ET: Tea, spices, bananas & poplars-these businesses are going to the roots: June 06, 2010

 

 

AUGUST 21, 1920, proved to be a turning point in a young man’s life. He had just wrapped up his studies in London and was back home to take a break with his family. He was cantering through the family-run Makaibari tea estate in Darjeeling on his prize horse, Invitation. Suddenly, a wild boar bolted across his path. The horse was thrown off balance and the man fell. Within minutes he was surrounded by locals who busied themselves in ministrations.

 

   “I was left contemplating. I had been trying to bargain for love and recognition thousands of miles away. And here it was right at a handshaking distance, for free. The die was cast. I stayed back,” reminisces Swaraj Kumar Banerjee, better known as Rajah Banerjee in tea circles.

 

   His affair with Makaibari stretches over 39 years. Banerjee’s family has been in the tea business since 1859. Rajah is one of those rare estate owners who stays on the estate with his family. As a young man, it dawned on him that the dense tea monoculture was neither environmentally nor economically sustainable. Today, his prediction is proving true. Tea production in Darjeeling has declined in the last decade as plantations have closed down.

 

   But Makaibari is a departure. It’s now a proof that sustainable agriculture can succeed commercially and benefit the environment. Gone are the regimented lines of tea bushes. Instead, the tea grows amid fruits, bamboo and herbs and the soil is dark and soft, fed with the organic compost.

 

   “We went for organic growth out of desperation,” says Banerjee. “Across this region, nature was destroyed and trees cut down,” he adds. Banerjee’s pioneering work has been able to convert the estate to permaculture. Today, tea is only grown on a quarter of Makaibari’s 1,000 hectares. More than half remains subtropical forest.

 

   Banerjee’s constant endeavour to protect and upgrade the quality of tea has paid off. In 2003, his teas fetched an astronomical price of Rs 18,000 per kg. Thousands drop by Makaibari every year and many want to stay back to experience the tranquillity. “This prompted us to develop eco-tourism at our estate,” says Mr Banerjee. The 60-year old, whose passion is to ride horses and play polo in Kazakhstan, now desires to pass on the baton to his elder son, Udayan Banerjee, who currently works with Fidelity in Bangalore.

 

Sutanuka Ghosal

 

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“INNOVATION is the key for surviving in the tea industry today,” says Ambootia Tea chairman Sanjay Bansal, who has turned around 15 dying tea estates spread across Darjeeling, Assam and Dooars. Tea runs in Sanjay’s blood. His father, SP Bansal, who hailed from Dehra Dun, chose to take up a job in a tea company in Assam way back in 1948. “I was born in the Ambootia tea estate in 1961. My father had taken over the abandoned Ambootia estate in 1987 and I was asked to go there and turn it around,” recounts Bansal.

 

   Bansal takes pride in having turned around Happy Valley tea estate, considered to be the oldest in Darjeeling. When the group bought the 437-acre Happy Valley estate in March 2007, its tea bushes were old, its machinery obsolete and workers had not been paid regular wages for months. “We then hired new managers, started regular maintenance of the plants and soil and begun a move to organic farming. In addition to a guaranteed minimum daily wage of $1.38, we started giving workers incentives for plucking more teas. And within seven months, the estate turned around,” says Bansal.

 

   In tea circles, he is being termed as a turnaround wizard. In 1991, he took over Avongrove tea estate in Darjeeling, which has been abandoned for 27 years and introduced organic farming. In 1993, he introduced organic farming at Ambootia tea estate and a few years back Ambootia’s Brumes d’Himalaya, a ‘first flush’, or spring-harvest tea, sold at a high-end boutique in Paris for $727 per lb. In 2002, he took over a sick garden in Assam called Jamguri. This was followed by a series of sick tea estate acquisitions in 2004 and 2007. In 2009, he acquired two other sick tea estates in Dooars.

