Lykis gearing up to sell Cheers Tea across India | SupportBiz

Managing Growth

Lykis gearing up to sell Cheers Tea across India

 
A background in financial services did not stop Vijay Kedia, Chairman, Lykis Group, from acquiring a tea company and estates in North East India. Speaking to SupportBiz, Kedia shared his entrepreneurial experience in reviving and re-establishing the tea business. Edited excerpts:

Please share your experiences in establishing the new Lykis Group?

I am an investor and a fifth generation entrepreneur. Almost a year back, I acquired two tea estates in Assam and Tripura along with a tea brand. The company was previously known as Green Line Tea and Exports. After completing the acquisition we changed the name to the Lykis Group. It is a BSE-listed company.  The name of our branded tea is ‘Cheers Tea.’

How is the company performing in market?

This is our first year of operation after the acquisition; we are on the right track now. We are expecting a turnover of Rs.15 crore by the end of the 2012-13 financial year. According to our estimates and projections we will touch a turnover of around Rs. 75 crore by the end of the 2013-14 fiscal. The market is extremely lucrative and we are planning expanding on a massive scale.

What are the investments you have already made?

I have already invested around five crore rupees in this business. The major areas of this investment are machinery and processing infrastructure. In addition to this, we plan to invest Rs. 2-3 crore towards the upgradation of plantation capabilities and technology. We are targeting an addition of around 50 hectares of new land for plantation.

What are the key priorities you have set for this business?

At the moment we are focusing on investing on enhancing the plantation capacities; processing capacities; bringing in new technologies in terms of enabling the processing plant to be more efficient and productive. In terms of market outreach, we will be strengthening our brand presence in four states, namely, Gujrat, Rajasthan, Assam and Punjab. We will foray into newer markets also. We are building a sales network in new geographies. 

Please share your views about the potential of the tea business?

The tea business is always considered to be a lucrative industry. The trend is that consumers are getting influenced by brands. This is impacting their buying behaviour at every level. This is a strong trend in metros and gradually this is becoming visible in smaller towns as well. Globally, a market estimate says that the production of tea is static and that consumption is increasing three percent year-on-year. Profit margins are not so high in this trade and owning and managing a tea estate is considered to be an expensive affair. 

As per your observations, what are the key challenges that this industry is facing?

The biggest challenge that this industry is facing is the shortage of labour. We are also facing this challenge in our business. However, we are bringing new technologies in order to deal with this challenge. For example, instead of manual plucking of tea leafs we will introduce automated plucking which will save time and resources also. Apart from this, the role of technology is going to be very well optimised in the packaging and processing of our products. 

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