The Hindu Business Line : Goodricke group bullish on biz prospects

BRITISH tea major, Goodricke Group Ltd, is extremely bullish on the business prospects of 2005 because the turnaround of the Indian tea industry is "clearly visible" and will result in "improved profitability".

The company, which suffered a year's net loss of Rs 8.14 crore in 2003, bounced back into the black with a net profit of Rs 3.21 crore in 2004. Sales of the company also jumped by almost six per cent to end at Rs 193.66 crore against Rs 183.89 crore in 2003.

In the directors' report, the company stated that 2004 had witnessed a breakthrough after a "prolonged recessionary phase".

Though the price of tea plummeted in the last two months, the directors felt the "new season has opened on a firm note".

In this context, the directors' note stated that Goodricke tea attracted "premium prices" and also topped the average prices of the Dooars region. At present, Goodricke has 12 gardens in the Dooars.

"The shortfall in the all India production and an improvement in domestic demand would augur well for the new season," the directors stated. On the company's prospects in 2005, they stated that the instant tea plant was performing well and has a "good order book".

The company also welcomed the recent decision of the Union Commerce Ministry to declare Darjeeling as an agri-export processing zone. Goodricke, which owns three premium gardens in this region, hopes to gain financially from this development.

Meanwhile, in 2004, Goodricke's total exports dropped to 1.52 million kg from 1.69 million kg in 2003. The fall is due to low black tea exports to the West Asian countries.

"Instant tea export increased and has compensated for the lower black tea export to some extent. Exports of instant tea has been made to the UK, Japan, West Asia and the US," the company stated.

Despite lower exports to Iran during 2004 compared to 2003, Goodricke is optimistic about this market because the Iranian Government has removed trade barriers for Indian teas.

Goodricke has reorganised its packet tea business. In 2004, it despatched 4.7 million kg in packets. The company has taken a conscious decision to strengthen its branded products.

"With this in mind, the company has launched region specific brands to take care of the local taste and flavour. Consumer relevant brand extension initiatives are also on the anvil," the directors stated.

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