Following the acquisition of Gisakura and Mata tea estates, Jay Shree Tea and Industries has said that it will increase the factories’ output of green leaf tea by 23.4 percent.
The Indian conglomerate recently teamed up with Rwanda Mountain Tea (RMT) to form a joint venture company that acquired equity stake in the two tea factories and estates that have been under government’s control.
BK-Birla Group, which controls Jay Shree, said Monday that this will be the company’s first overseas acquisition in the tea space and would lift production from 23.5 million kilograms to nearly 29 million kilograms in the 2010/11 season.
The company said in a statement that Jay Shree will sign a purchase agreement with the Rwandan government on April 28, 2010.
“We will acquire two tea estates in Rwanda and one in Uganda. The three estates together produce 5 million kilograms of tea,” DP Maheshwari, the Managing Director of Jay Shree said in the statement.
However, he did not divulge into details of the sum of money involved in the deals.
Jay Shree says that it has also finalised plans to enter into a marketing pact with RMT.
According to this tie-up, Jay Shree will also buy 6 million kilograms of black tea through Birla Holdings, its Dubai-based subsidiary.
Both Gisakura and Mata were up for privatisation, inline with government’s campaign to sell off all its tea factories and plantations in order to increase their competitiveness.