Financial Daily from THE HINDU group of publications
Thursday, Jun 30, 2005
Agri-Biz & Commodities
Corporate - Mergers & Acquisitions
Jay Shree Tea may buy Singbuli, Balasona estates
Kolkata , June 29
JAY SHREE Tea & Industries Ltd, a B.K. Birla Group company, might acquire the two estates of the M.K Bajoria-owned Darjeeling Consolidated Tea Co Ltd.
The company has already taken management control of these Darjeeling gardens, namely Singbuli and Balasona. While the Singbuli garden was brought under its control in October 2003, the Balasona garden came into its fold a year later, in October 2004.
According to Mr D.M. Jain, Managing Director of Jay Shree Tea, both these gardens were making loss at the time of management acquisition. Singbuli garden has already turned around. The capacity of these two gardens is 4.75 lakh kg per annum.
"We are looking at all options. We might acquire both these gardens and subsequently the company also, but no final decision has been taken yet," Mr Jain told reporters after attending the company's 59th annual general meeting.
The company is contemplating merging its subsidiary, North Tukvar Tea Co Ltd, with itself during 2005-06. Earlier, it made a similar move but subsequently dropped it because of the prevailing high salami rates in West Bengal.
In 2004-05, the company sold one of its South Indian plantations. According to Ms Jayshree Mohta, Director, the company has no plan to hive off its other two South Indian gardens as they are generating profits. There are no plans of acquiring any garden in that region either.
She further said the company's infotech business (it runs a call centre) suffered during the last year. "We were new and there were some initial teething problems. Now we have got a hang of things and hopefully everything will turn positive this year," she said.
For the year ended March 31, 2005, Jay Shree Tea has registered a gross turnover of Rs 245.30 crore against Rs 219.06 crore in the previous financial year. Profit after tax almost doubled to Rs 6.28 crore from Rs 3.18 crore.
In the last fiscal, the company's total tea production, including bought leaf operations, was 16 million kg. In the current fiscal, it is likely to increase to 20 million kg.
Jay Shree Tea would soon be increasing its packet tea brand portfolio. At present, these teas are available in Rajasthan, Punjab, Haryana and Delhi. The company is contemplating entering Madhya Pradesh and Uttar Pradesh. Volumes are expected to increase from 35 lakh kg in 2004-05 to 50 lakh kg, this year.
In 2004-05, the company's exports were 1,608 tonnes and its value was Rs 22 crore. In the current fiscal, Mr Jain said, it might go up to Rs 25 crore for 2,000 tonnes of tea.
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