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| Wagh Bakri Tea Group eyes 12% market share in 3-5 years |
| Sohini Das / Ahmedabad Jun 06, 2011, 01:17 IST |
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Gujarat's leading packaged tea maker, the Wagh Bakri Tea Group, plans to take its national market share from the current 7.5 per cent to 12 per cent in the next three to five years. To achieve that, the company (turnover of Rs 500 crore last year) has lined up new offerings, including 'instant tea' sachets, as well as region-specific blends.
In the process of putting up a new plant near its existing one, close to this city, it is planning to set up another 15 million kg per annum production facility, with an investment of Rs 40 crore. The site is yet to be decided. Wagh Bakri is also open to set up a production facility in Dubai.
Hindustan Unilever Ltd (HUL) and Tata Global Beverages have 22 per cent of market share each in the packaged tea segment, said Piyush Desai, chairman and managing director of Wagh Bakri. His company, he said was third, with 7.5 per cent, and was clocking an eight to 10 per cent growth rate, even as the packaged tea market was growing at five per cent yearly. “We are aiming to capture close to 12 per cent market share in the next three to five years. We already have presence in Rajasthan, Madhya Pradesh, Maharashtra and Delhi markets, apart from Gujarat," Desai said.
In Gujarat, Wagh Bakri enjoys 50 per cent market share in packaged tea and 25 per cent in Rajasthan. In other markets, it only has two to five per cent and it intends to strengthen these. Besides launching new blends to suit regional tastes, the company says it would come up with instant tea sachets within the next three months. The segment is gaining popularity among travellers, Desai said, adding it was still a new segment in the packaged tea industry. HUL and Tata are yet to set foot in it.
As for its expansion, Wagh Bakri is already in process of adding a new plant near its existing Dholka site (40 km from Ahmedabad), which will enhance the capacity by around 30 per cent. Wagh Bakri packs and sells around 20 million kg of tea per annum. The new capacity will come onstream by August.
Desai said they were looking for a site to put up another new unit, with a capacity of 15 million kg per annum. "We have zeroed in on two or three locations, one in the Gujarat-Rajasthan border and another in South Gujarat. We will take a final call before the year-end. The investment on the new plant would be close to Rs 35-40 crore,” he said.
In the long run, Wagh Bakri is also open to start a production facility somewhere near Dubai. Currently, exports comprise only two per cent of the company's net sales and the domestic market offers more margins. "At present, Indian tea is more expensive compared to Kenyan or Sri Lankan tea, but going forward, we do plan to accelerate our export plans. We now sell tea under the Wagh Bakri brand in the US, UK and Gulf countries. We can put up a plant somewhere near Dubai later,” Desai said.
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