BackJay Shree Tea to sell sugar and fertilizer businesses
Firm looks to separate tea from its other business segments which are significantly weaker in terms of profitability
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Kolkata: The board of Jay Shree Tea and Industries Ltd, a B.K. Birla group company, on Tuesday approved a proposal to carve out its sugar and farm input businesses with the aim of eventually selling them.
The firm’s principal business is tea—it produced 21.5 million kg in fiscal 2015 and clocked ₹ 445.16 crore in revenue from plantations. It is looking to separate tea from its other business segments, which are significantly weaker in terms of profitability.
The firm has decided to dispose of its sugar and fertilizer businesses, managing director D.P. Maheshwari said after a board meeting.
Though the firm’s sugar mill in Bihar is one of the best in the state, it is wallowing in losses because it is unable to recover its production cost. The unit generated ₹ 151.6 crore in revenue in fiscal 2015. Though operations are currently suspended, Jay Shree Tea’s sugar business suffered a loss of around ₹ 17 crore in the June quarter on its inventory, according to Maheshwari.
Finding a buyer for the unit may not be easy as all leading sugar producers are struggling to stay afloat, Maheshwari said.
The farm input business, which generated ₹ 61 crore in revenue in fiscal 2015, is “too small", so the company wants to divest it, Maheshwari said, adding that in the current year, it is expected that the fertilizer business should not make losses.
Jay Shree Tea’s shares fell 5.4% to ₹ 75.30 each on BSE in a weak market in which the Sensex lost 0.4%.
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