Jay Shree Tea scouting for more gardens in Africa

Jay Shree Tea and Industries, a part of the BK Birla Group, is working on acquiring yet another tea garden in Africa and is likely to close the deal by end of this fiscal. The company set foot in East Africa a few months back with the acquisition of three gardens.

“Our recent acquisitions in Africa for Rs 30 crore have come at a very competitive price with a payback period of just two years and we are looking to buy more tea gardens there,” said BK Birla, chairman of the company. “We are also interested in markets like Indonesia and Vietnam,” he added.

“We need to strengthen presence in the black tea market. We are scouting for gardens there and will acquire estates at the right time and at the right opportunity,” Birla said.

Jay Shree Tea, which produced around 23.4 mkg of tea from 22 gardens last year, is likely to add another 5.3 mkgs with the African acquisitions done earlier this year. The company picked up 60% stake each in Malta Tea and Gisakura Tea in Rwanda. Apart from that it had picked up the entire stake in Kijura Tea and Bondo Tea Estate. While the first two gardens have a combined production of 4.1 mkgs per year, the latter two gardens have a combined capacity of 1.2 mkgs.

Apart from that, Jay Shree has also tied up with Rwanda Mountain Tea to market 6 mkgs of tea from its gardens.

The company has also tied up with Assam Tea Corp for sourcing green leaf of Longai and Ishabheel tea estates and will also operate the Longai tea factory. Jay Shree Tea is likely to produce 26 mkgs of tea in 2010-11 from 23.40 mkgs the previous year.

DP Maheswari, managing director of the company, said: ?We are hopeful of closing the new deal by end of 2010-11.?

Talking to reporters after the 64th annual general meeting of the company, Maheswari said that the capacity of the sugar mill has been expanded to 5500 tcd which will be on stream in the coming sugar season. “We see our topline crossing Rs 500 crore in 2010-11,” he added. The company is planning to increase the power co-generation capacity to over 20-22 mw from 5 mw at present.