Under the joint venture, called KBH&C Ethnic Tobacco India Private Limited, the company proposes to export 5 million kg of Indian tobacco valued at Rs 100 crore in the current year and has set a target to achieve 25 million kg by 2013, T Murali Mohan, managing director of Ethnic Tobacco, told mediapersons here.
To attain the export target and to meet the global demand assured by the JV, in which Ethnic will hold 70 per cent, Mohan said the company was proposing to set up a tobacco threshing plant near Guntur at an investment of about Rs 60 crore.
“The plant will have a capacity of 36 million kg a year and the commercial operations are scheduled from the Andhra crop season 2010, auctions for which will start from February 2010,” he added.
KBH&C Portugal is part of the 65-year-old KBH&C Brazil, which is promoted jointly by US-based Hail and Cotton Limited, JE Barker International Tobacco Co of the US and Brazil’s Kennenberg. The volume of business currently being handled by the Brazilian company is 60 million kg of tobacco valued at $300 million a year.
This is an interesting deal and a good deal for Ethnic Tobacco India Limited.
Stamford Capital is an International M&A firm based out of Stamford, CT. We are active in this sector and have in house industry expertise in the food/consumer goods sector.
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