Jay Shree Tea to acquire sugar co for Rs 113 cr

KOLKATA: Basant Kumar Birla is getting into sugar. Group company Jay Shree Tea & Industries is poised to snap up an unlisted sugar maker, Motilal Padampat Chini Industries, for Rs 112.50 crore. The deal is being funded through a mix of internal accruals and debt. M P Chini Industries is an unlisted Bihar-based sugar maker with a crushing capacity of 4,600 tonnes per day at its Majhaulia unit. The company also has a 6 mw cogen plant for captive use and has some 470 people on its payroll.

When contacted, Mr DP Maheshwari, managing director of Jay Shree Tea & Industries said, “We decided to acquire 100% shares of a sugar producing company as the sugar industry is expected to do well over the next 4-5 years. In fact, we feel the commodity segment will do extremely well in the next 5 years.”

“The process of acquisition is likely to culminate in six weeks.” the company said. The proposal as well as the agreement between the buyer-and-the-seller will be tabled at the board meeting scheduled on March 30, 2010.

On the group’s future growth strategy, Mr Maheshwari said, “We may look at more acquisitions in the sugar segment. But before we start scouting around for another acquisition, we intend to streamline the new buyout.” Meanwhile, Jay Shree Tea is pursuing its plans to acquire tea gardens in India and abroad as part of the company’s corporate strategy to enhance its tea producing capacity to 24 million kg by 2010-11 from its present level of 21 million kg.

At present, it has 20 tea estates within its fold, including 10 in Assam, eight in West Bengal (six in Darjeeling and two in Dooars) and two in Tamil Nadu.