Packet tea blender-and-retailer Gujarat Tea Processors and Packers Ltd, owners of the Wagh Bakri brand, is planning to acquire tea gardens in Assam. It is also in the process of creating a war chest to the tune of ₹150-200 crore to fund these acquisitions.
According to its Chairman and Managing Director, Piyush Desai, the company is looking to acquire 6-10 plantations with a total capacity of 0.8-1 million kg (mkg). The proposed foray into plantations was driven by the need to grow premium CTC variety for subsequent sale in branded packets.
“We currently have no control over the kitchen (production). We are looking at acquiring 6-10 gardens in Assam adding a total production of nearly one million kg,” he said.
The company has three brands – Wagh Bakri, Good Morning and Mili – under its stable. While Wagh Bakri and Good Morning operate in the premium segment, Mili is a mass brand.
Funding pattern According to Desai, the Wagh Bakri Tea group (Gujarat Tea) was willing to raise the amount required for acquisition from private equity players or through bank loans or a mix of both. There are no immediate listing plans though.
“Most likely we will opt for private equity for funding the acquisition. Bank loans too can be explored. However, we do not have any plans to float an IPO at the moment,” he said.
The Ahmedabad-headquartered company is a dominant player in Gujarat, followed by Rajasthan, Maharashtra and Delhi. It reported a turnover of ₹950 core in FY-15 and is targeting a 10-15 per cent sales growth this fiscal.