Dilmah Commits Up to $25 Million to an India Entry
The Sri Lankan producer plans to revive a Coimbatore production plant and open Urban Estate tea lounges, but ruled out conventional retail, aiming to make India a top-10 market by May 2027.
Dilmah Ceylon Tea Company will spend $15 million to $25 million over two to three years to revive a production plant in Coimbatore, India, and open tea lounges under its Urban Estate brand.
The plant would be used for exports, chairman and chief executive Dilhan Fernando said. Business Standard described Dilmah as a company with revenue of more than $550 million, without giving a period for the figure.
The investment targets India's premium segment, not volume. Dilmah will launch a luxury tea brand, Thambapanni, pitched to luxury hotels and hospitality groups in India as a culinary experience. The tea range will be packaged exclusively for India, using spices from 26 local farmers. The company already has tie-ups with Accor, Marriott and Hilton.
The revamped Urban Estate lounges, on a franchise model, will cost about $1 million in India. Business Standard did not separate the plant's share of the $15 million to $25 million total from the lounges' share. The first lounge will open in Colombo, with India to follow by the end of 2027.
Fernando ruled out conventional shops. "We will not go into retail for another 10 years," he said. "It's too hostile an environment."
Distribution will run through a partnership with Fresh & Honest. Dilmah is targeting India as a top-10 global market for the company by May 2027, via direct-to-consumer, quick-commerce and e-commerce channels.
Fernando tied the premium, hospitality-led approach to a shift in who buys tea. "GenZ is looking for wellness and experiences. They're conscious of sustainability and research shows that they're moving away from alcohol based drinks," he said.
Lanka Newspapers put the India commitment at $15 million and did not mention the Coimbatore plant.
Dilmah was founded by the late Merrill J. Fernando and is now run by his sons, Dilhan and Malik Fernando. It sells single-origin Ceylon tea in more than 100 countries.
Sources: Business Standard, Dilmah plans India foray with luxury hospitality tie-ups, tea lounges; Lanka Newspapers, Dilmah Bets Big on India With $15 Million Luxury Tea Push and Exclusive Lounges.