McLeod Russel to buy 90% stake in Rwanda tea estate
The estate, till now controlled by UK-based LAB International, produces 2.4 million kg of tea, says McLeod Russel director Kamal Baheti
Kolkata: McLeod Russel India Ltd will buy a 90% stake in a tea estate in Rwanda for $19.5 million (nearly Rs.120 crore), the world’s biggest producer of tea said in a filing to the stock exchanges on Tuesday.
“The output can be raised to 3-3.5 million kg over the next few years, which means the price paid will eventually translate to around $6 per kg,” he said.
McLeod Russel is already invested in Rwanda. In February 2011, it took over Gisovu Tea Co. Ltd, which has one of the best plantations in Africa situated in Rwanda’s western province. Average tea prices in Africa are about 20% lower than last year, McLeod Russel said in a statement.
The company also announced on Tuesday that its stand-alone net profit in the quarter till September dropped 10% from last year to Rs.221.5 crore despite gains in realization, largely due to an escalation in production cost. The company expects production cost in the current financial year to jump 5% over 2013-14.
McLeod Russel’s shares fell 1.35% to Rs.248.60 on BSE, while the benchmark Sensex gained 0.55% to close at 26,575.65 points.
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