Jay Shree Tea & Industries Ltd has acquired three tea gardens in East Africa.

It has acquired Kijura Tea Company Ltd from Mr John Simpson through it's wholly owned subsidiary - Birla Holdings Ltd for $2.5 Mn.

It is also acquiring a 60% stake in Mata Tea Co Ltd and Gisakura Tea Co - both in Rwanda, Africa - through an 50:50 JV company floated with Rwanda Mountain Tea and Birla Holdings. Jay Shree is paying Rs 18 Cr for a 30% stake in the two Rwandian tea estates. The other 30% will be held by Rwanda Mountain Tea.

The Rwandian government may sell another 30% stake in the tea estates to Jay Shree in sometime. The balance 10% will be held by a the plantation workers.

Transaction Reference: HinduBusinessLine

Jay Shree which has tea production capacity of 23 mkg from 22 gardens will add another 5.3 mkg by these acquisitions.

Other Indian Tea major, Mcleod Russel acquired Uganda based Rwenzori Tea Investment Ltd in January for about $30 Mn.

Mcleod Russell had also acquired the Gisovu tea estate in Rwanda. But the Rwandan government later called off its deal to sell a 60% stake in the estate to Olyana.

The Rwandan government didn’t want the Gisovu tea estate to be controlled by a foreign company. Learning from McLeod Russel’s experience, Jay Shree entered into a joint venture with a local tea company. Jay Shree Tea’s partner will play a key role in distribution of the tea produced in Rwanda.

The Indian tea companies are looking to acquire tea estates in African countries as the production cost is around Rs 45.70 a kg, cheaper than Rs 65-70 a kg in India.

Earlier in March'10, Jay Shree announced the acquisition of MP Chini Industries for Rs 112.50 Cr.

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