The Hindu Business Line : Tata Tea to boost global presence

TATA Tea said on Monday it plans to increase its global presence through acquisitions in "right geographies" and also by further developing its product portfolio.

The company's focus would clearly be on its branded business, that accounted for a whopping 86 per cent of total turnover in 2003-04 against a mere 14 per cent share of the plantation business.

Tata Tea, the second largest tea company in the world, sells under two brand portfolios - Tata and Tetley - and accounts for five per cent of the global tea market share, second only to Unilever with 11 per cent.

"We are today present in only 35 per cent of the global tea market so our focus has to be on further growth and penetration into newer markets. Growth for Tata Tea will come organically as well as through acquisitions in the right geographies," Managing Director, Mr Percy Siganporia, told Business Line from Kolkata. He did not provide any further details on possible acquisitions.

On whether the company wants to exit its tea plantation business, he said, "This is one of the potential scenarios that we have examined since the plantation activity has been in a slump for the last few years."

At present, Tata Tea owns 55 tea estates covering 26,500 hectares under cultivation and produces over 60 million kg of tea. Mr Siganporia said over the last three years the plantation business has been under a depression, but hastened to add that the company was examining several options with regard to its plantation business and a final decision was yet to be taken.

"We will do a detailed analysis before taking a final decision (on whether to exit the plantation business). Meanwhile, we are working on different models of tea sourcing," he said.

At present, Tata Tea has eight different brands of tea selling in the Indian market. These include Tata Tea Premium and Gold, Tetley, Gemini, Temptation, Agni, Kanan Devan and Chakra Gold. The company owns over 98 per cent stake in UK's Tetley Group. For the 12 months ended March 31, 2004, Tata Tea posted a consolidated worldwide turnover of Rs 3,111 crore, while net profit stood at Rs 210 crore.