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Our Bureau

For undertaking non-tea activities by proposed company

MR P.T SIGANPORIA, Managing Director, Tata Tea, at a press conference in Kolkata on Thursday. — A. Roy Chowdhury

Kolkata , Nov. 2

The Assam Government has allowed Tata Tea Ltd (TTL) to use, to start with, only five per cent of the total area under various tea estates in the State for undertaking non-tea activities by the new company proposed to be floated by TTL in partnership with IFC, IL&FS, GMS and others.

TTL has 20 tea estates in Assam totalling more than 20,000 hectares but tea plantation is undertaken over 12,667 hectares.

The proposed new company will also have under it TTL's four tea estates (totalling 3,829 hectares) in Dooars in West Bengal. Tea is produced in 2,094 hectares.

"The West Bengal Government is yet to indicate how much of the land under these tea estates will be allowed for undertaking non-tea operations by the proposed company," Mr P.T. Siganporia, Managing Director of TTL, told newspersons here on Thursday.

Fisheries, ginger

Asked about the kind of non-tea activities to be taken up in the tea estates by the new company, which is yet to be formed, the TTL Managing Director replied that a wide variety of options were being examined.

"In two of the tea estates in Assam, we've successfully experimented with fisheries and ginger cultivation," he said, pointing out that the West Bengal Government had already announced its policy of allowing tea gardens to promote tea tourism and take up cultivation of medicinal plants.

Both agro-based and non agro-based activities were being considered and only such activities as would be more remunerative than the present tea production would be taken up, he said. Right now, the turnover of the TTL's tea gardens in Assam and Dooars together was around Rs 224 crore annually.

Enhancement of value from non-tea operations, as he explained, would be achieved through various ways such as developing appropriate value-added products, progressively increasing areas under alternative crops, capitalising on and leveraging back-end capability through supply chain partnership, value sharing with organised retails and agri-product exports.

While indicating that the new entity was likely to start functioning from April next year, Mr Siganporia, however, declined to say anything about its probable equity structure.

"Much would depend on the employees who can pick up equity stakes in the new company and for which TTL will provide interest-free loans of Rs 8,000 per worker and Rs 20,000 per employee and shares will be offered at par value and the repayment of loan will be spread over seven years," he said.

"We do not know how many of the 31,000 employees will exercise the equity option given to them," he said, adding that other Tata Group companies might also pick up shares in the new company and the debt-equity ratio might be 1:1 or even less than that.

In reply to a question, he made it clear that the business with Tetley would in no way be affected by the proposed restructuring of operations of the tea gardens in Assam and Dooars.

More Stories on : Tea | Announcements | Policy | Tata Tea Ltd | Outlook

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