The Hindu Business Line : Tata Tea targets Rs 7,000-cr turnover

Plans ahead
Apart from the US, the company is looking at acquisitions in Europe, China and Russia.
The R&D wing is working extensively on the extracts of green tea, polyphenol, which has tremendous potential in the skincare product market.
Rules out issue of bonus shares.

Assurance to investors: Mr Ratan Tata, Chairman, Tata Group, meeting shareholders at the AGM of Tata Tea Ltd in Kolkata on Tuesday. - A. Roy Chowdhury

Kolkata , Aug. 8

The Tata Tea Group has targeted to increase its consolidated annual turnover from the present level of Rs 3,000 crore to Rs 7,000 crore within the next three years, through both organic and inorganic routes.

Suggesting that it was an internal target, Mr R.K. Krishna Kumar, Vice-Chairman of the company, said here on Tuesday that it was a modest target and immensely achievable.

"I feel the target should have been higher," he told reporters after attending the 43rd annual general meeting of Tata Tea.

While addressing the shareholders, Mr Ratan Tata, Chairman of Tata Tea, said the company has consciously moved away from being a plantation driven organisation to a packaged and branded products company.

Tata Tea has already established itself in the tea and coffee sectors, and is now looking to broaden its base as a beverage company. And for this, it is planning new products, which would have tea as a base. Tata Tea is also looking for a strategic acquisition in the US.

"Tea has many attributes and we want to leverage it and develop wellness drinks, which would be accepted worldwide. This would also help propel our future growth targets," Mr Tata said.

Explaining the rationale behind an acquisition in the US, Mr Krishna Kumar said, new trends in the American markets are followed by the other developed countries. Subsequently it comes to the developing markets like China and others.

"Apart from the US, we are also looking at acquisitions in geographies like Europe, China and Russia," Mr Krishna Kumar added.

In this context, both said that the R&D wing of Tata Tea was working extensively on the extracts of green tea, polyphenol, which has tremendous potential in the skincare product market. Tata Tea would like to develop itself as a major producer of this intermediary product.

Meanwhile, responding to shareholders' query, Mr Tata ruled out any bonus shares and added that it would lead to lower annual dividend payout. For 2005-06, Tata Tea has declared a dividend of 120 per cent.

Talking about the restructuring of North India plantation operations, he said the company was studying options, which would help workers to prosper and also enhance shareholders value.

Mr Tata said that the prospects of the tea plantation sector in the near future were buoyant and the outlook for branded tea business extremely good.

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