Madhu Jayanti buys Eveready’s packet tea business

Our Bureau Kolkata | Updated on July 01, 2019

Sumit Shah, Executive Director, Madhu Jayanti International Limited   -  Debasish Bhaduri

The ₹390-crore Madhu Jayanti International, which is primarily into the manufacture and export of value-added teas, is looking to ramp up its domestic business with its recent acquisition.

The company acquired Eveready’s packet tea business and its brands — including Tez Red, Premium Gold and Jaago — for ₹6 crore. The combined sales volume of these three brands is estimated to be close to 3.8 million kg (mkg), and the value is pegged at around ₹68 crore.

Madhu Jayanti’s total sales volume is close to 11 mkg, primarily from international markets such as Russia, West African nations, Australia and West Asia. India sales are close to 2.6 mkg. The company sells tea both through its own brands and private labels, either in packets or as tea bags.

According to Sumit Shah, Executive Director, Madhu Jayanti, the acquisition would help add an additional 3.8 mkg to the company’s domestic business.

Madhu Jayanti, which had been largely focusing on international markets, started eyeing the Indian market and expanding here about five years ago. It launched two new brands TE-A-ME teas and Sphoorti on the back of its existing packet tea brands — Saraswati Tea and Lalpan tea — sold in Karnataka and Maharashtra. While TE-A-ME is sold pan India, Sphoorti is largely restricted to Maharashtra.

“With the acquired brands, we plan to strengthen our packet tea business and portfolio. In India, we will look to be a national player rather than being a regional one,” Shah said.

Eveready’s packaged-tea business operates in 14 States: Bengal, Bihar, Jharkhand, Odisha, Uttar Pradesh, Uttaranchal, Madhya Pradesh, Chhattisgarh, Rajasthan, Punjab, Himachal, Gujarat, Maharashtra and Karnataka. So the acquisition will give Madhu Jayanti access to 12 more States apart from Maharashtra and Karnataka.

Domestic sales currently account for nearly 33 per cent of the company’s total turnover at around ₹129 crore. The acquisition of the brands is likely to scale up its value sales to ₹198 crore, immediately. This is expected to further increase to nearly ₹350-370 crore in the next five years, backed by the addition of new brands and expansion into newer markets.

Published on July 01, 2019

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