The Hindu Business Line : Focus on core competence top priority for Goodricke

Agenda for 2007
Orthodox tea production to be stepped up
More volume of green leaf to be outsourced
Thrust would be given to push packet tea in Bihar and UP

Kolkata April 7 Concentration on core competence i.e., production and marketing of tea, will be the top priority in 2007, according to Mr P.A. Leggatt, Chairman of Goodricke Group Ltd.

Talking to newspersons at the end of the company's annual general meeting here on Saturday, Mr Leggatt made it clear that there were no plans to go for diversification into non-tea areas, at least immediately. The earlier plan to enter into wine business, both by way of imports and undertaking production on its own, would not be pursued in the current year.

"While we always look for new opportunities that will be useful and profitable for the company, we're not considering any major diversification programme including tourism in the current year," he said.

Explaining in details the company's programmes for 2007, Mr A.N. Singh, one of the three managing directors, and CEO of the company, pointed out that the production of orthodox tea would be stepped up by taking advantage of the Tea Board's subsidy scheme.

"Right now orthodox variety accounts for about 27 per cent of our own production of about 2.5 million kg in Assam and it will be increased to 40 per cent in the current year," Mr Singh said. There is also a proposal to increase the volume of green leaf currently being outsourced from smaller growers and special efforts would be made to source it from closed and ailing gardens concentrated in Dooars.

modernisation

An estimated Rs 10 crore, as Mr Singh pointed out, would be spent on modernisation of the factories and thrust would be given to push packet tea in Bihar and Uttar Pradesh.

"The budget for promotional effort is being stepped up to Rs two crore in the current year, up from last year's Rs 1.6 crore," he said. Mr Leggatt conceded that the company suffered a setback in instant tea business having an estimated size of 600 tonnes. A major buyer in the UK switched over to another supplier from another country.

"But we're confident of getting back into the business and there are now encouraging inquiries from buyers in the US and Europe," he observed.

During the year ended December 31, 2006, Goodricke Group achieved a turnover of Rs 221.4 crore (Rs 210.1 crore in 2005) on a total crop production of 19.3 mkg (17.7 mkg) and posted a profit after tax of Rs 5.49 crore (Rs 3.76 crore) and the board of directors recommended a dividend of 12.5 per cent (7.5 per cent). The financial results and the proposed dividend were approved by the shareholders at today's AGM.