The West Bengal and the Assam governments’ initiatives for boosting income of tea
companies by allowing them to use a larger part of idle land in their estates for tourism and other purposes may come a cropper because of a lack of funds.
The West Bengal government recently allowed tea
garden owners to use up to 15 per cent (maximum of 150 acres) of estates, but non-plantation area, for activities like tourism, growing non-tea
crops and others; the earlier cap was 5 per cent. Assam is also expected to come up with a similar announcement soon.
However, the West Bengal government’s move has found few takers and only a handful of companies, which have already set up tourism centres in their estates, are keen on further investment.
Camellia-owned Goodricke had already spent over Rs 91 crore towards buying estates from McLeod Russel last year; it is currently busy with its tea café chain expansion. After opening its tea joint, Tea Pot, in Mumbai and Kolkata this year, it is working to open another at its Thurbo tea estate in Darjeeling by the end of December.
“There is a severe fund crunch and we have already invested in expanding our estates; now Tea Pot is also a focus area. We would like to be cautious and may look into tea tourism after three-three years,” said Atul Asthana, managing director and CEO, Goodricke Group.
Banks, on the other hand, are looking to extend lines of credit despite recent rating downgrades of major listed tea companies.
“Any initiative to create infrastructure in the tea sector will give a boost to the industry. We have asked all our vertical and regional heads to consider proposals under this dispensation,” said Ashok Kumar Pradhan, managing director and CEO of United Bank of India. However, tea companies are reluctant. “Even if companies take loans from banks, they are required to partially fund the project. With tea prices not growing, only a few are in a position to invest. We are not investing in diversification into other areas,” said Vivek Goenka, executive director at Warren Tea.