Mohani Tea factory in Jalpaiguri to open next year

Ramesh Chand Agarwal prefers to be identified with the small-scale sector, but as Managing Director of Mohani Tea, he is thinking big.

The North India-based tea packaging and marketing company, with an annual turnover of ₹275 crore, claims a large market share in Uttar Pradesh and Uttarakhand. By 2015, the Noida-headquartered company, which began operations in 1992, is targeting a turnover of ₹400 crore by expanding into Rajasthan, Haryana and Himachal Pradesh.

On the export front, the company is eyeing substantial business in CIS countries, such as Russia and Uzbekistan, where Agarwal says Indian tea is a “big rage.” Edited excerpts from an interview:

How did you get into the tea business in this part of the country, where tea is not grown?

After my studies, I happened to visit my uncle, who managed a tea garden. It was he who gave me the idea of tying up with some gardens and packaging and selling their produce in North India. I started in a small way, and now 11 brands of Mohani Tea are doing well in this part of the country. Basically, our success lies in offering affordable quality tea.

Where do you source the tea from?

We have long-term lease agreements with tea gardens in Assam, Darjeeling and the Nilgiris. We transport tea from there and package them in our three factories in Kanpur. Since Kanpur is a dry area, it is ideal for tea processing. Tea leaves get ruined if there is moisture. We also have a modern warehouse with German tie-up, which can take care of loading and unloading 25-30 trucks a day.

Who is your target consumer?

In North India, our brands sell a lot in smaller cities and rural areas, such as Chitrakoot, Banda, Gonda etc. In bigger cities, such as Delhi, we supply private label tea to retail stores such as More of the Aditya Birla group and the Futures group. We have also tied up with Café Coffee Day for supplying private label tea bags. We supply to the Defence, Railways and Kendriya Bhandars as well. With consumers getting health-conscious, we are now looking at value-added tea bags, such as green tea, slimming tea, anti-ageing tea, beauty tea etc.

Isn’t it more of a marketing ploy? What value-addition do you do for these ‘specialised’ teas?

The demand for such teas is growing. So, we add herbs, sometimes even imported ones. We are already supplying to Himalaya Drug Company and Apollo Pharmacy stores.

What are your expansion plans?

Soon, we will open our tea factory in Jalpaiguri, West Bengal. Land has already been acquired and by April-May 2015, the factory should kick off.

On the export front, we are now looking at the CIS countries, where demand for Indian tea is good. Of late, because of manpower problems, these countries prefer to buy tea bags and packaged tea, rather than buy loose tea and get it packed. So, there is huge scope in these countries.

What do you see as the biggest challenge in future?

I think manpower shortage and uncertain weather will be our biggest challenges in future. The labour in tea gardens for packaging, picking etc do not want their children to do this work.

Also, climate change, such as high humidity or dry weather, will affect tea output, as it is a very weather-sensitive crop. This year, because of insufficient rains, we are expecting a 3-4 per cent reduction in output.