The Hindu Business Line : Exports beef up Kanan Devan’s balance sheet

Kochi Sep 19 While several Indian tea plantations continue to be dogged by falling yields and dwindling bottom line, the net profit of Kanan Devan Hills Plantations Company grew by 52 per cent amounting to Rs 4.07 crore during 2007-08. Kanan Devan, possibly the largest participatory management company in the world, has declared a 10 per cent dividend for its 12,000 workers, who are all shareholders of the company.

Increase in volume of production and processing, greater focus on exports and higher bought tea operations has helped the company to boost its bottom line. Responding to the fall in auction prices for South Indian tea in the domestic market last year, the company began to give greater emphasis on exports. Tea exports, for the company, more than doubled to 1.86 million kg last year. This was accompanied by 7.10 per cent increase in dollar returns from the international markets, while South Indian tea prices fell by 2.10 per cent.

The company said exports would remain a thrust area for the company’s produce even in future. This has become imperative since development of overseas markets would not only avoid over-dependence on domestic auctions for the sale of the company’s produce, but would also help to insulate price-realisations from adverse domestic conditions and bring greater stability in prices.

BOUGHT TEA OPERATIONS

While several plantations in the neighbourhood continued to remain shut, Kanan Devan was able to extend timely technical assistance and required inputs to small tea growers in the vicinity which brought about substantial improvements in the productivity of these holdings. The bought tea operations from the small holdings and workers of the closed tea estates rose almost three-fold from 0.61 million kg (mkg) last year to 1.66 mkg in 2007-08. The increase in bought tea operations was mainly on account of the remunerative prices that were paid which led to general buoyancy in the prices realised by small growers, the company pointed out.

Even as South and North India reported lower production, Kanan Devan was able to increase tea production to 21.34 mkg (20.31 mkg). South India recorded its third successive year of falling tea production in 2007. Also, the country also could report only a dismal performance on the export front, significantly lower from earlier year.

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