McLeod Russel targets Rs3,000 crore turnover by FY15

McLeod Russel India (MRIL), the largest integrated tea company in the world with a 102 million kg annual production aims to emerge a 180-200 million kg company in the next five years, with a turnover of Rs3,000 crore by FY15 and to this end plans to acquire tea estates in Africa, Vietnam and India.

In the current year, the MRIL plans to produce 80 million kg of tea from its estates in India, 5.5 million kg from Vietnam and 16 million kg from its recently acquired gardens in Uganda.

Incidentally, MRIL's Ugandan operations are this year expected to yield cash profits of $11 million while the Vietnamese operations are expected to contribute $1.5 million in FY11.

MRIL MD Aditya Khaitan said yesterday: ''Our current market share in the world's black tea market of 2 billion kg is 4 per cent. We expect to double our market share in the next five years. However, it all depends on whether we get estates at the right prices, which can enhance our profitability.''

Khaitan said, ''Global shortfall of approximately 140 million kg at the beginning of 2010 and strong consumption growth, along with production revival in Kenya and Sri Lanka should stabilise the global prices at last year's level. However, stagnant production in India and carry forward shortage should lead to firmer prices in the country. Tea prices are currently ruling Rs 5 per kg higher than last year in North India. The price of quality tea is higher by Rs 15 per kg,'' he said.

In 2009-10, MRIL's net sales were up 28.7 per cent to Rs 1,076.8 crore from Rs 828.9 crore in the previous year. The net profit of the company has shot to Rs 240.3 crore in FY10 from Rs88.8 crore in FY09. ''The net profit has surged 171 per cent largely due to improved prices of our tea. In 2009-10, we have been able to sell tea at Rs 137.3 per kg compared with Rs 111 per kg in 2008-09,'' the MRIL MD said.

Meanwhile, the company's investment in D1 Williamson Magor Biofuel Ltd, a 50:50 joint venture between group company Williamson Magor & Co Ltd and D1 Oil Plc of UK will see its first crop in next 12 months.

The company entered into a joint venture with the UK-based global producer of biodiesel from renewable energy crops, with an agreement to develop jatropha plantations with farmers in north east India. Around 75000 hectares have been covered as of now, under the plantation project.