nine months operations, we think the reflection can be seen that the path is more in terms of [Indecipherable] level.

Himanshu Nayyar — Systematix Group — Analyst

So FY ’24, can you guide us broadly, what should be a blended tax rate that we should be building in, sir?

Praveen Jaipuriar — Chief Executive Officer

It is likely to be somewhere around 18%. We have this year we start about — ’23 financial year, we are likely to end up at 18% the tax rate. And next year, we have the MAT credit, we are likely to end up around 22%.

Himanshu Nayyar — Systematix Group — Analyst

Got it, sir. And second and final question would be your medium-term volume growth outlook is well understood. But would you want to give any guidance for FY ’24 as such? Because from where I see it, given that outsourcing will go down to 0, as you said, which will get replaced by new volumes from Vietnam. And earlier, we had talked about — we talked about a 50% utilization. So that means about 8,000 tonnes. So net-net, are we looking at only a 5,000-tonne sort of incremental volume in FY ’24? 12%, 13% sort of volume growth. Is that a fair assessment?

Challa Srishant — Managing Director

As a group, we’ve already given an indication for the next — actually including this year, 15% to 20% volume growth will be there. This year, we’ve actually enhanced that 15% to 20% to 20% to 25% because of certain extra demand that we’ve seen coming in from the market.

So our initial plan, as I think everyone is already aware, we were looking at doubling our top line, bottom line within four years is what we had told at the beginning of this financial year. So as of now, we are fully on track for achieving that objective. Hopefully, a little sooner. But as of now, we can definitely come to a 15%, 20% volume growth for next year. And we already have commitments in place for about 70% of our target. It’s only a balance 30% that we have to put in place. And during the year, if something changes, we’ll obviously keep updating everyone as well.

Himanshu Nayyar — Systematix Group — Analyst

Got it sir, got it. That’s all from me. All the best to you.

Challa Srishant — Managing Director

Thank you.

Operator

We have the next question from the line of Vidit Shah from IIFL Securities. Please go ahead.

Vidit Shah — IIFL Securities — Analyst

And am I audible?

Challa Srishant — Managing Director

Yes.

Vidit Shah — IIFL Securities — Analyst

Okay. Good. So my first question was just a carryforward from the previous participant. Next year, we’ll have Vietnam capacities coming up. And I’m guessing most of this 15% to 20% growth would come from that company. So wouldn’t the tax rate go down given that Vietnam is a zero tax, or are we starting to pay tax in Vietnam now?

Challa Srishant — Managing Director

No, no. So I think what Mr. Lakshmi Narayana was giving you was the tax rate for India. So if you look at the actual blended tax rate, it will come down further. And you’re like, there is still zero tax in Vietnam for us and the new facilities will still come under the zero tax as of now. Yes. So the blended tax rate will definitely come down.

Vidit Shah — IIFL Securities — Analyst

Got it. And sir, could you just shed a light on the major difference in cost of production between India and Vietnam. Are they similar? Because we’ve typically observed that we make better margins in manufacturing out of Vietnam versus India. And is that true?

Challa Srishant — Managing Director

So actually, if you look at conversion costs, it’s more or less comparable between India and Vietnam because later be labor, later be fuel, everything else is comparable. There is a slight advantage that we get in Vietnam because of availability of local raw material and the lack of additional transport costs bringing it to India.

In India, we are currently not growing sufficient coffee to cater to the requirement that is there, which is why we’re still dependent on imports in India. But Vietnam, there is substantial amount of raw media. Vietnam is the largest robust grower in the world, the second largest coffee grower in the world. And because you don’t have to spend that extra amount of transport automatically, that becomes a cost saving. In the past, in fact, when the transport costs were increasing dramatically. Naturally, our margins in Vietnam also were significantly higher because that cost was not there.

Vidit Shah — IIFL Securities — Analyst

And just some time lines on…

Operator

I’m sorry to interrupt, sir, I would request you to please rejoin the queue. We have the next question from the line of Amol Rao from Kitara Capital. Please go ahead.

Amol Rao — Kitara Capital — Analyst

Good morning sir. Is the capex in Vietnam at our existing facility at backlog? Or is it a new greenfield?

Praveen Jaipuriar — Chief Executive Officer

The same facility.

Amol Rao — Kitara Capital — Analyst

It’s at the same facility.

Praveen Jaipuriar — Chief Executive Officer

Yes.

Amol Rao — Kitara Capital — Analyst

And do we — do the capital costs get lower because we have utilities in place? Do we have infrastructure in place? Does that contribute slightly lower setting up cost?

