The Hindu Business Line : Goodricke's expansion hinges on Japanese deal

WITHIN the next two months Goodricke Group Ltd would take a decision on whether they would set up their second instant tea plant of 600 tonnes a year capacity at a cost of Rs 35 crore.

Mr K.S. David, Managing Director of Goodricke Group, said a final decision would be taken if the company succeeds in striking a deal through Marubeni, the Japanese trading major.

"At present, we are trying to develop a special type of tea as specified by the Japanese. If we succeed then we would strike the deal and thereafter go for the second plant," Mr David told reporters after the 29th AGM (annual general meeting) of the company.

When asked about the details of the Japanese buyer, he preferred not to disclose its identity. Instead, he said, the deal would be through Marubeni. At present, Goodricke's instant tea plant is located in Dooars and its major clients are Coke, Hindustan Lever and some foreign companies.

Meanwhile, the company is gearing up to strengthen its packet tea business. According to Mr David, there was tremendous potential in this sector and Goodricke was trying to cash in on it.

In 2004, Goodricke sold approximately five million kg through packets. In 2005, it is hoping to increase it to six million kg. The company is investing Rs 3-4 crore in brand building exercise.

"By 2009, we would like to increase our packet tea business to 12 million kg. We are also planning to enter the south Indian market soon. Our focus is to take emerge as branded from a mere commodity player," he said.

Earlier, at the AGM, Mr P.A. Leggatt, Chairman, said Goodricke has tied up with Bharat Petroleum Company Ltd for home delivery of packets to their LPG consumers. This would give Goodricke access to 20 million households.

In 2003, Goodricke recorded a net loss of Rs 8.14 crore but bounced back into black with a net profit of Rs 3.21 crore in 2004. Sales also jumped by almost six per cent to Rs 193.66 crore against Rs 183.89 crore in 2003.

Plans to move court over salami issue

Goodricke Group is planning to move the Court against the West Bengal government over the salami issue.

According to Mr David the State Government has asked `salami' for the renewal of leases of two of its gardens in Darjeeling.

At present, West Bengal is charging Rs 9,000 per hectare as salami for any change in the ownership of a tea garden and on renewal of leases. Indian Tea Association has opposed it. No other state government is charging salami.

"This is an unethical practice. We have opposed it in principle. Till now no company has paid a rupee to the West Bengal government as salami. Four or five companies have already moved various courts on this issue," Mr David said.

He said Goodricke too was contemplating a similar move and a final decision would be taken "shortly".

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