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B & A has launched the Gatoonga brand and plans pan-India expansion with Rs 50 crore investment
Guwahati: Black tea specialists Barooahs & Associates Group (B&A) has announced the acquisition of the Moheema tea estate in Assam, which kicks off its pan-India expansion plan in the premium CTC tea market.
B&A is a Rs 300 crore company based out of Assam—indeed, the first one from Assam to be listed on the stock exchanges—and a leading black tea (CTC) producer, the category of tea consumed by virtually every Indian. It has announced the acquisition of the Moheema Tea Estate in the Golaghat district of Assam to bolster its presence in the Indian tea market.
This is the first ever acquisition by the 109-year-old company in over six decades, managing director Somnath Chatterjee has said. The new acquisition is in sync with the group's CAPEX plan for a pan-India growth strategy, including a foray into the retail tea market with its leading Gatoonga brand of black tea, B&A announced recently.
So far, B&A has 11 tea estates in Assam that include Gatoonga, Sangsua, Kuhum, Mokrung, Govindapur, Borting, Moheema (newly acquired), Samaguri, New Samaguri, Salkathoni, and Barasali. The latest acquisition is in and around different locations in upper Assam, like Jorhat, Sibsagar, and Golaghat, the company has said.
“With the investment of Rs 50 crore, the group has further plans to acquire more tea estates and factories,” deputy managing director Dhruba Jyoti Dowerah told Business North East.
For the first time in 60 years, B&A Group has set up a roadmap for a pan-India growth strategy with new acquisitions and diversification into the branded retail tea market. Over the next seven years, the company will make an investment of Rs 50 crore as part of its growth and expansion strategy, managing director Somnath Chatterjee announced recently.
Retail Market Foray
The company has already been selling premium quality Assam tea to other companies in India for decades. That is the core strength on which B&A hopes to launch itself in the retail market, in Assam to begin with.
On March 31, 2024, on the 98th birth anniversary of founder and Padma Shri awardee Hemendra Prasad Barooah, B&A made its retail foray with the launch of the Gatoonga brand of black tea. With this, it will tap the premium CTC tea market in its home state, Assam.
B&A has its registered office in Jorhat and corporate office in Kolkata.
“The retail market foray is based on a phased demand-driven growth strategy. High-quality black tea, sold through other companies and auctions, has been popular in the market for decades, and now garden fresh non-blended tea will be available to retail customers in attractive branded packages,” said Dowerah.
Dowerah emphasized the exceptional quality and market reputation of Gatoonga Tea Estate, ranking first in the All India Batting Order for price and fetching impressive auction prices, including Rs 706 per kilo in 2023.
Gatoonga Tea Estate
Packaging and Production
After the new acquisition, B&A is introducing eco-friendly packets called papersacks, which include aluminum foil inside the packets to keep the tea fresh for a longer span. The company has a long experience in packaging, with a company under its wings specialising in packaging.
"Initially, we are planning to go with a packet of 250 grams, which will cost Rs 150. Gradually, we will introduce 1/2 kg and 1 kg packets of paper sack tea," he added.
He said the company wants the premium teas to reach Assam markets and make the resident tea B&A’s best quality tea produced and manufactured by them. Till now, their products were not accessible to the markets in Assam.
In 2023, the company produced 5.5 million kg of black tea, and with the addition of Moheema Tea Estate, tea production is projected to reach 6 million metric tonnes annually. Out of its total annual production of 5.5 million kg of super quality tea, it sold over 3 million kg through auctions during the last fiscal year (FY 2022-23), while selling directly 2.5 million kg, said Chatterjee.
Legacy
The first week of April this year has been good for the company, as its stock shot up 19% in intra-day movement on April 2. The company, however, has traversed a long way on the basis of a firm footing.
B & A Limited descended from the Barasali Tea Company Limited, which was founded in 1915. The company grew under the stewardship of Hemendra Prasad Barooah, an entrepreneur, philanthropist, and art collector. Barooah was a pioneer in many ways, having done a master’s in business administration from the Harvard Business School back in 1949, being the first one from the north-eastern region.
In addition to its business endeavors, B&A has undertaken significant CSR initiatives in Jorhat and nearby areas, including the establishment of dialysis units, the donation of an air-conditioned hearse van, and setting up computer labs in schools.
