Bombay Burmah

Bombay Burmah Trading Corporation, Limited (BBTCL) is a 150 year old company, belonging  to the Wadia group. As the name suggests, the company in its early years, dealt with trading of timber from Burma (now Myanmar). It turned to tea plantations in 1913. Today it has five estates and four factories having 1,863 hectares for tea plantation. In coffee, it has 8 estates, totaling 927 hectares of planted coffee and produces about 1000 Tonnes of clean coffee per year, on an average, out of which 50 Tonnes is organically cultivated coffee, which is in highest demand for exports. It has three more units – auto electrical components, investments and healthcare.

The company ended Q1FY16 with a 8% (YoY) rise in net revenue at Rs.66 crore but after interest outgo rose 60%, it was pushed into the red with a net loss of Rs.86 crore v/s loss of Rs.88 crore. Plantations contribute 50% to the total income and it showed an EBIT increase of 12.5%.

The stock was up in the green yesterday on hopes that the Govt might allow FDI in coffee plantations. There are murmurs in the corridors of Delhi that this proposal is being considered by the commerce and industry ministry. 100% FDI is currently allowed in tea plantations but not in anything other plantations.

The news doing the rounds is that foreigners could be allowed to invest in these coffee plantations, get labourers to pluck coffee beans, process raw material and thus help in boosting India’s coffee exports. Currently, for 2014-15 (Oct to Sept), coffee output is targeted at 3,31,000 tonne v/s 3,04,500 tonne last year. And in terms of value, exports earned US$803 million v/s US$799 million in previous year.