Financial Daily from THE HINDU group of publications
Tuesday, Feb 10, 2004
Jay Shree Tea takes management control of Singbuli estate
Kolkata , Feb. 9
JAY Shree Tea and Industries Ltd, a B.K. Birla Group company, has recently taken management control of Singbuli Tea Estate, an ailing Darjeeling tea garden belonging to the city-based Mr M.K. Bajoria.
The company, which is also a major tea exporter both in the form of bulk and branded packets, has started venturing out into the American market.
Jay Shree Tea hopes to acquire the ailing Darjeeling tea estate only if it succeeds to make its operations financially feasible and for that purpose it has fixed a deadline of March 31, by which it will take a final decision.
According to Mr R.K. Ganeriwala, President (Finance and Corporate Affairs) and Secretary of Jay Shree Tea, the management control of this estate was taken over on October 24, 2003. The garden, which has the capacity to producer two lakh kg of tea per annum, employs 900 people. In the last year or two, the promoter has failed to pay the workers regularly and, hence, there was a huge backlog of workers' payment, including their statutory dues.
From October 24 till the end of the last quarter (December 31, 2003), Jay Shree has suffered a net loss of Rs 26.64 lakh on account of running this garden and it may go up to Rs 60 lakh by the end of the current financial year.
"We are just clearing the due wages of the workers. We are trying to run this garden profitably. The workers are cooperating with us. Let us see what happens by the end of March, this year", Mr Ganeriwala told Business Line.
According to him, this is the first time that Jay Shree has taken control of an ailing tea garden and trying to turn it around. The company is yet to hold any talk with the promoter on whether it will acquire the garden.
"If the functioning of the garden is financially feasible then we will consider acquiring it but that it will be on a different platform altogether. Already there are huge liabilities of the garden and the present promoter will have to negotiate with the creditors", he said.
The company exports tea to the UK, Germany and Japan among other countries. It is either in the form of bulk or branded as Birla Tea. In the domestic market, it has four brands namely Sadabahar, Shaandar, Kalline Gold and Jaandar.
"We are venturing out into the American market. There is tremendous potential. We have already exported a few consignments. We are planning to open our branch office in the US too", he said.
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