 

   “I believe that production of organic tea is the way ahead,” says Bansal, whose teas are exported to the EU. He loves to listen to Indian classical music, watch cricket and read books while travelling.

   Sutanuka Ghosal

 

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Going bananas worldwide
Ajit DESAI FOUNDER, DESAI FRUITS AND VEGETABLES

 

Ajit Desai is almost worshipped in Jhagadia village in Navsari, south Gujarat. The man, who is known as Banana King, has changed the face of the village through his entrepreneurial skills. In fact, he has put India on the global map of banana producing nations. From almost negligible banana production in 2001, India today grows over 25% of the world’s total crop.

 

   “We will take it to 40% in the next four years,” hopes Desai, 48, founder of Desai Fruits and Vegetables (DFV). Founded in 2001, DFV has become the largest banana producing company in India. Desai also claims that his company was the first to export mangoes to the US after the market opened up three years back and enjoys over 80% market share of Indian mangoes exported to US. DFV works with more than 2,800 farmers across 20 villages in Gujarat and few dozens in Maharashtra through contract-farming arrangement.

 

   Earlier, the farmers in Jhagadia village produced cotton or sugarcane, but have now diverted to banana production. This has also enhanced their steady incomes and raised standard of living. DFV exports mainly to the Middle-East, Japan and US markets. “We have also recently dispatched consignments to the European market,” says Desai. He is looking at expanding the overall production to 2.5 lakh tonne from the current 60,000 tonne per year. He even supplies to global supermarket chains such as Carrefour, Patel Brothers, Pioneer, Al Maya and Spinneys.

 

   The banana exporting firm uses advanced technology for seeding, harvesting, fertilizing, grading, sorting and packaging under the brand name of DFV. Although, Philippines and Latin America lead in the world banana exports churning over 80% of the total, India expects to grow to 3% from the current 1% – thanks to the man who proved his visionary capability by creating a new space for India. Desai started his amazing journey with Rs 1 cr in 2001 to buy cold-storage facilities and basic infrastructure to create an export-oriented unit. He even tried his hand at a dairy cooperative in the early-90s and booked losses. But that didn’t stop him. As luck would have it, in ten years, DFV has crossed Rs 100 cr, and, “we expect to do more than Rs 200 cr in the next five years with continuing growth rate of 100%,” adds Desai. Though he had not completed his higher secondary, Desai now leads a team of professionals from IIMs and IITs. “I was even invited by IIM-A to deliver a lecture,” he recalls.

 

   DFV’s 80% equity holding is owned by Contract Farming India, a company based in Zug, Switzerland, and Desai’s family owns 20%. DFV has big plans to become major banana player in the world with plans of investment of close to Rs 50 cr in the next two years.

   Tapash Talukdar

 

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Business on a bed of roses
Ganpat PATIL DIRECTOR, SHREEVARDHAN BIOTECH

 

EVERY year, lakhs of roses are gifted in Europe and Japan that are grown in Kondigre, a village Maharashtra. The soil less computer controlled green house of Shreevardhan Biotech is spread over 95-acres and exports around 8-9 million roses every year, mainly to Japan and the EU.

 

   Ganpat Patil, son of Mr SR Patil, the founder of Dutta Shirol co-operative sugar factory, quit his education after completing school on the advise of his father and launched a horticultural venture with crops such as grapes and pomegranates which were not conventional in those days.

 

   After 20 years in farming, in 1998, at the age of 42, Mr Patil started experimenting with floriculture on a piece of four acre land. Instead of taking over the reins of the sugar business like political families in western Maharashtra, Mr Patil likes to toil on his farms. This is why one has to run to keep pace with this 62-year old entrepreneur to see his technological wonders on the farm. The entire operation of the farm is based on the latest management principles. There are charts put up on the doors of every greenhouse to rate the team of workers on a scale of 100 for cleanliness, productivity, quality etc. Hi-tech systems imported from Israel control the PH factor and the electrical conductivity of water while pesticides and fertilizer use is controlled by computers.

