 "Goodricke may foray into dairy, horticulture")
Rising costs and low realisations have prompted tea major Goodricke to examine diversification into dairy farming and horticulture.
The company is studying the business potential in these segments. Goodricke plans to set up a dairy in one of its tea gardens and horticultural plantations in others in West Bengal. It is planning a range of dairy products like milk, butter and cheese. It has no plans for export of dairy or horticultural produce.
“The tea industry is in a bad shape and we need to diversify. Dairy is definitely one option. We are also looking at horticulture,” said AN Singh, Goodricke’s managing director and chief executive officer. The company’s revenue rose 11.43 per cent to Rs 658.75 crore in 2015-16 from Rs 591.18 crore in 2014-15. Expenses, however, rose 14.87 per cent to Rs 624.02 crore in 2015-16 from Rs 543.24 crore in the previous year.
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The company posted a Rs 32 lakh loss in 2015-16 against a loss of Rs 12.42 crore in 2014-15. The West Bengal Land Reforms Act, 1955, limits the use of tea gardens for cultivation of tea.
“Once the Act is amended we will start working on the project,” Singh said. The Indian Tea Association is in talks with the West Bengal and Assam governments to amend laws restricting the use of tea gardens. Although Goodricke has a considerable presence in Assam where clearances for diversification are easier to obtain on merit, the company is planning its diversification in West Bengal.
The UK-based Camellia plc owns a 74 per cent stake in Goodricke through Western Dooars Investment and Assam Dooars Investment. The Reserve Bank of India has granted Goodricke a licence to solely carry out business in the tea segment and additional permits will be needed for diversification.
