Eveready eyeing regional packet tea brands

Our Bureau

Kolkata, Nov. 1 Three of the B.M. Khaitan Group companies — Eveready Industries India Ltd, McLeod Russel and McNally Bharat Engineering Company Ltd – are looking for Indian and overseas acquisitions.

“Funding acquisitions will not be a problem,” Mr Deepak Khaitan, Vice-Chairman of the Group, told newspersons here on Thursday. “We can raise any amount,” he added.

Packet tea biz

Eveready Industries was looking for acquisitions of regional packet tea brands within the country and reputed FMCG brands outside. “Currently, the packet tea business accounts for about 10 per cent of company’s total business of about Rs 850 crore and we would like to double its size as early as possible,” Mr Khaitan said. The company was looking for acquisition opportunities in Gujarat, Maharashtra and the northern region, he indicated. The company would also invest in promoting its existing packet tea brands, namely, Tej, Classic, Jago and Premium Gold.

Currently, battery and flashlights accounted for nearly 90 per cent of the company’s total turnover. “We would like to gradually reduce the share of battery business such that by 2010-11, the non-battery business accounts for 50 per cent of the company’s estimated turnover of Rs 2,000 crore,” he said.

New ventures

Apart from packet tea, the other non-battery segments in which the company had ventured into included mosquito coil, compact fluorescent lamp (CFL) and dishwasher cakes. “Our debt burden is coming down and we’re out of red and now on the upswing,” he added.

Tea gardens

McLeod Russel, the world’s largest producer of tea, was also looking into opportunities for acquisitions of tea gardens both within the country and abroad. “However, we’re yet to zero in on anything,” Mr Khaitan said. McLeod Russel had no plans to undertake non-tea activity in tea gardens, he added. However, the company’s diversification into bio-fuel in partnership with D1 of the UK was making progress. About 55,000 hectares has been acquired in Jharkhand and North-east for jatropha plantation under contract farming and there was a proposal to acquire lands in Orissa also. “We have written to the West Bengal Government expressing our desire to undertake jatropha plantation in the State but we’re still awaiting a reply,” he said. The first refinery would be set up in the North-east next year. “Our plan is to grow jatropha over 200,000 hectares and produce bio-fuels and the estimated investment would be between Rs 1,500 and Rs 2,000 crore,” he said.

Big bet

McNally Bharat Engineering, according to Mr Khaitan, was going to be the Group’s biggest company in terms of turnover estimated to rise to more than Rs 2,000 crore within three years, up from the current Rs 700 crore. The order book position at Rs 1,500 crore was healthy and the encouraging export orders has prompted the company to open overseas offices in Brazil, South Africa and UAE.

“In the past two years, the CAGR has been 50 per cent and the company is looking for suitable acquisitions in the fields in which it is active,” he said. The new unit in Asansol, which would be the extension of the existing unit at Kumardhubi, would be focussing on modern industrial forgings which were in good demand.

(This article was published in the Business Line print edition dated November 2, 2007)
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