 

   About 80% of the roses on the farm are grown in a coco-pit brought from Kerala. Of the 95-acres, roses are grown on 40 acres while gerbera and carnations are grown on 18 acres and 4 acres, respectively. Besides flowers, Patil grows coloured capsicum on 12 acres with a record annual production of about 70 tonnes per acre while other exotic vegetables such as Chinese cabbage, iceberg lettuce, red cabbage, broccoli, celery and parsley are grown on four acres. They are sold to the hotel chains in cities such as Mumbai, Delhi and Pune.

 

   “We have invested about Rs 65 cr in the farm, of which Rs 32 cr is a loan from the Bank of India,” said Patil who is director of Shreevardhan Biotech. He added that the only difficulty he faced was related to marketing of the produce. “About 80% of our roses go to some supermarkets in Japan through middle men,” said Ramesh Patil, CEO of Shreevardhan Biotech and sonin-law of Ganpat Patil. All the trade and transactions are carried on online from the farm office. Shreevardhan started rose exports from 2004. “We exported 84 lakh roses in 2007-08 and 75 lakh roses in 2008-09. Our target was to export one crore roses in 2009-10 but the production has been affected due to adverse climatic conditions,” said Ramesh. “Our annual yield of roses per acre is 10 lakh stems,” he added. No wonder that a Dutch company which supplied to Shreevardhan Biotech, also entrusted it with testing of one of its new varieties. And as reward named the rose variety as Shreevardhan, which is now sold in many countries around the world.

   Jayashree Bhosale

 

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Regional edge bears fruit
Mayur VORA DIRECTOR, MAPROS FOODS

 

FOR 52-year-old Mayur Vora, the journey has been a long one. The director of Mahabaleshwar Products (Mapros) has nurtured and grown his company from a very local brand in Mahabaleshwar—recognised only by tourists —to a regionally available brand. The next step for the fruit processor from the western hill station is to take his Rs 100-cr company national. Mr Vora has begun by setting up a unit in Kangra, Himachal Pradesh. He expects his son Nikunj to go for a wider product portfolio and take the brand global. “We grew from being a cottage industry to become a large unit, from a local brand to a regional and national brand. My son will take it global, in another 10 years,” he said.

 

   No surprise that Mr Vora, an IIM-Ahmedabad alumnus who worked at Voltas for a couple of years before joining his uncle’s unit, has some out-of-the-box views. “If going into agriculture were profitable, India would be a very, very rich country. This year, turmeric and sugarcane are examples of good money being made by growers but consistently making money, year after year, is not possible in agriculture,” Mr Vora said. The problems according to him are mainly land and labour costs.

 

   The Mapros Foods plant at Panchgani has the capacity to produce 50,000 tonne fruit products annually. Mr Vora believes that the country’s default rate of growth for processed food (including fruit) products is 30% and he is only talking about the organised sector.

 

   “In India, the organised food processing sector refers actually to foreign food processing. Jams and ketchups are in the organised sector but a tomato chutney goes into the unorganised sector although it is much bigger. The processing sector is growing very fast with growth coming from the metros and mini metros in the north and the west,” Mr Vora said. He said exports get a boost only because players are unable to distribute within the country since India is among the biggest food markets in the world.

 

   “We need a more efficient distribution system in the country since the farmers cannot sell directly to the customer and exports happen only because food cannot be distributed in the country. Agricultural produce marketing committees do have a role to play but it should not be mandatory for a farmer to sell through them,” he added. Tracing the growth of his own business, Mr Vora said the changes ushered in during 1991 saw the sector grow.

 

   His global plans are to take traditional Indian foods, specially non-fruit based products, with a global twist, to international markets. The Indian diaspora is the first obvious market but it will not be restricted to them. “Universal audiences, that’s who we are targeting,” Mr Vora said.

