Balmer UK to hive off units

Balmer Lawrie (UK) Ltd, a subsidiary of Balmer Lawrie & Co (BLC), is going to hive off its tea blending and packaging business to a separate corporate entity and induct strategic partner thereafter to expand operation.

Balmer Lawrie (UK) at present has two businesses, container leasing and tea blending and packaging. The company now plans to set up a new company which will exclusively focus on tea.

"We hope the restructuring process will be concluded during the current financial year," a company official said.

The company feels the strategic partner will bring in higher plant utilisation. It will also gain from the financial strength of the partner.

Tea sales in the UK market constitute 66 per cent of company's turnover while the remainder of its revenue is derived from container leasing activity and consultancy services which are undertaken outside the UK.

Balmer Lawrie (UK) Ltd sells tea products to the famous London-based retailer Harrods.

The company had reported a turnover of Rs 20.76 crore in the last fiscal and profit of Rs 1.57 crore against sales of Rs 17.31 crore and loss of Rs 58.62 lakh in the previous year.

"Tea blending and packaging operations have shown a significant upswing in turnover and volume. However, margins have been under pressure due to increasing costs, competitive pressure as well as shift in customer's requirement from high margin, low volume products to low margin, high volume products," the official added.