Financial Daily from THE HINDU group of publications
Thursday, Feb 02, 2006
Financial Daily from THE HINDU group of publications Thursday, Feb 02, 2006 |
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Corporate
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Mergers & Acquisitions Corporate Results - Tea McLeod Russel takes entire share capital of Doom Dooma Our Bureau
Kolkata , Feb. 1 MCLEOD Russel India Ltd has now acquired the entire share capital of Doom Dooma Tea Co, which it recently took over from Hindustan Lever Ltd. The acquisition, for which a share purchase agreement was executed with HLL on January 23, has made Doom Dooma a 100 per cent subsidiary. Mr Deepak Khaitan, Vice-Chairman said McLeod Russel will now continue to have Doom Dooma operate as a separate entity. However, a different strategy may be considered for adoption later this year. No clear proposal has been worked out yet. For the nine months ended December 2005, the company posted gross sales of Rs 254.65 crore (up from Rs 244.65 crore recorded for the corresponding period last year) and a net profit of Rs 31.75 crore (Rs 20.66 crore). Sister concern Williamson Tea Assam Ltd has reported gross sales of Rs 141.27 crore for the nine-month period ending December 2005 (against Rs 158.53 crore) and a net profit of Rs 36.3 crore (Rs 33.47 crore). The average selling price was a shade lower and the companies have been impacted by fuel costs, Mr Khaitan told newspersons. The Indian tea industryis at a critical juncture - especially with auction centres running dry, low rainfall in Assam and higher domestic consumption. The industry's total production - 920 million kg - is the highest ever. However, exports have somewhat stagnated. Yet prices have trended upwards. Competitor Kenya, incidentally, has been facing drought conditions, a situation that could potentially turn into an advantage for Indian teas, it is pointed out.
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