The Hindu Business Line : McLeod Russel plans foray into domestic packet tea biz

Kolkata June 5 McLeod Russel, the largest tea producing company traditionally in bulk tea business, proposes to diversify into retail sales of packet teas entirely for the domestic market.

"We're examining how to go about it and will hopefully firm up our view on this within the next few months," Mr Aditya Khaitan, Managing Director of the company, told newspersons here on Monday.

Mr Khaitan, however, made it clear that the plan would be to concentrate only on the top-end segment as McLeod Russel mainly produced high quality teas. Also, the marketing would be done by Eveready, a group company already in retail sales of packet teas, though not sourced so far from McLeod Russel.

McLeod Russel, as he pointed out, had identified about a dozen of its total number of 55 gardens for the proposed packet tea venture. Asked if it would be garden-specific packet teas, he replied: "All these and other details are now being examined."

He, however, indicated that the proposed scheme also presupposed introduction of tea bags, though only in the premium category.

Open to buys

Reiterating his earlier plan, Mr Khaitan said the company was open to acquisitions both within the country (Assam) and outside (Africa). "Perhaps in October/November when the gardens are available for acquisition, something might materialise," he said.

"Since we're in volume business, we will target only gardens with production of upwards of five-million kg annually". As of now no plans have been firmed up, he said.

The process of acquisition of Moran Tea, currently in progress, would be completed within a month or so, he said pointing out that a sum of Rs 56 crore had been paid to acquire 86 per cent stake of the company.

The acquisition would boost the company's production by about four million kg to reach a total of 75 million kg annually.

Jatropha cultivation

D1 Williamson Magor Bio-Fuels Ltd, a 50-50 joint venture between D1 Oil Plc of UK and McLeod Russel, Mr Khaitan said, has received FIPB clearance.

About 5,000 hectares had been acquired by way of contract farming in five states for jatropha cultivation and the area would be increased to 50,000 hectares by the end of this year. "If everything goes as per plan, the production of bio-fuel should start by 2008," he added.