Jay Shree Tea & Industries Ltd.

OVERVIEW

Jay Shree Tea & Industries Ltd. is the third largest tea producer in the world. It has 22 Tea Estates spread throughout India with total area of 9407 hectares under tea plantation. We have five Gardens in Upper Assam, five in Cachar, four in Dooars & Terai, six garden in Darjeeling and two in South India. The company also has two tea processing factories which manufacture tea exclusively from tea leaves procured from other gardens.

With the latest acquisitions in Africa , we now have the best teas the African Continent produces.

The company is one of the largest tea manufacturer-exporter of India having exported teas of Rs.76.57 corers in FY 2009-10 and already achieved export turnover of Rs.45.40 corers in the half-year ended Sept 30, 2010 and expected to cross Rs.100 corers in the current financial year. The company has produced 234 lac kgs last year and have already produced 156.50 lacks kgs up to 30th September 2010 as compared to 149.47 lac kgs in the same period last year. The current year-end target is 251 lac kgs of black tea.

THE COMPANY

Incorporated on 27th October 1945, Jay Shree Tea & Industries Ltd. is a part of well diversified conglomerate of  B.K Birla Group. B. K. Birla Group has been in the forefront of industrialization in the country since Independence. An inspiration for generations of Indian entrepreneurs, the Birlas are looked upon as the First Family of India Inc., reflecting quality, reliability and leadership.

Besides tea, Jay Shree Tea & Industries Ltd., is manufacturer of Single Super Phosphate & Sulphuric Acid. It recently made foray into Sugar Industry by acquiring 100% stake in M.P.Chini Industries Ltd. It also provides Tea Packaging and Warehousing facilities at Kolkata and Kochi. The company is also engaged in real estate business having developed several properties at prime locations of Kolkata and Bengaluru.

The core business of the company is Tea accounting for 75.56% of the gross turnover with Chemicals & Fertilizers at 23.52% and others 0.92% during the half-year ended 30th September 2010.

KEY HIGHLIGHTS

1. It is the only tea company in India having tea estates in all the major tea growing areas of the country. All the teas of India under one roof!!
2. One of the few Indian tea companies to have tea estates abroad.
3. Contributing around 3% of the national tea output.
4. Contributing around 11% of the total Darjeeling tea, considered Champagne of teas.

FINANCIAL HIGHLIGHTS

1. 91% of the present paid-up Share Capital is represented by Bonus Issues.
2. First Group to return money to shareholders in the years 2001 and 2002 under buyback scheme of shares.
3. Uninterrupted track record of paying dividend since inception of the company in 1945.  Last 5 years average payout is 33%.

NEW ACQUISITIONS

As per the strategic tie up with Assam Tea Corporation Ltd. the company is  procuring green leaf of Longai and Ishabheel  Tea Estates and operating its Longai Tea Factory  to manufacture 6 lac  kgs of tea per annum from the current season.

The Parvati Tea Company Pvt. Ltd. acquired by it at Makum (Tinsukia)  in the State of Assam is likely to manufacture 6 lac kgs. of black tea during the current year.

The Company through its investment arm, Birla Holdings Ltd., UAE has acquired 100% stake in  Kijura  Tea Co. Ltd. and Bondo Tea Co. Ltd., having tea estates, producing around 14 lac kgs of tea per annum in  Uganda (East Africa). Under a joint venture arrangement, it has acquired 60% stake of Mata Tea Co. Ltd. & Gisakura Tea Co. Ltd., Rwanda. The companies own tea estates in the best quality tea producing belt of  East Africa producing 42 lac kgs of tea per  annum.

The cost of producing Tea in East Africa is lower as there is not much need for application of fertilizers and pesticides in the field because of the better soil condition. Further, the social cost for the laborers is the responsibility of the local Government.

DIVERSIFICATION IN SUGAR

The company has acquired 100% stake in M.P.Chini Industries Ltd.having a sugar factory at Majhaulia in Bihar with a capacity of 4600 TCD, which is being enhanced to 5500 TCD. The factory has co-generation facility of 6 MW and its own sugarcane plantation of around 1000 acres. This is one of the best maintained factories in the State of Bihar and will enable the company to leverage its experience and expertise in managing agro based industries.