   Gouri Athale

 

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Oranges & poplars for a fortune
Khushwant SINGH FARMER, HOSHIARPUR

 

BEFORE carving a name for himself in the burgeoning market of Indian writers, 37-year old Khushwant Singh (no relation to the older and wiser Mr Singh) was busy tending to kinnows (a citrus fruit) on his farms in Chhauni Kalan village of Hoshiarpur district in Punjab.

 

   The northern-eastern region of the state, known as the Kandi belt, is the natural habitat to many citrus fruits attracting not just the likes of PepsiCo but also Mr Singh who quit his plum job in a Delhi-based advertising agency in 1996 to join his father in growing kinnows.

 

   “My father, Bhagwant Singh, is a very progressive, technology-savvy farmer. He was a pioneer in introducing micro-management in irrigation way back in 1992-93. Today Hoshiarpur is a complete citrus community,” says Mr Singh.

 

   As he went about pruning trees and keeping the pests away, his education in Chandigarh led him to begin writing about agriculture and form views on how citrus cultivation could be increased in Punjab.

 

   Nearly a decade and half since, Mr Singh and his family manage around 80-90 acres of kinnow orchards while he oversees the next evolution in progressive farming for the family—poplar.

 

   The trees, used by the wood industry based in Yamunangar district of Haryana, have been an alternate crop for the Singh family since mid-90s. He realised that poplar not only suited the area but also ensured better returns and hence shifted his focus to growing them on a large scale, on his farm and on land leased from NRIs. “Today I have around 16,000 trees on 80 acres. Compared to the time spent and revenues earned from kinnows, poplar is a more productive option,” he says.

 

   As Mr Singh explains, a quintal of poplar now fetches an average of Rs 700. In a single harvest of around 4,000-5,000 trees, the produce is nearly Rs 80 lakh in revenues.

 

   Like kinnows, poplars do not need much water and a couple of rain showers can suffice for irrigation during November to March, when they shed leaves. What remains crucial is management of labour, irrigation, pruning, fertilizers, eradicating of disease and pests and shooing away stray cattle from the farmland.

   Gulveen Aulakh

 

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Spicing up curry market
M EMEERAN CHAIRMAN, EASTERN GROUP

 

IF YOU tell him that running a complex food processing empire by sourcing spices and other raw materials from all over the world is a tough task, M E Meeran, chairman of Eastern Group, would disagree. This is because Meeran, who runs a Rs 300-cr curry powder company, says that for him running his business is like reading a good work of fiction. “Building up my business and running it has been a thoroughly enjoyable experience for me,” he says.

 

   For a man who ventured into manufacturing only in 1983, Meeran has taken huge strides in his business life. Eastern Group is today a Rs 400-cr business house with diverse interests. The flagship Eastern Condiments, has won the best exporter award from the government for branded curry powder for 11 years in a row. The Eastern brand of curry powder is available all over the country and in the leading markets abroad, including the US and Europe.

 

   Meeran hails from the Idukki district in central Kerala, a region famous as the largest producer of spices such as pepper and cardamom. He remembers that his family had a largely agrarian background. Despite that, his natural flair for business prompted him to take the first sure step into the big world of business as a trader. “We were the distributors for major companies such as Nestle, Britannia, Nippo Battery, Kerala Soaps and Oil etc,” says Meeran. Later he started marketing coffee powder and curry powder under the ‘Eastern’ brand name.

 

   He attributes his success to his knowledge of the best sources of spices and his concern for quality. In the mid-1990s, after his son Navas Meeran joined the business they have clearly demarcated responsibilities and functional areas. “In 2000 we took the all important decision to professionalise the management of the company,” explains Meeran.

 

   To give a new impetus to growth, the company has gone for VC funding to the tune of $10 m in 2006. It has three manufacturing units and is adding three more to take the capacity to 300 tones per day. It is sourcing spices not only from within India but even from other countries. Navas Meeran, who is in charge of strategy planning, says his vision for Eastern Group is to achieve a turnover of Rs 1,000 cr.

   S Sanandakumar

 

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