In a bid to pad up its revenues, Jay Shree Tea and Industries Ltd is considering re-entry into real estate development after a gap of almost ten years.
The B.K. Birla Group company, which is mostly into tea plantation and also in sugar and fertiliser in a small way, is exploring ways to develop some of the land parcels available with the company scatted across the country, vice-chairperson Jayshree Mohta said.
“We are looking at the sector, we are still exploring. We have several land parcels within India. We want to see what we can do,” said executive director Vikash Kandoi after Jay Shree’s annual general meeting.
Jay Shree can develop around 2 lakh square feet of built-up area, a company official said.
Investment in the development could be about Rs 30-40 crore, according to Mohta.
Jay Shree has land in West Bengal, Haryana and other states. The projects would most probably be taken up in joint ventures with developers.
About a decade back, Jay Shree forayed into real estate development when times were difficult for tea plantation companies and tea prices remained subdued for years, resulting in losses.
It had then developed some premium luxury apartments in Bangalore’s market Ali Askar Road area, and off Sarat Bose Road and Raja Santosh Roy Road in Alipore, two of the most sought-after addresses in Kolkata.
Jay Shree plans to produce 23 million kg this fiscal, higher than 20.5 million kg produced last fiscal.
“We expect production to be up by about 3 million kg this year. We have again started taking outside leaf, which would be up by 2 million kg this year while our own production would be up by 1 million kg. Out of the total production, bought leaf would be 5 million kg against 3
million kg last year. We will be producing at least 1 million kg more of orthodox,” said MD D P Maheswari.
Tea prices are currently subdued due to oversupply in the global market brought about by higher- than-expected production in Kenya, he said.
“The average all-India price is down by about Rs 8 a kg because of a certain perception of the market. Kenyan production is up but ideally that shouldn’t impact us as no Kenyan tea is coming to India. There is a general surplus but I hope things will start improving,” said Maheswari. The difference between last year and this year’s prices is narrowing gradually, he said.
Prospects of acquiring tea plantations, particularly in Africa, are now difficult as their prices have gone up sharply with few sellers in the market.
“We are trying for overseas acquisitions but it is a little difficult. Not many gardens are available. Valuations have doubled since the time we bought three years back.”
Operations of subsidiary North Tukvar Tea, which runs the North Tukvar estate in Darjeeling, is likely to turn around this fiscal, he said.
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