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 Q2FY16 with a flat topline at Rs.60 crore but after interest outgo of Rs.8 crore and operating expenses of Rs.66 crore, it was once again pushed into the red with a net loss of Rs.6 crore v/s loss of Rs.82 lakh in previous Q2. Plantations contribute 50% to the total income and it is the only segment which was in the red. Moreover, the company has stated that its expenses of Rs.7 crore incurred during H1FY16 at the coffee estates has been carried forward and this is to be accounted for in current season’s coffee crop from November 2015. This means, we could see one more bigger loss in Q3.

The much awaited news of FDI finally came in this month – the Govt allowed 100% foreign direct investment (FDI) in five plantation crops - coffee, rubber, cardamom, palm oil tree and olive oil tree - via the automatic route. This should help the company bring in a foreign partner and hopefully help turnaround the company.