Barista brews Rs 200 cr plan

Barista Coffee Company plans to invest Rs 200 crore (Rs 2 billion) in three years for ramping up its facilities.

"The coffee chain would add 100-120 outlets each year in three years. At present, the company has 140 outlets across the nation," said Partha Dattagupta, chief executive officer, Barista, at the Barista Creme launch in Kolkata.

Barista is scouting for investors for the growth plans. Dattagupta said Barista had appointed Stanchart for the purpose and was hoping to close the deal in three to four months.

Also, the Sterling group has committed an investment of Rs 50 crore (Rs 500 million) for expansion. The company is looking at 15 to 20 per cent of equity dilution.

Dattagupta said management control would remain with the Sterling group. Sterling Infotech holds 100 per cent of Barista Coffee Company.

"The dilution is aimed at growing the coffee chain faster. Currently, Barista is in the process of putting the information memorandum together," said Dattagupta.

 The company turned earnings before interest, depreciation, taxation and amortisation positive in December and is expecting to register a net profit in 2007-08. Barista expects coffee chains to grow at 25 to 30 per cent in three to four years.

Apart from adding outlets, the expansion plans include implementing SAP and supply chain management. Barista had also lined up renovations for the existing outlets.

As part of the growth model, Barista was evaluating the franchise model. "We are evaluating the concept of franchise model and may do it in tier II cities," said Dattagupta. Barista recently launched the eastern region's first franchised outlet in Guwahati.

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