May 24: Warren Tea Ltd, India’s oldest tea producer who owns seven prized tea estates in Assam, is gearing up to expand its hospitality business in the upcoming three years with substantial capital expenditure. The particular time of expansion has not been disclosed, but it will happen when the plantation owners are facing with rising costs and contracting margins.
The tea producers, who hold a stake of 46.92% in Maple Hotels and Resorts Ltd, are planning to spend at least Rs 60 crore to this effect. Vivek Goenka, president of the company, has been quoted as saying by a news report that a hotel will be built in Jodhpur and the one operating in Bikaner will be expanded.
Maple Hotels have two of its ventures in Jaipur and the company has shown interest in buying a new property of 90 rooms in the same area. The company is also planning to acquire stressed assets under insolvency resolution. Currently what the company has in mind for acquisition are properties with over 100 rooms through bankruptcy court.
The company is planning to build a 60 room property in the 1,500 sq. mt. plot they own in Jodhpur. Their 12 acre plot in Bikaner operates a 48 room property. Maple Hotels intends to add 30 upscale tents at their property.
Most of their expansions will be taking place in Rajasthan where they have three hotels operating. When asked about the funding he revealed that cash from the tea production will not be used in the Maple Hotels and the company’s plan is to keep both the business separate. Presently, the hotel business makes an annual revenue of Rs 20 crore which will be used only be spent for the hotel business.
The company has been selling software solutions for enterprise resource planning (ERP) and facial recognition. According to Goenka, ERP solution has been implemented in around 50 tea estates and a large majority of jute mills in operation. The company also started to sell facial recognition software in the beginning of this year and they have installed the software in 15 tea gardens.
Apart from India, the software service company owned by Goenka family sells their products in Bangladesh and Nepal. Warren Tea who aims at inorganic growth has shown interest in acquiring the beleaguered estates of Assam Co. India Ltd.