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Goodricke Group Ltd will seek the Reserve Bank of India's approval for its foray into dairy business.
According to Mr A.N. Singh, Managing Director and Chief Executive Officer, Goodricke, the company is currently running a R&D (research and development) dairy project at Jalpaiguri district in North Bengal.
Goodricke plans to scale up the project into a commercial venture. It is also exploring the possibility of forward integration by venturing into production of milk powder.
“We are a company formed under Foreign Exchange Regulation Act, 1976, and are permitted only to do tea and tea-related businesses in India. For any diversification, we therefore, need RBI's approval,” Mr Singh told newspersons on the sidelines of the company's 36{+t}{+h} annual general meeting here on Wednesday.
Goodricke started research on the viability of a dairy project with 50-60 cattle about two years ago. The company currently has 120 cattle and produces about 500 litres of milk a day.
“Our R&D project will end sometime in June. We will then prepare a project report and thereafter apply to RBI by the end of this year seeking its approval for our diversification plan,” he said.
The company plans to increase the number of cattle to 2,000 and scale up its milk production to 10,000 litres a day over the next five years. “We have enough land at Lakhipara in Jalpaiguri district and we plan to set up the dairy venture there once we receive necessary approvals from the RBI and the West Bengal Government,” he said.
The estimated investment on each cow will be close to Rs 50,000. This apart, the company will also invest on the infrastructure.
Having a dairy farm will also help ensure backward integration by way of production of organic manure and cow dung. This will help supplement the inorganic fertilisers required for tea production. “Fertilisers account for about six per cent of our total expenses. We want to bring it down by depending more on organic manure,” Mr Singh said.
Tea Garden Acquisition
Goodricke Group is exploring the possibility of acquiring tea gardens in Assam. According to its Chairman, Mr P.J. Field, price realisation is better for Assam tea.
The company currently has 17 tea gardens (12 in Dooars and three in Darjeeling).
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