Harrisons Malayalam plans to develop plantations in Ethiopia

Harrisons Malayalam Ltd is looking at Ethiopia to acquire land on lease for developing plantations, the company's Managing Director, Mr Pankaj Kapoor, said on Tuesday.

To a question on its plans to engage in plantation business in Africa and Ethiopia's offer to lease land for 99 years at $1 an acre, he said: “We are in touch (with Ethiopia). We are looking at it closely and have plans for large plantations,” he told reporters on the sidelines of the 117th annual conference of the United Planters Association of Southern India (Upasi) here.

Looking across fences

Short of huge tracts of land in the country and curbed by restrictions on acquiring land, corporates are looking to acquire farms abroad to source raw materials or as part of their expansion plans.

Karuturi Global Ltd, Emami, McLeod Russel and Ruchi Group have acquired land abroad, mainly in Africa. Besides, Godrej and K.S. Oils Ltd have acquired oil palm plantations in Indonesia and Malaysia.

Mr Kapoor said with rubber prices ruling firm, Harrisons Malayalam would do well this fiscal. “We expect prices to rule firm. Even if they fall, they will not fall lower than Rs 5 a kg and supply shortfall will certainly keep rubber prices at a higher level,” he said.

The company has been engaged in replanting its rubber plantations. As a result, its rubber production has been declining. This year, our rubber production could be 5,200 tonnes.

“But our replantation programme will begin yielding results from 2013 and our production would be higher than 10,000 tonnes from then. We expect our plantation production costs to be lower, while productivity is likely to increase,” he said.

The company trades close to 12,000 tonnes of rubber a year with some 7,000 tonnes being bought from traders.

On tea business, he said prices have begun picking up only in the last two weeks. “Tea prices have generally been lower this year. But in the last two auctions, prices have increased Rs 10 a kg. Prices could reach around last year's level by the year-end and beyond that, a firm trend is expected,” Mr Kapoor said.

Harrisons produced 12.7 million kg (mkg) of tea last year, while it bought 5-6 mkg from the auctions. This year, its production is expected to increase to 13.5 mkg, while buying from auctions would remain at the same level.

On spices

Its spices division is also expected to do well with pepper and cardamom prices ruling firm. “We expect our profits to remain around last year's level or even improve,” he said.

The company continues its programme of replantation in rubber and tea estates. In rubber, 700 acres had been replanted, while tea planting has been done on 170 acres.

On the Bombay Stock Exchange, Harrisons Malayalam was down 0.77 per cent at Rs 90.50 on Tuesday.

Source: The Hindu Business Line