Hyderabad, Jan 28 (IANS) Launching its new manufacturing facility in India, Lavazza, world leader in the coffee market, Friday said it plans to develop India as its second largest coffee market in the world.

The Italian firm, which has presence in over 90 countries, began work on its state-of-the-art manufacturing facility at Sri City SEZ at Tada in Nellore district of Andhra Pradesh.

Coming up with an investment of 20 million Euros (Rs.125 crore), the facility will be ready by the year-end and will become fully operational by the middle of 2012.

"With an initial capacity of 1,100 tonnes, the facility will not only meet the requirements for the Indian market, but will become a manufacturing hub for the subcontinent and Asia Pacific," Giuseppe Lavazza, vice president of Lavazza Group, told reporters.

The facility will replace the existing one at Chennai, which was launched in 2007 with an annual production of 960 tonnes. The new facility is expected to have production capacity of 1,400 tonnes in the second year and 1,600 tonnes in the third year.

The firm plans to make India its second largest market in the world in five years. France is presently at the number two position with a revenue of 100 million Euros while India ranks at fifth place with 30 million Euros in revenue and annual sale of 800 tonnes of coffee.

Giuseppe said Italy contributes 60 percent of the $1.5 billion turnover of the family-owned company. The 115-year-old company sells 60,000 to 70,000 tonnes of coffee in Italy every year. Lavazza is the sixth largest coffee roaster in the world.

Marco Lavazza, Development and Acquisition Manager of Lavazza Group, said the setting up of the new manufacturing facility marked the beginning of the second phase of the firm's expansion, which began with its acquisition of Barista Coffee Company Limited and Fresh & Honest Cafe Limited, India's leading coffee vending and retailing company in 2007.

Baritsa Lavazza presently has 200 coffee shops in the country while Barista Crème is present in over 30 locations. Fresh & Honest Cafe Limited has 3,000 coffee vending machines in 22 cities of India.

"With new initiatives, Lavazza will bring the best technology and services to the growing Indian coffee market," said Italy's ambassador to India Giacomo Sanfelice di Monteforte.

Andhra Pradesh's Minister for Major Industries J. Geeta Reddy assured all cooperation from the state government to Lavazza in its initiatives.