India's largest tea producer, McLeod Russel India Ltd, which has grown its production capacity 150% with three acquisitions in the past two years said it wants to acquire more tea gardens in Assam and Africa. "In Assam we will not be looking for a single garden but a collective holding with production capacity upwards of 5 million kg," said Aditya Khaitan, managing director of McLeod Russel. Khaitan added that the company was also looking to acquire capacity of 15-16 million kg in Africa at an estimated cost of $20 million (Rs80 crore). In June 2005, McLeod Russel acquired Williamson Tea (Assam) Ltd from the UK-based Magor group; in December of the same year, it bought Doom Dooma Tea Company Ltd from Hindustan Lever Ltd; and it is now waiting to complete the acquisition of Moran Tea Company (India) Ltd from Moran Holdings Plc. The three acquisitions have taken the company's capacity to 75 million kg (from 30 million kg) and it is now looking to touch the 100 million kg mark. Khaitan said that the company would continue to focus on building up its tea capacity at a time when other plantation firms are "into alternate cropping or engaging in (tea) tourism" because it believed that a shortage of land would result in pressure on "tea production in the future." Khaitan said that the company had not earmarked any money for its acquisitions and that it was confident of being able to leverage its balance sheet to raise debt to fund these. The company ended 2006-07 with a consolidated net profit of Rs79.57 crore (as against the previous year's Rs27.95 crore) on revenue of Rs606.61 crore (Rs 511.52 crore a year earlier). During this period it reduced its consolidated debt by Rs163 crore to Rs403 crore and its debt-equity ratio from 1.31 to 0.70. Shares of the company closed 0.55% down at Rs64.85 on the Bombay Stock Exchange.
