Coffee Day Group buys another 350 acres of estates

It is understood that this 350 acres of coffee estates has 60% Arabic crop, while the rest is of Robusta

Coffee Day Group led by V G Siddhartha which owns close to 12,000 acres of coffee estates across Chikmagalur in Karnataka is on an acquisition spree for more assets. After recently concluding an acquisition to gain control over a company with 900 acres of coffee estates, Siddhartha is buying another 350 acres of estates in that district.

It is understood that Siddhartha has arrived at a transaction to buy Lalbagh East Coffee Estates from a family owning that estate. According to industry analysts, the cost per acre in that section is around Rs 10-12 lakh per acre, but it is understood that Siddhartha has managed to bag this asset at a much lower price. It is understood that this 350 acres of coffee estates has 60 per cent Arabic crop, while the rest is of Robusta.

Siddhartha had couple of months ago completed the acquisition of close to 900 acres under Kumergode Estates, situated in Mudigere Taluk, Chikmagalur for estimated Rs 40 crore. Kumergode Estates primarily cultivates Arabica crop in its estates and also has a small presence in minor crops such as paddy, cardamom and pepper.

Siddhartha, who hails from Chikmagalur, has been over the years rapidly acquiring coffee estates under Amalgamated Bean Coffee Trading Company Limited, which is one of the top three coffee exporters from India. ABCTCL presently has 12 major coffee estates supplying coffee to various countries besides catering to its chain of coffee across India, which is present across 1,500 locations in India.

This move by Siddhartha to consolidate and expand his presence across Chikmagalur coffee estates comes at a time when Bangalore-based real estate developer - India Builders Corporation, has been aggressively expanding its holdings and is understood to have control over 5,000 acres of coffee estates and is looking to consolidate further. In addition to expansive coffee estates, Siddhartha has also established an uber-premium hospitality business under - The Serai - the flagship property of which is situated nestled across close to 70 acres coffee estate in Chikmagalur.

Senior industry sources indicated that Siddhartha has been investing back substantially to develop the society in Chikmagalur through education and healthcare support across various villages and also to take care of the coffee cultivators across the region. "He has an intense passion to develop Chikmagalur and bring in employment generation activities to the region," a senior industry official close to Siddhartha told Business Standard.

In addition to expansive and pristine coffee estates, Siddhartha has also put up a small processing plant, employing locals, to make furniture for his coffee cafes across India. He is also in the process of setting up an another expansive furniture processing unit in Chikmagalur and is understood to have acquired as much as 60 acres for the same.

Even as he is consolidating his holdings over coffee estates, Siddhartha is also understood to be in various stages of raising as much as $100 million at his principal holding company. "He has had discussions with PE funds including TA Associates among others. There has been interest from strategic players as well," senior industry officials indicated to Business Standard.