McLeod Russel to enter green tea biz

Our Bureau Kolkata | Updated on March 12, 2018

Plans to acquire factory in Vietnam

Mcleod Russel India Ltd, the world’s largest black tea producer, is making an entry into green tea through the acquisition of a tea processing factory in Vietnam.

The BM Khaitan group company on Tuesday informed the stock exchanges that Phu Ben Tea Company Ltd, a step-down subsidiary of McLeod Russel in Vietnam, signed an agreement to buy a green tea-processing factory in Vietnam for $820,000 or ₹5 crore.

Annual production

Aditya Khaitan, Managing Director, McLeod Russel, told Business Line that the processing factory was being bought from local owner. It has an annual production capacity of 6 lakh kg.

“We would upgrade the production facility and expand the capacity to a million kg by the end of next season, that is April. This would be our modest beginning in green tea. It would be a learning process,” Khaitan said.

Green tea is produced and consumed mainly in the Far East and South East Asia, but fetches a premium over black tea. In the international market, some Chinese varieties attract fancy prices, according to tea experts.

McLeod’s learning process would, however, start with only processing of tea from locally (in Vietnam) bought leaves. Khaitan said the company was not planning to get into production of green tea right away. According to industry expert, green tea prices are sensitive to the quality of leaves and processing. Vietnam, a known producer of green tea, could prove to be an effective springboard for McLeod to get into the new segment. In Phu Ben, it produces over 4 million kg of black tea at its plantations. It also buys leaves from other producers. The processed black tea of over 6 million is mainly exported.

Published on March 04, 2014

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