Luxmi Tea to buy Mcleod Russel’s Africa tea gardens

‘The ₹149-crore deal will boost Luxmi’s quality tea portfolio’

An Indian tea plantation worker picks tea leaves at a tea garden in Missamari village in Sonitpur district some 185 kms from Guwahati on October 9, 2018. - India is the second largest producer of tea in the world after China. (Photo by Biju BORO / AFP)

Luxmi Tea Company, which came into the limelight with the acquisition of the iconic Makaibari Tea estate in Darjeeling, is aiming to boost its kitty of quality teas through a proposed purchase of the African tea estates of Mcleod Russel India Ltd.(MRIL) for about ₹149 crore.

MRIL, a B.M. Khaitan Group company, through its wholly owned subsidiary Borelli Tea Holdings Ltd., has entered into an agreement with Rwanda Tea Investments Ltd. (RTIL) for selling its entire stake in Gisovu Tea Company Ltd., Rwanda and half its stake in Pfunda Tea Company, also in Rwanda. Luxmi Tea Company and The Wood Foundation, Africa are the shareholders of RTIL.

The total turnover of Gisovu and Pfunda is ₹125 crore, accounting for 5.6% of MRIL’s 2017-18 turnover.

MRIL had earlier sold four Assam tea estates to Luxmi Tea Company, which is more than 100 years old and whose crop averages 23 million kg. It has 12 gardens in Assam, three in West Bengal and five in Tripura, besides a garden in Rwanda with The Wood Foundation.

Sustainable production

Rudra Chatterjee, MD, Luxmi Tea told

The Hindu that this buy fitted with the company’s focus on increasing its supply of tea which were of good quality, were produced in a sustainable way and which could be marketed directly to customers.

“Gisovu is almost next door to our existing garden and produces excellent highland tea,” he said.

MRIL entered Africa in 2009, a year after entering Vietnam. It closed the third quarter with a dip in profit (₹53 crore) and a lower crop (149 million kg) with the company saying that figures were not comparable due its sale of 12 gardens since July 2018. Profits at Rwanda gardens too were lower.