Tea replantation to help raise HML productivity: MD
Harrisons Malayalam India’s largest tea producer, recently quit the retail tea business to focus on tea and rubber replantation.
By PK Krishnakumar and S Sanandakumar, ET Bureau | Updated:
Harrisons Malayalam ( HML), south India’s biggest tea producer and India’s largest tea producer, recently quit the retail tea business to focus on tea and rubber replantation to raise productivity.
In an interview, Pankaj Kapoor, managing director of HML, a part of RPG Enterprises, told ET about the company’s prospects.
How has the south Indian tea fared this year?
The south Indian tea drew wide appreciation in the recent buyer-seller meet in Abu Dhabi. There have been enquiries from Pakistan, Russia, Kazakhstan, Egypt and Iran. However, the unrest in the Gulf region hit exports in the first quarter.
Purchases by Egypt, Iraq, Iran and Tunisia were down. Iraq is not buying while exporters are reluctant to send consignments to Iran because of payment problems. We expect buying from Egypt to pick up later. Exports may look up once the Russians start buying from June.
What is the outlook on the price front?
Tea prices now are slightly better than last year’s and averaging around Rs 80 per kg in south India.
But what is worrying the producers is the rising cost of production, particularly the wages. After the recent DA adjustment, the variable cost now stands in the range of Rs 70-72 per kg. This means that unless you get a price of around Rs 85, tea plantations in south India cannot survive.
Awage settlement is due in September and we hope the wages will be linked to productivity. There is less worry about rubber as prices should remain in the range of Rs 220 per kg and 250 per kg.
In which way did the high rubber prices and low tea prices reflect on HML’s performance last year?
Tea lost money last year. Average tea prices moved down by Rs 15 to around Rs 70 per kg. Rubber protected us. We expect a 10% growth in our turnover. In the previous year, HML did a business of Rs 335 crore.
You had launched replanting a couple of years back. What is the progress?
Replanting is on our tea and rubber estates. In tea, it is progressing at the rate of 200 hectares every year. We have completed 400 hectares of the 6000 hectares we own.
It involves an investment of Rs 10 crore each year, which is going to be a permanent investment for the next 20 years. But the exercise will increase our productivity to 5,000 kg per hectare in the long run.
In the case of rubber, replanting is going at the rate of 500 hectares per year.
In an interview, Pankaj Kapoor, managing director of HML, a part of RPG Enterprises, told ET about the company’s prospects.
How has the south Indian tea fared this year?
The south Indian tea drew wide appreciation in the recent buyer-seller meet in Abu Dhabi. There have been enquiries from Pakistan, Russia, Kazakhstan, Egypt and Iran. However, the unrest in the Gulf region hit exports in the first quarter.
Purchases by Egypt, Iraq, Iran and Tunisia were down. Iraq is not buying while exporters are reluctant to send consignments to Iran because of payment problems. We expect buying from Egypt to pick up later. Exports may look up once the Russians start buying from June.
What is the outlook on the price front?
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Tea prices now are slightly better than last year’s and averaging around Rs 80 per kg in south India.
But what is worrying the producers is the rising cost of production, particularly the wages. After the recent DA adjustment, the variable cost now stands in the range of Rs 70-72 per kg. This means that unless you get a price of around Rs 85, tea plantations in south India cannot survive.
Awage settlement is due in September and we hope the wages will be linked to productivity. There is less worry about rubber as prices should remain in the range of Rs 220 per kg and 250 per kg.
In which way did the high rubber prices and low tea prices reflect on HML’s performance last year?
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Tea lost money last year. Average tea prices moved down by Rs 15 to around Rs 70 per kg. Rubber protected us. We expect a 10% growth in our turnover. In the previous year, HML did a business of Rs 335 crore.
You had launched replanting a couple of years back. What is the progress?
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Replanting is on our tea and rubber estates. In tea, it is progressing at the rate of 200 hectares every year. We have completed 400 hectares of the 6000 hectares we own.
It involves an investment of Rs 10 crore each year, which is going to be a permanent investment for the next 20 years. But the exercise will increase our productivity to 5,000 kg per hectare in the long run.
In the case of rubber, replanting is going at the rate of 500 hectares per year.
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