McLeod Russel on the look out for tea gardens

At a time when tea majors like Tata Tea and Hindustan Lever Ltd are turning away from the plantations business, McLeod Russel of the Brij Mohan Khaitan group, is charting growth plans through acquisitions post-demerger from Eveready Industries India.

Deepak Khaitan, vice-chairman, McLeod Russel, said the company after demerger from Eveready Industries India, was looking at growing the plantations business and was eyeing tea estates in Assam.

At present, McLeod Russel has a production of 40 million kg.

The group had a production of 60 million kg in its portfolio prior to the separation with Magors.

Khaitan was confident about the growth of tea consumption in the country and was hence looking at growing the business.

He said, the confidence stemmed from the belief that the gross domestic product would increase and new consumers would emerge from the economic boom.

"Consumption will pick up and so will exports. At the same time, production cannot grow exponentially" he explained.

According to Khaitan, McLeod Russel was now in a position to contemplate acquisitions.

However, the company was not exploring acquisitions beyond Assam.

But, the company would step up its export activities. Khaitan said, McLeod Russel would venture into new markets like Iran, Iraq and Russia.

In the domestic space, the company would cater to quality packeteers, and not restrict to the major packet tea companies.

Khaitan said, the growth plans were being chalked out for the benefit of the shareholders of McLeod Russel, which was now an independent company.

When asked whether the company was planning to bring in a strategic partners for funding its growth plans, Khaitan said, there were no such plans.

It maybe mentioned, the business of manufacture, packaging, marketing and selling of packet tea was originally part of the tea division acquired by Eveready Industries India upon merger of McLeod Russel with Eveready with effect from April 1, 1996.

However, the group decided to demerge the two companies to make it more focused.

The demerger would also facilitate independent funding of the FMCG business (comprising batteries and packet tea) as well as the bulk tea business.

McLeod Russel was expected to be listed soon.