Wagh Bakri Tea Plans Rs 100-Crore Plant In Gujarat

Wagh Bakri Tea Group will invest Rs 100 crore towards building a new plant in Gujarat, Chief Executive Officer Sanjay Singal said on Tuesday.

The new unit, which will come up at Dakor in Gujarat, will be ready by the third quarter of 2025. With the move, the Ahmedabad-based company intends to expand its instant tea and raw material warehouse capacities, he added.

According to Singal, who joined Wagh Bakri as its CEO in August last year, the new warehouse will be equipped with automatic stock retrieval system. The computer-controlled system automatically places and retrieves loads from defined storage locations.

"We are setting up a new manufacturing unit to basically meet our expanded demand, especially in the instant tea category, because convenience is a new driver for our consumers, and for that we are setting up additional capacity," he said.

The new unit will increase the instant tea production capacity of the company by five times. "With the new instant tea line, this will grow up to 20,000 packets per day," Singal said. Currently, it produces 3,000–4,000 instant tea packets daily.

As a result, the storage capacity of the Gujarat Tea Processors and Packers Ltd. brand will increase by 50% to about 15–18 lakh chests, with each accommodating 14–20 kg, he added.

Even as the company continues to launch new products every month and open new tea lounges in different cities, it also plans to increase its focus on e-commerce, quick commerce, digitisation, artificial intelligence in manufacturing and big data, Singhal said. "We started in 2023–24 with around 34 tea lounges, and added 20 this year. We plan to add a couple of stores every quarter," he said.

However, while asserting that the company is not aiming for "crazy expansion of tea lounges", Singhal added that "this business is an integral part of our vision for the tea category, so we would like to expand where we can give good experience and make tea interesting, exciting for consumers".

Even when India's tea production dropped 8–12% compared to last year, the company's volume growth has remained higher. "Our production has been higher than last year, with a double-digit growth compared to last year," he noted, adding that fresh pricing will be based on next year's production.

"We assume that prices will rationalise, and we will see how we want to manage that. Having said that, the reason for price increases is that we will not compromise on the quality of a blend even for money," the FMCG player's senior executive said.

Singhal pointed out that Wagh Bakri enjoys 9% market share, according to AC Nielsen. He added that it is the largest selling premium tea brand, with roughly 60 million kg sales annually. Out of this, 12–15% is exported.

"In volume-term, we are growing four-five times the growth of the category. Value growth will be around 10–12% compared to last year," he said.

(With PTI inputs)