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Mr Ratan Tata, Chairman, Tata Tea Ltd, meeting shareholders during the company's 40th AGM in Kolkata on Monday. - Parth Sanyal

Kolkata , Sept. 8

TATA Tea Ltd is expanding its US operations through the Tetley brand and is considering rationalising its green leaf activities, according to Mr R.K. Krishna Kumar, Vice-Chairman of the company.

He was talking to reporters after attending the 40th AGM of the company.

He said that Tata Tea was also looking at new markets like Pakistan, Bangladesh, Dubai and other West Asian countries.

The company is also contemplating new brands in the ready-to-drink (RTD) and flavoured-tea categories.

According to Mr K. Pringle, Tata Tea's director, the company has started test marketing RTD teas in Canada, France and the UK.

Mr Krishna Kumar said Tata Tea was eyeing a 5-7 per cent market share in Pakistan and 4 per cent in Bangladesh.

In the domestic market, it is hoping to increase its share in the packet tea segment to 22-23 per cent in the next two years from the present level of 19.6 per cent.

"We are in both national and regional segments, and have regional brands like Gemini, Kanan Devan and Agni and national brands like Tetley and Tata Tea too," he said.

Mr H.R. Khusrokhan, Managing Director, later clarified that the company would not launch any new brands but would continue to introduce new variations within its existing brand portfolio.

For the global market, Tata Tea would pick and choose its brands. For instance, it would be Tetley in Russia, Pakistan and Bangladesh and Tata Tea for West Asia, he said.

In the US, Tetley has two joint venture companies for packaging tea. According to Mr Pringle, the company would continue to increase its retail operations but agreed it was weak in the iced-tea and herbal tea segments.

"Iced-tea is popular in southern US, but 50 per cent of total market is herbal tea. We are yet to enter the herbal tea segment," he said. Asked whether any time frame has been fixed for entry into this market, he declined to comment.

Meanwhile, the company has closed down Tetley's factory in Australia and increased the capacity of its Sri Lankan joint venture packaging company, which is meeting the Australian, Polish and Russian demand.

As Tata Tea is focusing on packaged segment, Mr Krishna Kumar said there was a need for rationalisation of its green leaf operations.

"There are many models and we are studying each. You might see some activity next year," he said.

Mr Khusrokhan said the workforce might be rationalised. At present, Tata Tea's manpower is 55,000.

Last year, it reduced manpower through a voluntary retirement scheme (VRS).

"We may introduce a fresh VRS next year and it might be applicable to plantation workers too," he said.

Earlier, at the AGM, shareholders approved the board's proposal to transfer Rs 41 crore out of the Rs 289.54 crore Share Premium Account to Miscellaneous Expenditure Account.

Mr Ratan N. Tata, Chairman, said this would help Tata Tea in enhancing profits and shareholder value.

"We did a similar act in Tata Motors and we are now enjoying the results," Mr Tata said.

Regarding the inter-corporate deposits of Tata Finance Ltd, he assured shareholders that everything would be taken care of by Tata Sons.

"Tata Sons would take all the burden and it would not be passed on to other publicly listed group company if at all any vacuum is created," he said.

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