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| Tata Tea |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 25074 |
| Company name | Amalgamated Plantations Private Limited |
| Country | India |
| Sector | Agriculture and Forestry |
| Environmental category | B |
| Department | Agribusiness |
| Status | Pending Signing |
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| Date SPI disclosed | September 14, 2006 |
| Projected board date | October 16, 2006 |
| Previous Events | Approved: November 8, 2006 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The project is to enable the setting up of a company which would acquire and manage the 24 tea plantations located in Assam and West Bengal currently owned by Tata Tea Limited (TTL) and implement a sustainable employee-owned plantation model, in which the management and employees would have a significant shareholding.
The company proposes an innovative business model that would be centered around deriving greater land and labor productivity through more efficient cultivation, improved capacity utilization of processing operations, alternative crop cultivation and potentially exploiting the tourism potential in the scenic plantation locations. |
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| Project sponsor and major shareholders of project company |
The project sponsor is TTL, which is part of the Tata Group. TTL is the second largest player in the global tea market.
The company’s shares will be held by the management and employee of the company (15% - 20%), TTL (19%), IFC (19%), and other investors the balance. |
| Total project cost and amount and nature of IFC's investment |
| The total project cost including capital expenditure and working capital is estimated at $87 million over the period FY2007-2009. The proposed IFC investment comprises of an equity investment of up to $7.8 million. |
| Location of project and description of site |
| TTL currently owns a total of 24 plantations in the north east of India. The total grant area under the plantations is approximately 24,000 hectares with about 20,000 hectares in Assam and 4,000 hectares in West Bengal. The company’s head office will be located in Gauhati. |
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| Anticipated development impact of the project |
The project is expected to lead to:
- Increased sustainability of plantation operations through an innovative business model.
- Preservation of jobs for more than 30,000 people currently employed in the plantations and creation of additional jobs in the alternative crop sector.
- Increased business for small holders that supply green leaf to the company.
- Providing leadership in initiating change in the industry. |
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| IFC's expected development contribution |
- Support for an innovative business model in an industry facing a challenging situation;
- Honest neutral broker role to support a fair transaction;
- Mobilizing capital. |
| Environmental and social issues - Category B |
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.
The review of this project consisted of:
- appraising technical, environmental, employment terms and social information submitted by TTL;
- a site visit to TTL’s office in Gauhati; and
- visits to three of the 24 tea plantations owned by TTL in the north east of India.
Full details on the findings of IFC’s environmental and social appraisal are available in the Environmental and Social Review Summary (ESRS) and Environmental and Social Action Plan (ESAP).
Environmental documentation, including ESRS and ESAP translated into local languages, is available at the following locations:
- Guwahati Office
TATA TEA Limited
G S Road
Christian Basti
Dispur
Guwahati 781005
- Nahortoli T E
PO Dikom
Dist Dibrugarh
Assam 786101
- Teok T E
PO Teok
Dist Jorhat
Assam 785112
- Hattigor T E
PO Hatigarh
Dist Darrang
Assam 784524
- Rungamuttee T E
PO Mal
Dist Jalpaiguri
West Bengal 735221 |
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| For inquiries about the project, contact: |
Mr. L. Krishna Kumar, Senior Vice President – Finance
Tata Tea Limited
1, Bishop Lefroy Road, Kolkata 700 020 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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