The Hindu Business Line : Tata Tea, Tetley on the prowl for acquisitions

Mr Ratan Tata, Chairman, Tata Tea; Mr R.K. Krishna Kumar, Vice-Chairman; and Mr P.T. Siganporia, Managing Director; during the company's AGM in Kolkata on Wednesday. - Sushanta Patronobish

Kolkata , Sept. 8

THE Tata group is looking at fresh acquisitions for the growth of its tea business both through Tata Tea and Tetley, according to Mr R.N. Tata, Chairman of Tata Tea Ltd.

Mr Tata was addressing the shareholders of Tata Tea at the company's 41st annual general meeting. He said the tea business was eyeing both organic and inorganic growth. "There is growth in our branded tea sales, be it in black tea or herbal or flavoured tea," Mr Tata said.

Elaborating on this point, Mr R.K. Krishna Kumar, Vice-Chairman of Tata Tea, said the group was looking at businesses not just at tea estates or brands. "We are looking at all geographical locations but nothing has been finalised," Mr Krishna Kumar said.

According to Mr Percy Siganporia, Managing Director of Tata Tea, the black tea market was growing in Asia and Russia but had registered a fall in several parts of Europe. On the other hand, the flavoured tea market was rapidly growing rapidly in the US and Canada.

In the last financial year, Tetley brands were launched in Russia, Pakistan and Bangladesh. In the current fiscal, these brands are likely to be launched in the West Asian markets.

In this context, he said that Tata Tea and Tetley were intent on growing and for that it was open to acquisitions. Funds were easily available but the final choice would depend on a number of factors. At present, Unilever held 11 per cent share in the global tea market followed by the Tatas with a 4.5 per cent share.

He laid further stressed on the fact that Tata Tea would continue to grow on its existing brands. "Since April this year, our brands have been registering double digit growth," Mr Siganporia told reporters after the AGM.

Regarding disinvestment of stake in the less profitable tea gardens, Mr Krishna Kumar said that the estates were located mostly in South India. Though he did not rule out an outright sale of these gardens, he still talked of two other options.

First, the company would like to restructure the existing operations in these gardens and make it more profitable. If it failed, they might opt for a model partnership.

"We would like to form cooperatives to the employees and share some of our stake in these gardens with them. We are identifying these gardens and the process of transformation would be over within the next 12 months," he said.

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