Mcleod Russel sees new tea deal adding $8m to revenues

Mcleod Russel India's unit signed a pact with Rwanda Development Board and Rwanda Tea Authority to buy 60% in Gisovu Tea Company.

The total capacity of Gisovu Tea garden in Rwanda is around 1.7 million kg per annum. Speaking to CNBC-TV18, Kamal Baheti, CFO of McLeod Russel said, Gisovu Tea garden will contribute around USD 7-8 million to the topline, and around USD 3 million to the bottomline at EBITDA level. Below is the verbatim transcript of Baheti's interview with Latha Venkatesh and Gautam Broker of CNBC-TV18. Also watch the accompanying video.  Q: You have made an acquisition at Rwanda. How much of this adds to your capacity? What is the total capacity you are aiming at because you have been very active on the inorganic front for the past few months? A: The total capacity of Gisovu Tea garden in Rwanda is around 1.7 million kg per annum. This along with others in all the countries put together will be around 102 million kg. The acquisition had been approved by the government on February 11.

Yesterday, we signed a memorandom of understanding (MoU) to take over the management and other formalities will follow soon. We will form a new company named Gisovu Tea Company Limited where these assets will be transferred. Q: What will this mean to revenues in the full year once this acquisition comes in? What does FY12 do to you? A: Looking at it from McLeod Russel