Attractive Investment Opportunity in a Tea Company in West Bengal

The company is seeking capital infusion of 1.5 Mn USD for expansion and modernization.

The acquisition of this company engaged in tea processing was completed by May 2010. The new promoters are well-established entities in the Tea business and are also engaged in construction, chemicals and coal trading businesses.

Total valuation @ USD 2.8 Mn

The fully functional factory produces CTC, Darjeeling Tea, Liquor Tea (new launch).

The existing production capacity of the factory is 12 Lakh Kg to be increased to 19 lakh Kg after expansion and modernization. The factory site measures 5 acres approximately.

The main product will be "Liquor tea" and will be sold in existing and new markets.

The new promoters have a gross area under plantation of 4000 acres in Dooars region under other companies. They are in the business of tea plantation, processing and trading for close to five decades and have invaluable experience and strong liaisons with all the stakeholders. The market for specialty tea is rapidly growing due to evolving consumption patterns. It is a completely professional setup with trained skilled and unskilled labour.

Opportunity to invest in a rapidly growing business sector of specialty teas – liquor tea in particular, which will be distributed and consumed in the markets of West Bengal, Jharkhand, Orissa and Rajasthan.

The offer is for a stake sale of 50% in the Company on share value holding basis.

Payback period – 4 years

Investor can chose to retain holding on a long term basis or have the promoters buy-back the shares in seven years.

The actual functioning of the processing factory under the new management has started from the 2011-12 fiscal year and results are evident on account of greater process efficiency and better management.

Tea consumption in India is growing at 4% on average as per Tea board. For specialty tea, average growth is higher due to evolving consumption patterns.

A capital of USD 1.5 Mn is required to achieve modernization and expansion, expected to be completed in 5 to 6 months. Production will be increased by 60% with new reduction in cost of produce due to better process efficiency. The new product - Liquor tea will capture the markets of various states where sufficient clientele exists already.

The opportunity is for equity investment of USD 1.5 Mn with a maximum of 50% company holding for the investor.

Opportunity to partner with well-established and entrepreneurial promoters.

Opportunity to invest in rapidly growing business sector of specialty teas – liquor tea, which will be distributed and consumed in the markets of
West Bengal, Jharkhand, Orissa and Rajasthan.

Payback period – 4 years
Investor can chose to retain holding on a long term basis or have the promoters buy-back the shares in seven years.

Hence it is a very attractive opportunity with flexible investment structure.