Challa Srishant — Managing Director

Not really because it — as in the facilities, which are common like office facility, canteen and all, but that also we have to increase our capacities because the number of people will increase. And [indiscernible is something which needs a little bit more of technical know-how.

So our manpower planning is going to be completely different from what it was for [Indecipherable]. So they will be factored in all those additional costs, which is why the project cost also is what it is right now. So there’s no real infrastructure cost savings that’s going to be there. When we built the FD plant also, we’ve optimized it for the people who are there for everything. We’ve optimized everything over there. So this you’ll have to factor in all the costs.

Amol Rao — Kitara Capital — Analyst

Okay, thanks. That was very helpful. And wish you all the best.

Challa Srishant — Managing Director

Yes, thank you.

Operator

We have the next question from the line of Sameer Deshpande from Fair Deal Investments. Please go ahead.

Sameer Deshpande — Fair Deal Investments — Analyst

Good morning. We have good results in this quarter. And in nine months, you mentioned that blended tax rate will be lower. So actually, what would be the blended tax rate for the current year as well as next year?

Challa Srishant — Managing Director

Blended tax rate, it is likely to be around 12%.

Sameer Deshpande — Fair Deal Investments — Analyst

How much?

Challa Srishant — Managing Director

And this will continue even for the next year also.

Sameer Deshpande — Fair Deal Investments — Analyst

Can you repeat, I could not hear.

Challa Srishant — Managing Director

If we did the blended tax rate, it is at 12%. When we get into the FD facility also [Indecipherable], it is likely to go further down.

Sameer Deshpande — Fair Deal Investments — Analyst

Okay. That will be quite good because — continue.

Challa Srishant — Managing Director

Yes, the FD facility also is going to be full-fledged in next year operations. We could see the reflection of the tax rate because the capacity is more at Vietnam end. And the blended level, it will go much further go to the 2% level also.

Sameer Deshpande — Fair Deal Investments — Analyst

Around 12%. Okay. And regarding this working capital, I think it was mentioned, but can you give me the total gross debt and net debt as of today?

Challa Srishant — Managing Director

Working capital at India and it was around INR450 crores. And at the time that it was INR145 crores as of now, so it means that INR595 crores is INR600 crores almost the working capital as well as the term debt at India. And in Vietnam, it was $35 million. $20 million is the term debt and $15 million is the working capital debt, $35 million, it’s almost around INR300 crores. So there INR300 crores, in India, INR600. Total, INR900 crores is the total debt term loan as well as the working capital.

Sameer Deshpande — Fair Deal Investments — Analyst

Okay. And net debt would be around INR800?

Challa Srishant — Managing Director

No, no. This is the debt as of date.

Operator

We have the next question from the line of Devanshu Sampat from Yes Securities. We move on to the next participant. The question is from the line of Rakesh Wadhwani from Monarch AIF. Please go ahead.

Rakesh Wadhwani — Monarch AIF — Analyst

Hi sir. Thank you for the opportunity. So coming to the debt part. So as the green coffee prices are coming down, so there will be a lesser working capital debt in the coming years. Is my understanding correct?

Praveen Jaipuriar — Chief Executive Officer

Not really because the volume of the operations as to consolidation level, it increased because of 30,000 tonnes capacity, the expanded capacity is likely to come on board the next financial year. It is likely to add some — maybe little extent because the capacity from 13,500 to 30,000 tonnes is good, right? 16,500 tonnes capacity is getting added. So proportionately, even though it’s possible on account of green cars prices, but because of the volume, so there is a likely little amount of increase will be there.

Rakesh Wadhwani — Monarch AIF — Analyst

Okay. Okay. And sir, what is the blended rate of interest that we are paying on the debt?

Challa Srishant — Managing Director

In India, it varies from term loans to working capital. Working capital, as we all know that there is an increase in the rate of interest. It is running around 6%, 6.5%. And in Vietnam, the debt is linked with SOFR. As we know that SOFR is around 4.6%, plus the it is working out around 600% there as well.

Rakesh Wadhwani — Monarch AIF — Analyst

Okay. Okay. And one last question from my side. When we look at our growth, it is higher than the overall instant coffee growth globally. So you said the new customers are coming up while the customers are increasing the quantity with us or they more confidence. So just wanted to understand two things from side. What is leading more customer to us? Is it because of the cost that we are able to provide them? Or is it because of the variety that you mentioned on the call?

And who are the customers? Is it brand where people are more coming to you or the big retail chains are coming up or new, the start-ups are coming on? Which were in which customer tie your witness in more growth. Is it the branded or the distributor or the new startups?

