Soon after entering into a deal with Warren Tea to buy its four tea estates in Assam, the C K Dhanuka-promoted Dhunseri Tea & Industries is set to buy another two tea gardens from Apeejay Tea Ltd, a part of the Apeejay Surrendra group.
In a stock exchange filing, Dhunseri said the company signed a memorandum of understanding (MoU) on Monday with Apeejay Tea Ltd for the acquisition of two tea estates located in Tinsukia district of Assam for Rs 109 crore.
Dhanuka said the Apeejay estates being acquired were its best.
The acquisition would give Dhunseri a bigger pie in the Assam tea market. Last month, the Dhunseri group entered into a pact with Warren Tea for its four estates in Assam. Till then, Dhunseri’s production was around 6.5 million kg. With the Apeejay deal, the production is set to increase to 14.6 million kg (mkg), including some bought from small tea growers. The two Apeejay estates produce around 3.1 mkg.
“Next year, the production target is 13 mkg from its own leaf. And Madhuting Tea, a sister concern of Dhunseri, the group is targeting a production of 1.6 mkg in the coming season,” said Dhanuka.
Dhanuka’s move to acquire tea gardens in quick succession is a contrarian play in an industry marked by financial stress because of rising cost, stagnating tea prices and low returns. The proposed sale by Warren, for instance, would mark its exit from plantations as the group prepares to focus on businesses with higher returns on investment.
