The Hindu Business Line : Kannan Devan eyes profit in first year

HAVING taken management control of 16 tea estates that were managed by Tata Tea, the newly formed Kannan Devan Hills Plantations Company Ltd plans to turn around and make profits from the first year of operation itself.

Mr T.V. Alexander, Managing Director of the company, said: "By shedding flab on maintenance of the Kolkata, Kochi and Bangalore offices the new company will be making a saving of approximately Rs 10-11 crore. Savings of Rs 3-4 crore will emanate with Tata Tea continuing to maintain and fund the High Range School, Tata Hospital and charitable organisations such as Srishti complex. We will also be making an annual saving on the salary head of Rs 6-7 crore on account of the VRS which we implemented last year."

Under the VRS almost 3,500 employees, constituting 20 per cent of the workforce had left the company.

The company is also putting in place an agro-economic plan to enhance the yield from its estates by two per cent every year. The South Indian plantation activities of Tata Tea had a turnover of Rs 152 crore, but notched up a loss of approximately Rs 11 crore last year. Weather permitting, the company should definitely be raking in a profit this year, he added.

The new company will have an authorised capital of Rs 15 crore, of which Rs 10 crore will be paid up capital. All categories of employees would be entitled to as much 70 per cent of the share capital of the company. Every worker would be entitled to 300 shares, for which the company will provide an advance, which will be repayable in easy instalments. The workers would be entitled for more shares if they want.

Tata Tea will be a minority shareholder contributing around Rs 1.8 crore with 18 per cent stake. The remaining will be held by a Trust, which will be constituted for the purpose.

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