Challa Srishant — Managing Director

So it’s actually growth across all quarters, but when the new customers, basically, it’s nothing. It’s more than price. It is the range of products, the quality that we are able to offer, the ability to give them alternate options.

Because we already have our R&D and everything in place, it’s easier for us to supply or give customers what they want. For any other manufacturer, normally, they’ll have standard vanilla-type products two, three or four different blends. Yes, we’re talking about having more than 1,000 different products in our portfolio. And each product being unique in nature, we are able to give a customer any quality that they need for any market that they need. And because of a prior experience, we know what products work in which market.

There are certain products which absolutely do not work in certain markets at all. So all that know-how is helping our customers build sustainable and sustainable brands in that particular region.

Rakesh Wadhwani — Monarch AIF — Analyst

Okay. And sir, with respect to growth from the customer type, is it a constant — is it same from all the customers? Or there’s a particular set of customers like start-ups or the retail cases are doing more? Or is it more or less the same?

Challa Srishant — Managing Director

Start-ups, number of start-ups might increase, but the volumes have been very, very, very small. The actual volumes will always be coming from either existing customers who are increasing their market share or it will come from new players who are in existing brands that want to transition from their existing suppliers over to us.

Rakesh Wadhwani — Monarch AIF — Analyst

Okay. That was very helpful. Thank you.

Challa Srishant — Managing Director

Thank you.

Operator

We have the next question from the line of Devanshu Sampat from YES Securities. Please go ahead.

Devanshu Sampat — YES Securities — Analyst

Yeah, hi good morning.Am I audible?

Operator

Yes. Please proceed.

Devanshu Sampat — YES Securities — Analyst

Sir, two questions. One is on the freight rates. So have they normalized for us? Have they normalized for us yet? Or is it still higher? Or can we expect some savings going ahead?

Challa Srishant — Managing Director

They’ve already normalized now and especially in this quarter. It’s come back from its previous levels.

Devanshu Sampat — YES Securities — Analyst

Okay, okay. And secondly, now with the new FD facility addition, which is obviously a higher value item, and as you mentioned, the commitment for small packs also has been given by the customer. So there will be a high utilization of the same. So can you give us a sense of what kind of EBITDA book number now we are working with because earlier, you mentioned that because of higher spray-dried mix, the number should not change much. But now is there any number that you’re working with for FY ’25, ’26. Maybe some color on that?

Challa Srishant — Managing Director

So FY ’24, ’25, once the line comes online, ’25, ’26 onwards, definitely, we are expecting an improvement in the per kg blended realizations. To be frank, it’s very early for us to tell at this point in time what that number is likely to be.

There are too many moving parts as of now. Even now, like one of the clarifications I’ve given earlier is the commitment we have from our customers is for 50% of the expanded capacity that we’re going to build online but they’re not saying that they wanted from only one particular origin or region or anything like that.

There’s a good possibility that, that volume will be coming from India itself and some of the other products, which we are producing in India will get transitioned to Vietnam. So if you want to look at it on a stand-alone basis, Vietnam unit as a stand-alone unit, then we cannot factor in the additional margins that we’ll be getting into that unit. So that’s why whatever number, whatever ROCE and whatever calculations we are taking, we are always taking the worst-case scenario and then calculating.

Devanshu Sampat — YES Securities — Analyst

Okay, great. Thank you.

Operator

We have the next question from the line of Kashyap Javeri from Emkay Investment Managers. Please go ahead.

Kashyap Javeri — Emkay Investment Managers — Analyst

Yeah, hello, thank you so much for another opportunity. Just one question from my side. In one of your comments, you mentioned the total market for instant coffee is about 900,000 tonnes. And Nestle, which is growing at about 25%. Just wanted to check, within that 900,000 tonnes and 2.5% growth, would Nestle be growing faster than that number or slower than that number?

Challa Srishant — Managing Director

To be frank, we don’t have that kind of data. I know that in certain markets, there has been degrowth for them as well, along with all the other brands. And in some markets, they are in fact having a double-digit growth also. So that kind of information has actually kept confidential.

And it’s because Nestle has a presence across multiple countries. It’s very difficult for us to really comment on what exactly they are doing 2.5% growth, I said is not necessarily growth. I said there’s the overall Houston coffee market growth. And Nestle [Indecipherable] they will not be significantly above this. They’re 40% — they’re a significant share of the market because it won’t be significantly above where we go.

Operator

Ladies and gentlemen, due to time constraint, that was the last question for today. I would now like to hand the conference over to the management for closing comments.

Praveen Jaipuriar — Chief Executive Officer

And I just wanted to thank all the participants and we are looking forward to talking to all of you again next quarter.

Operator

[Operator Closing Remarks]