TEA ESTATES IN INDIA

PACKET TEA

We are one of the players of Packet Tea Market in India having small market share in states like Punjab, Haryana, Rajasthan, Gujarat, Uttar Pradesh, Madhya Pradesh, Orissa and Himachal Pradesh with brands like Shaandaar, Birla Tea Premium, Birla Gold, Jaandaar, Kalline Gold etc. We are registered supplier to Defence Forces and Indo-Tibetan Border Force. We supply and pack teas for reputed brands also.

ORGANIC TEA

Organic teas are nature friendly, naturally grown and naturally made. The organic process involves planting tea bushes along with leguminous plants, using herbal pesticides and natural fertlisers. Utmost care is taken to preserve the natural flavour of tea. No chemical pesticides are used. This is the purest way of enjoying a good cup of tea. Buyers across the world of Darjeeling teas are now demanding Organic tea and keeping in tune with their demands our company has converted three of our Darjeeling Estates, Tukvar, Risheehat and Sungma into 100% organic and another tea estate Singbulli is in the process of conversion and is expected to be converted by March 2012.

SPECIALITY TEA

We also produce Darjeeling Green Tea, Assam Tippy Orthodox Tea, Oolong Tea, White Tea,and other speciality Tea which have good demand in global markets.

CERTIFICATIONS

All our Darjeeling Estates have Hazard and Critical Control Point (HACCP) Certification and we are in the process of getting the certification for our Upper Assam estates.
We are also in the process of obtaining Fair Trade Certification for our Darjeeling Estates.
Our warehouse in Kolkata is  ISO 22000 certified with separate storing and blending facilities for Organic and inorganic teas. We have been recognized as Star Export House by Government of India.

Our teas have good demand which is proved by our buyers list which includes the key packeters of India and abroad. Our teas fetch higher prices than the district averages across all the key areas like Upper Assam, Darjeeling, Cachar, Dooars/Terai and South India. Our Darjeeling garden Tukvar (Puttabong) was the first to fetch a record price of Rs.10,000/- per kg way back in 1992.

ADVANTAGES OF SCALE

After all the acquisitions this year we estimate to produce more than 260 lac kgs tea in India about 60 lac kgs in Africa and 80 lac kgs sourced from others we estimate to touch 400 lac kgs this financial itself. With such large quantity we have the flexibility and control to supply any quality and  quantity of tea from any region to satisfy our buyers i.e. all the teas under one roof.

DEDICATED TEAM

Employees are our best strength. We have a loyal and dedicated workforce. Our Managing Director is the present Chairman of Tea Research Association and President of Tea Association of India, an organization of all the tea companies of India. One of our Vice-Presidents is the Chairperson of Calcutta Tea Traders Association. This just shows the faith the tea industry at large has in our company.

LOWER COSTS

We have gardens in each of the key tea producing areas in close proximity and we have active inter-exchange of resources between these gardens. Further we have invested large sums of money in last couple of years in our factories and all of them have latest machinery which ensures high efficiency of production. As a result we achieve high economy of scale and our costs per kg of tea are lower compared our peers.

CHEMICALS & FERTILIZERS

Jay Shree Chemicals & Fertilizers has two factories. One factory is located in Khardah, near Kolkata and another in Pataudi, Haryana. The Kolkata unit manufactures Sulphuric Acid and Single Superphosphate and the Pataudi unit manufactures Sulphuric Acid. We are marketing the Single Superphosphate (SSP) under our Brand “Annapurna”. The company has manufactured 76,256 MT of SSP and 39,162 MT of Sulphuric Acid in the FY 2009-10 and in the current year it targets 90,000 MT of SSP and 82,000 MT of Sulphuric Acid.

The Company has kept pace with development of technology in its field and has continuously adopted new technologies in its processes by continuous revamping & modernization of its plants.The process of manufacture of Sulphuric Acid was modified to adopt latest DCDA – Technology which resulted in lowest emission levels. Similarly, both the SSP Plants as well as Granulated Fertilizer Plant were revamped and modified with a view to reduce emission levels and improve productivity. The Company has undertaken effective energy conservation measures by installing a suitable Turbo-Alternator which utilizes the surplus steam available from both the Sulphuric Acid Plants.