Wagh Bakri Tea group plans to enter coffee segment

The company is yet to decide on the coffee brand, but will not extend the current equity of the Wagh Bakri brand to coffee

August 11, 2015 03:17 am | Updated March 29, 2016 02:27 pm IST - KOLKATA:

The Wagh Bakri Tea Group, which is part of a 52-year-old Gujarat tea trading and blending company, and among the biggest tea traders, is now getting attracted to the strong aroma of coffee.

The group, which is now engaged in tea trading and blending tea besides running tea lounges, is planning to launch a coffee brand, Piyush Desai, Chairman and Managing Director of Gujarat Tea Processors & Packers Ltd. said. Gujarat Tea Depot was the precursor of GTPPL.

He told The Hindu that the company was yet to decide on the coffee brand, but will not extend the current equity of the Wagh Bakri brand to coffee. A total of 40 million kgs of the Wagh Bkhri brand is sold annually in western and northern India. Maharashtra is the largest domestic market for tea consuming 85 million kgs , followed by Gujarat at 65 and Punjab. The Ahmedabad-based GTPPL also buys tea from the auction centres in Kenya’s Mombasa and Colombo, Sri Lanka for blending with Indian teas.

GPPL, which had an annual turnover of around Rs.900 crore, is also present in modern retail and has tea lounges in Delhi, Mumbai and Ahmedabad. It is now planning to scale up and hive off this business into a separate subsidiary

Addressing reporters, he said that the board has also okayed a proposal to enter the tea plantation business and was on the lookout for the right opportunity.

“Our requirement is for about 6 to 10 gardens with an output of a million kgs each. We have cash reserves of around Rs.200 crore and also expect to get private equity support as well as bank loans. But, we will wait and watch before taking a plunge as there are a lot of uncertainties in the Indian tea industry,” he said.

He mentioned in this context the current Tea (Marketing) Control (amendment) Order, which has mandated that 70 per cent of the tea produced by small tea growers, should be sold through auction Guwahati and Kolkata.

He feared that this will put additional costs on small tea growers, adding that supplies may be affected due to this.

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