Date:04/11/2009 URL: http://www.thehindubusinessline.com/2009/11/04/stories/2009110452071600.htm

Back Dhunseri Tea brewing overseas acquisition plans

Eyes opportunities in Africa, South-East Asia.

“We are exploring opportunities in Africa as well as South-East Asia but nothing has concretised as yet.”

Mr C.K. Dhanuka, CMD

Santanu Sanyal

Kolkata, Nov.3 Dhunseri Tea & Industries Ltd is looking for suitable opportunities outside the country to acquire tea gardens.

Acquisition cost

“We’re looking for gardens with annual capacity totalling 2 million kg,” said Mr C.K. Dhanuka, Chairman and Managing Director of the company.

“The cost of acquisition will vary from country to country,” he told Business Line, adding that money would be no problem as some banks were eager to fund up to 100 per cent of the acquisition cost. Mr Dhanuka, however, declined to indicate the countries he was targeting.

“We are exploring opportunities in Africa as well as South-East Asia but nothing has concretised as yet,” he said.

Labour shortage

Explaining why he was not trying for acquisition within the country, he said the price demanded for local gardens was prohibitive.

Also, labour shortage was a matter of concern.

“”Earlier, there was labour shortage in south Indian gardens but now the north Indian gardens too have been hit,” he said, adding that the higher earnings under National Rural Employment Guarantee Scheme were taking away workers from tea gardens.

Dhunseri has 11 tea estates, all in Assam, with a total production of 10.5 million kg. There is another garden, Madhuting, also in Assam and partly owned by Dhunseri, producing about 1 million kg annually.

Bulk sales

“We now produce about 2.2 million kg of orthodox, being stepped up to 3 million kg, and the entire production is exported through auctions.”

The packet tea, sold mostly in Rajasthan, accounted for 2.8 mkg and the bulk of the production was sold through auctions and private/consignment sale almost in equal proportions, he said.

“We propose to spend Rs 20 crore in the next four years to boost per acre yield of our gardens from the present 2,300 kg on an average to 2,500 kg”, Mr Dhanuka said. “We’re also going for re-plantation at the rate of 2.5 per cent of the plantation area every year,” he said, adding that the total area under plantation was around 11,000 acres.