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Man with the Midas touch

Ishita Ayan Dutt | May 07, 2005

Until last week, Mukundray K Shah of MK Shah Exports was only known as a leading tea exporter of the country.

But almost overnight, the acquisition of Rossell Industries from Hindustan Lever placed him among the top ten Indian tea barons. His annual tea output has grown from 5 million kg to 11 million kg.

This was not the first time Shah acquired a Rossell tea estate. Shah's association with Rossell dates back to 1999, when he acquired one of its gardens, Koilamari in Assam.

But, it was in 2001 that Shah grabbed the attention of the tea plantation sector when he bought three gardens in Assam from the BM Khaitan-promoted Williamson Magor group.

At that time, many people refused to take him seriously. Some industry representatives went to the extent of saying he was fronting for somebody else.

But Shah did not let that bother him. The recent acquisition will go a long way towards silencing some of his critics.

Tea export will remain the mainstay of Shah's business. He is a leading Indian tea exporter, selling in markets in the Commonwealth of Independent States and the European Union.

With operations handled from Mumbai and Kolkata, Shah has successfully forayed into the markets of Kazakhstan, Ireland, the UK and Germany.

He has set up full-fledged export offices and warehouses in different locations in Russia and the CIS to ensure off-the-shelf deliveries.

Shah sells his MK brand of orthodox and CTC tea in these markets. To provide the entire range of packaged tea items, he has now introduced MK tea bags in the market.

Those who know him say Shah's forte is marketing, especially in foreign markets.

In spite of this, Shah maintains a low profile in the tea circuit. But, industry representatives say the septuagenarian came across as a man with impeccable business acumen, tremendous foresight and strong determination.

Some of this can be seen in the Rossell deal. Though Shah did not disclose what he paid HLL for the acquisition ("It is a secret," he said), industry sources disclose that the amount is much less than the Rs 175 crore (Rs 1.75 billion) HLL paid to Delhi-based YK Modi, the second son of KN Modi, to acquire Rossell in 1999.

But, it is not going to be a cakewalk for Shah. The tea gardens were a drag on HLL's bottom line.

Shah is not prepared to disclose his gameplan for turning Rossell around. But, it seems money is not a constraint. Having funded the acquisition from internal accruals, he has no plans to tap the stock market.

At the moment, Shah is busy brewing future plans for his two sons and three grandchildren. If a good opportunity comes his way, he may acquire some more gardens.

Alternatively, he can also enter a "new economy" business for the sake of his grandchildren. Either way, there is no stopping the man with the Midas touch.


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