The Hindu Business Line : `Presence in all major towns in 3 months time' — Mr Pranab Barua, Managing Director of Godrej Tea

THE Godrej Group, which has a strong presence in several consumer goods, recently entered the tea business. The venture, initially part of Trans Electra Consumer Products, was later christened Godrej Tea Pvt Ltd. Finally, it became Godrej Tea Ltd. All these in a matter of months, from the second half of 2002.

A point worth mentioning is that Mr Pranab Barua, Managing Director of the tea outfit and Mr A. Mahendran, MD of Godrej Sara Lee, are co-promoters along with the group. Mr Barua, who had dealt with tea during his stint in erstwhile Brooke Bond Lipton India Ltd, responded to questions from Business Line on the new business as also current tea issues. Excerpts:

What are the expectations of Godrej Tea ? It is over two months since it entered the domestic market .....

The company is currently busy expanding its distribution network. It has already 25 cities and towns. We hope to establish our presence in all the major towns in three months' time.

What about the product range? Does it want to be present in all the price segments ?

Godrej Tea has marked its presence in the premium end of the market with Noble House, which is a blend of high quality Assams with Darjeelings. In the mid-premium segment, it is there with Chai House, which is a strong blend. We have priced it keeping view the common consumer.

What about sourcing tea?

We are sourcing teas from the auctions as also directly from the estates. The venture seems to be banking heavily on the Godrej brand ... Is not it ?

You are right. Godrej is a very strong brand name, which stands for high quality at reasonable prices. The Godrej name is fully intregated into the brand names and are called Godrej Noble House and Godrej Chai House to reassure the consumer about the product quality.

Will Godrej Tea also enter the export market ?

At the moment, it has no plans to enter the export market.

What is shareholding pattern ? I understand you are also a shareholder ...

Sixty-five per cent is owned by the Godrej Group and the balance 35 per cent is owned jointly by Mr A. Mahendran, MD of Godrej Sara Lee, and myself.

How do you view the emergence of Coca Cola on the made tea scene?

I do not wish to comment on another company's venture.

How do you find the tea scene? After all you are dealing with tea after several years ...

In the tea market, there is an oversupply situation, which is resulting in depressed prices. Moreover, a lot of local players have entered the branded tea market.

How does the scene compare with what it was when you called it a day in tea?

The major difference I see in the tea market is the mushrooming of various local and regional players.

How do you find the Tea (Marketing) Control Order 2003 and changes in the auction rules there under?

TMCO 2003 requires a lot of clarifications and until such time as the issues are clear, it is difficult for me to comment.

Do you see better days for tea?

In any commodity business, there is always a supply-demand balance that needs to be achieved. I believe the situation would improve this year.

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`Presence in all major towns in 3 months time' — Mr Pranab Barua, Managing Director of Godrej Tea