Guwahati: The tea industry is in crisis, but some estates are still doing a great job and getting top prices in the auctions. The Gatoonga Tea Garden of Assam has now reported the best averages in CTC tea in auctions for the third time in a row, showing that good prices are still achievable despite tough situations. Gatoonga estate fetched an average price of Rs 461.22 and became the first garden to fetch more than Rs 450 in CTC auctions in North India.
Gatoonga estate member of B&A Limited, got an average of Rs 401.15 in 2022-23 auctions when it became the first garden to fetch more than Rs 400 average. In 2021-22, it topped the auctions with an average of Rs 393.79.
“It’s a proud moment for us and we will continue to improve further,” Dhruba Jyoti Dowerah, Deputy Managing Director, B&A Limited told EastMojo.
In fact, in the top ten positions in CTC tea, two of their member gardens Mokrung and Salkathoni are in third and seventh positions which speaks of the stiff competition from within the group. The company out of its total annual production of 5.5 million jgs sold over 3 million kgs through auctions and the rest directly.
B&A Limited is the flagship Company of B&A Group – a listed company on the Bombay Stock Exchange (BSE) was founded by the Late Hemendra Prasad Barooah in 1950, and was originally incorporated as Barasali Tea Company in 1915 in Assam.
The 2022-23 annual report of the company says: “Like every year the company concentrated on producing a quality crop and in no circumstances let the quality of the produce deteriorate. The company also concentrated on the quality of bought leaf so that making tea from bought leaf created a mark of making tea from its leaf. This was reflected in the prices that we fetched in the auctions”.
“The tea industry particularly in Assam is facing multiple challenges which need a long-term strategy involving all its stakeholders to address these challenges. While soaring production costs without matching price realizations amidst perpetual increase in input costs has become a retarding factor for growth, climate change issues such as declining yields, pest infestation and increased dependence on irrigation are additional worries,” the annual report added.
It further says the cost to the company particularly in the area of composite value of wages and obligation under social responsibility of a man-day is tending to reach a point which is an economic impossibility for the industry to remain viable.
The company is making a profit, Duwarah said.
The company this year acquired Moheema Tea Estate in Golaghat district. Company officials say the new acquisition is in sync with the group’s Rs. 50 crore capex plan for a Pan-India growth strategy, including a foray into the retail market with its leading Gatoonga brand black tea.
Speaking about the acquisition and venturing into the retail segment, Mr Somnath Chatterjee, MD, B&A Ltd, said: “For the first time in sixty years, with new acquisition and diversification into the branded retail tea market, the Group has set up a roadmap for a Pan-India growth strategy. We have been selling premium quality Assam tea to other companies in India for decades.
“Having acquired deep experience, B&A Ltd is now set to harness its intrinsic strengths and experience to diversify further in terms of new acquisitions and market expansion. The group has plans to invest around Rs 50 crore in the next seven years as part of its growth and expansion strategy,” Chatterjee said.
Another company official said the plan includes expansion of the B & A packaging unit at Balasore in Odisha, looking for new garden acquisitions and going retail.
On the question of going retail for the first time, Dowerah said: “We want to reach out to the consumers as they have been wanting our tea. We will first tap the Assam market and gradually expand it across India, based on a phased demand-driven growth strategy. We are coming out with a 250 gms packet priced at Rs 150. Our high-quality black tea, sold through other companies and auctions, has been popular in the market for decades and now garden fresh non-blended tea would be available to the retail customers in attractive branded packages.”
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