The Hindu Business Line : Tata Coffee to tie up with Beeyu Overseas

Tata Coffee is setting up a marketing joint venture with Beeyu Overseas Ltd for sale of its instant coffee products in the global market. Tata Coffee will hold a majority stake of 51 per cent in the joint venture — Alliance Coffee Ltd — which will be headquartered at Kolkata.

Mr M.H. Ashraff, Managing Director, Tata Coffee, said all the instant coffee exports of the company would be done through this joint venture. "Beeyu has a pretty strong reach in the markets such as Russia and the Commonwealth of Independent States, where they have been selling tea for the past 15-20 years. We plan to leverage on its presence in these markets to expand our reach," he said. Alliance Coffee is expected to start functioning from June 1.

To hike authorised capital

Tata Coffee board, which approved the joint venture proposal on Tuesday, also decided to recommend the shareholders at the forthcoming AGM to increase the company's authorised capital from Rs 20 crore to Rs 25 crore by creating 50 lakh new equity shares of Rs 10 each.

The board has also declared a dividend of Rs 6.50 per share (65 per cent on par value of Rs 10) for the year ended March 31, 2006.

Net profit, revenue fall

Meanwhile, the company has reported a drop in net profit and revenue for the fiscal 2006. The net profit stood at Rs 22.32 crore on a total income of Rs 191.15 crore for fiscal 2006 compared to a net of Rs 30.18 crore on an income of Rs 201.65 crore in the previous year.

Mr Ashraff attributed the decline in profit and revenue to the reduction in sales of instant coffee because of the seasonal factors. However, he said that he expected strong sales revenue and profit in the current financial year as global coffee prices are seen steady.

Prices are seen steady this year as the Brazilian crop is expected to be lower than the initial estimates.

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