C.J. Punnathara

Munnar (Kerala), Feb. 12

WITH 13,350 employees and encompassing an area of 24,137 hectares of south Indian tea plantations, Tata Tea is poised to create one of the largest participatory management enterprises in the world, which is to be run on corporate lines.

Mr V. Venkiteswaran, Executive Director of Tata Tea, told Business Line that barring some preliminary apprehensions, the response from the workers, trade unions and staff to the creation of the new company has been quite positive.

"We are planning to hand over the company to the workers, staff and managers who know the business of running the plantations best. By this move, we will be shaving off a part of the large overhead expenses that the plantation business has been bearing until recently."

The new company will be focusing exclusively on the business of growing tea at the lowest cost, targeting its product to the auction centres and commodity markets. With a 20 per cent stake in the new company, Tata Tea will also get into a buyback arrangement for its packeting and marketing division.

The new company will no longer be contributing to the operational cost in maintaining the Kochi regional office or the corporate office in Kolkata. The cost of maintaining these offices will be borne exclusively by Tata Tea. It is a win-win situation for both the management and the workers, Mr Venkiteswaran said.

Focus to shiftAs Tata Tea has grown, the plantation business, which contributed close to 80 per cent of the company's business 20 years ago, has now shrivelled to less than 15 per cent. With this move, the company can focus its undivided attention to its instant tea division, packaging and branding activities both in India and across the world. In Kerala, Tata Tea will retain control over its instant tea division, packeting centre, general hospital, High Range school and Srishti Complex its centre for the physically and mentally challenged.

It will handover the 17 estates over which it has permanent lease to the new company. It will also sell the Pallivasal and Periyakanal estate, which the company owns. The company has also initiated the process to sell the five tea estates and one coffee estate that it has in Tamil Nadu.

On the successful execution of the project in south India, the company has similar designs for its North Indian plantations as well.

Unions happy

Coming out of a meeting with the Executive Director, the trade union leaders expressed optimism.

Mr Kuppuswamy, INTUC leader, said that his union was satisfied with the proposal and termed it a good scheme.

Mr M.Y. Ouseph, leader of AITUC, said that further discussions and clarifications were sought on several issues, but overall the scheme seemed feasible.

Mr Manikkam of CITU said that it was a good scheme but only on the successful implementation of the project would the true benefits percolate down the workers.

Mr A.K. Mani, MLA for Devikulam, said that he was very happy with the scheme. "The employees are becoming the owners and proprietors of the new enterprise. That is something novel and great."

(This article was published in the Business Line print edition dated February 13, 2005)
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