Dhunseri Tea & Industries Ltd, promoted by Chandra Kumar Dhanuka, has rejigged its tea operations in Assam.

The company has acquired a large estate in Dibrugarh, with 1.3-million-kg capacity, from Warren Tea while selling off three smaller gardens with a combined capacity of 8 lakh kg.

Following the transaction, Dhunseri will be in the market with a 15 million kg tea portfolio, split between its own production of about 8 million kg and bought leaf of 7 million kg.

The company also has a 9 million kg tea production portfolio in Malawi, Africa, and a sizable macadamia nut cultivation there.

Explaining the rationale of the Assam portfolio rejig, Dhanuka said the aim was to have large gardens instead of smaller ones to reduce the cost of operations.

“They (larger gardens) are easier to manage, cost of operation is lower due to economy of scale,” Dhanuka said, adding Dhunseri does not have any small gardens any more.

Dhunseri paid Rs 27 crore for Balijan North Tea Estate, which predominantly makes CTC tea along with some amount of orthodox tea. It had a turnover of Rs 21.36 crore in 2020-21.

Simultaneously, it concluded the sale of Santi Tea estate for Rs 6.01 crore. It had a production capacity of 2.24 lakh kg. It had sold two other gardens during the course of the year.

The rejig comes at a time prices have come off amidst higher costs linked to wage hikes. Rating agency Icra has projected 2022 to be a challenging year for the north Indian gardens.

“I am cautiously optimistic about the tea sector. There has to be a floor price for tea.

I hope the governments will act on this idea. Else the industry will die,” Dhanuka argued.