Wagh Bakri open to 'compelling buy' of tea estates

Leading blender and packeter Wagh Bakri tea group may consider entering plantation business provided there is a "compelling reason" to buy any tea estate, a company official said.
"We entered blending and packaging (space) of tea in the eighties. Plantation is a separate industry and it was never our top priority. But if there is a compelling reason to buy any garden, we will definitely look at it," Executive Director of Wagh Bakri group Parag Desai, who is also a sommelier, told reporters here.
If the group acquires and starts garden operations, it would be a fully integrated one, from bush-to-brand.

Wagh Bakri, which caters largely to west, central and northern parts of the country, buys tea from North and South India and markets packets under four brands.
Desai said the most worrying point for the tea industry remains quality of tea. "We are facing the big issue of procurement of good quality teas within the country," he said.
The group, a closely-held one, buys more than 90 per cent of its requirement from North India (Assam and north Bengal) and the balance from South India, he said.

"For this, we are trying to motivate planters to manufacture good quality teas," he said.

The absence of a permanent chairman of the Tea Board is another area of concern, he said.
The group, which manufactures packets under the premium Wagh Bakri brand besides three others, has its manufacturing unit at Dholka outside Ahmedabad.
"The facility has capacity to manufacture 10 lakh packs per day," Desai said, adding that plans are also on to start an EoU (export-oriented unit) at the same place. "Our next expansion may be outside Gujarat."
With a total revenue of Rs 1,000 crore, the company grew 10-15 per cent in the last decade and has set its sights on 15 per cent this fiscal.

The company exports its products to various countries of the US, the UK, Canada, New Zealand, South East Asia and others. "Our export turnover is only Rs 48 crore now. We want to grow it manifold," the ED said.
Wagh Bakri, running tea lounges in Ahmedabad, Mumbai, Delhi and Goa, has tied up with French food services firm Sodexo for managing them.
"We plan to open more in tier II and tier III cities," he said, who sees some impact on tea prices from GST.