The Hindu Business Line : STC augments product portfolio for retail sale

In a major push to popularise its own branded consumer products for retail sale through organised domestic networks, the State Trading Corporation (STC) is lining up new items to its portfolio of products, besides green leaf tea, which it has already started marketing in Gujarat.

Disclosing this to Business Line in an interview here, the STC Chairman and Managing Director, Dr Arvind Pandalai, said the idea is to tie up with actual growers or producers to get quality material, which would be processed by the Corporation or its subsidiary company, and then marketed, straight to the consumers without any intermediary.

“We had started last year procurement of green leaf tea from small and marginal farmers in Nilgris district in Tamil Nadu and took a unit on lease exclusively to produce both orthodox, and CTC to our requirements, which we initially supplied against our contracts abroad,” he said.

‘Better price’

As the production has gone up, Dr Pandalai said, STC started bringing some quantities of that into the auction centres where “we got better price than earlier for the same unit for the same type of tea”.

Encouraged by this and with more and more small and marginal farmers into the company’s new activity, the Corporation has started producing this tea in consumer pack of 250 grams and supplied it to the consumer through the network of Gujarat State Civil Supplies Corporation, which has got 16,000 fair price shops in the State, he said.

In this new model evolved by STC, the consumer gets tea at 20 per cent lower than what he or she gets otherwise, he said, adding that STC would include other commodities such as cashew in Kerala for domestic market sale.

Including spices

Dr Pandalai said that this would be replicated in spices — chilli and pepper — and pulses. The company would increase offtake from growers in the coming months to ensure a reasonable price discovery for them and to help the ultimate consumers with a fair price and quality material leveraging STC brand, he added.

Meanwhile, STC began its steel operation in the Philippines a year-and-a-half ago, sending slabs either from India or sourcing it from outside, which were rolled into hot or cold rolled products for supply to air-conditioner body manufacturers or refrigerator body manufacturers. “We are now going to do galvanised operation as an add-on in Georgia and Nigeria as another new area,” he said.

In the hydro-carbon segment, Dr Pandalai said STC is considerably scaling up its operation and “some discussions are going on over bio-fuel plantation. The purpose is to control the real critical point in the whole value chain. We have an agreement with a company, which has done a lot of research in jatropha cultivation and processing of algae.”

More production

He said hybrid short-time duration planting material could be utilised, which yield larger percentage of seeds or oil contents. “Once this is done, we would go for large scale plantation and we are going to discuss with top international organisations for building a structure whereby we start collaborating not only in India but also outside.”

Dr Pandalai said stem-cutting reduces the time for a plant to grow and produce seeds instead of normal four years and “we have done this in Coimbatore on a private research venture and the results are good. We have encouraged some of our big clients to use that as an offset programme as a technology development area in bio fuels”.

He said the Corporation logged a turnover in excess of Rs 15,000 crore and a net profit of Rs 100 crore in 2006-07 and the trends during the first half of the current fiscal both in profitability and turnover promise that they remain on course with the target set.