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Packet tea retailer Gujarat Tea Processors and Packers Ltd plans to enter tea production.
The company has recently decided to acquire estates producing a total of 2.5 million kg in Assam and West Bengal. Gujarat Tea Processors is the country’s third largest tea packaging company, owning brands such as Wagh Bakri, Good Morning and Mili Tea.
According to its Chairman and Managing Director Piyush Desai, the acquisition would help ensure supply of quality tea.
“We currently have no control over the kitchen (production). We are looking at acquiring 4-6 gardens in Assam and West Bengal and adding a total production of nearly 2.5 million kg,” Desai told Business Line.
The company’s board has approved up to Rs 800 crore investments, he said in acquiring the tea estates. According to a key official of a prominent tea producer of the country, the last such acquisition in Assam recorded a valuation of Rs 100 crore for 2.5 mkg production capacity.
“Our Board has approved this amount,” Desai said.
Gujarat Tea witnessed nearly eight per cent growth in volume sales to 32 mkg in 2012-13. Premium brand – Wagh Bakri (at an average price of Rs 350 a kg) – accounts for over 80 per cent of the company’s total sales.
Revenues in value terms stood at Rs 750 crore in 2012-13.
The company expects 10 per cent growth in volume sales in 2013-14.
Expansion
Having entered Rajasthan, Madhya Pradesh, Maharashtra, Delhi and Chhattisgarh , the company now plans to expand presence in Uttar Pradesh, Chandigarh and Himachal Pradesh in 2013-14.
The company will invest Rs 40 crore-50 crore over the next two years, he said.
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