How to swing from tea to tee, Khaitan style

Corporate India’s golf champion from the East, Aditya Khaitan, MD of tea major McLeod Russel, became an accidental businessman since golf couldn’t become a career back in the 1980s. He picked up the game from his elder brother Deepak Khaitan when he was all of 18. He then played on the amateur circuit, both nationally and for east India, with many who rose to become India’s top professional players –   Jeev Milkha Singh, Arjun Atwal, Daniel Chopra, Gaurav Ghei and Uttam Singh Mundi.

“My first win was the West Bengal Amateur Championship and that was followed by some in the rest of the country, after which I had to move to corporate golf and pursue the family business,” he says matter-of-factly.

Today, McLeod Russel, by its own admission, is the world’s single largest tea company that employs about 90,000 people and produces about 110 million kg of which nearly half is exported. Khaitan’s firm has gone from Rs 300-crore in 2001 to about Rs 3,000-crore last year.

This aggressive growth was dimpled with struggles but enhanced by buyouts.
McLeod Russel came into being in 1869, when Captain J H Williamson and Richard Boycott Magor, two Englishmen based in Calcutta, formed a partnership firm, the Williamson Magor & Company, to service the requirements of tea estates in Assam.

In the mid-2000s, the company adopted the strategy of growing through acquisitions, particularly so when the times for tea were bad and the market was down. It took complete charge of Williamson Tea Assam from the Magor Group based in the UK. In quick succession, they bought Doom Dooma, Borelli, Moran and other tea estates in Vietnam, Uganda and Rwanda.

Today, Khaitan looks at these as smart decisions in hindsight because they stuck with the business when many others were looking to exit. Even now, Khaitan admits, it’s an unglamorous business to enter as “it is primarily an agricultural business with no oomph. When you invest today, you have to deal with land issues, labour problems. It’s not an easy business for those from Harvard or Wharton. It’s a boring business and a long-term commitment.”

Like in golf, the tea business also has its swings. With a global market play, the beverage is priced in line with international supply and demand. Production is not likely to surge any time, given that few are entering this complex business.
After all, investment in a tea plantation takes at least eight to ten years to bear fruit.

Moreover, globally, there is a shortage of tea and so, for now, Khaitan is confident the pricing of tea will remain firm. As more Indians falls into the tea-bracket (above 25 years of age), the consumption is set to go up – particularly in the new glossy and fashionable avatar of the chai. Interestingly, as Khaitan reveals, India’s consumption is pretty low at 750 gram per person. “We expect this to grow tremendously. For example, the rural market alone is growing between 3.5% and 4%, which is a good rate of growth.”

But even as Indian tea was strengthening its roots in the world, Khaitan ensured he didn’t ignore the other tee. He has long kept up with his golf by playing some of the best corporate tournaments and carried back a few trophies too.

Khaitan’s love for the game is reflected in both his support for the sport and his individual interest in conquering its various bastions from global courses in Scotland to playing with icons. Despite Khaitan’s exit from the circuit decades ago, east India’s golf scene would remain incomplete without his presence in most tournaments.

Shaili Chopra is an award-winning business journalist and founder of www.golfingindian.com