Companies

Goodricke Group keen to buy more tea estates in Assam

Shobha Roy Kolkata | Updated on November 30, 2020 Published on November 30, 2020

Atul Asthana, MD & CEO, Goodricke Group

Goodricke Group, part of UK-based Camellia Plc, one of the largest producers of bulk tea in the country, is looking to acquire two-to-three more estates in Assam to ramp up its production.

The company, which had acquired two estates in Assam from McLeod Russel last year, added close to 2.5 million kg (mkg) to its total portfolio. During FY-20, the company recorded own crop of 20.20 mkg as compared to 18.63 mkg in the previous year, according to information available in the latest annual report.

According to Atul Asthana, MD & CEO, Goodricke Group, the estates acquired by the company have helped increase the crop base and added to its bottomline.

“We are looking at good opportunities....... when the industry stabilises we are ready to add some more acquisitions into the group. We are looking at two-to-three more estates in Assam,” Asthana told BusinessLine.

The company operates within 18 tea estates spread across West Bengal and Assam and sells bulk tea both in domestic and international markets. The company’s total production is estimated to be close to 32 mkg.

Apart from inorganic acquisitions, the company has been undertaking routine uprooting and replanting activities at its estates with a focus on improving quality of bushes and enhancing productivity.

New business strategy

Goodricke is also in the process of reworking its strategy for export of Darjeeling tea. The company, which produces close to 0.8 mkg of tea from its estates in Darjeeling, holds around 10 per cent share in the overall production of the tea from the region which is estimated to be close to 8 mkg. The lockdown during the peak plucking season in Darjeeling negatively impacted production of the tea, which is largely exported.

“Darjeeling has never been normal after 2017 when the whole industry was shut down for four months (following the Gorkhaland agitation for separate statehood) that is the time when we lost out heavily. Our export markets got occupied with cheaper teas from Nepal and we have never regained those markets. So we need to work in the direction of going back to our customer base and gaining their confidence. That is a major work which we as producers have to do. The strategy needs to be reworked to look for new customers and regain the confidence of customers we have lost,” he said.

Branded tea retail

Apart from selling bulk tea both in domestic and international markets, Goodricke also produces instant tea at its plant in Dooars in West Bengal primarily for the international market. Exports account for roughly around 17 per cent of its total production at around six-to-seven million kg annually.

The company also has a sizeable presence in branded tea retail business.

The company had acquired eight tea brands of Godfrey Phillips India Ltd in 2017. Goodricke already had a strong presence in Madhya Pradesh, West Bengal, Punjab and Haryana and the acquired brands helped strengthen its footprint in Bihar, Uttar Pradesh, Jammu & Kashmir and Maharashtra.

Some of the brands under which the company sells its tea include Goodricke Chai, Samovar, Castleton and Khaass among others.

Goodricke, which posted around 38 per cent rise in turnover at ₹341 crore for the quarter ended September 30, 2020, expects the third quarter to be “good” as well.

The growth in turnover can be attributed to the steady firming up of tea prices due to lower crop this year. Tea prices are higher by about 40 per cent this year as compared to last year as production in North Indian tea estates of Assam and West Bengal is expected to be lower by about 160 mkg.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on November 30, 2020
This article is closed for comments.
Please Email the Editor