Plans restructuring activity in north Indian plantation

Kohinoor Mandal

The numbers


Tata Tea

produced 44.3 million kg of tea during 2005-06, which included bought leaf also.

The North

India estates registered an all-time high production of 37.7 mkg in the last financial year.

Kolkata, July 28

Following the merger of the Kochi-based packaging subsidiary Tata Tetley Ltd, Tata Tea Ltd registered a 60-per cent growth in exports in the last financial year 2005-06. After the successful restructuring of the South India operations, the tea major reaffirmed its commitment to carry out a similar activity in its North Indian plantation sector.

However, Mr Ratan Tata, in a statement to the shareholders, clarified that it was different from the Kannan Devan formula because the soil chemistry, product quality and operational size of the regions were different. According to him, the company is exploring a "model involving partial employee ownership and participation coupled with revenue streams beyond tea" because it would ensure "long-term sustainability".

Tata Tea has started planting several other crops in non-tea areas of its existing tea estates. All these crops have a commercial potential, which the company wants to exploit.

Mr Tata said the move would "insulate" the financial health of the tea gardens from the vagaries of plantation and volatility of market prices.

Export of Tata Tea during 2005-06 was Rs 155 crore. It marked a growth of around 60 per cent in comparison to Rs 97 crore registered in 2004-05.

The growth in exports came due to the merger of Tata Tetley into the company. The merger became effective April 1, 2005.

This company, which has now become a unit of Tata Tea, was catering to tea bag requirements in Australia, Poland, CIS and the West Asian countries.

Production

Tata Tea produced 44.3 million kg (mkg) of tea during 2005-06, which included bought leaf. In 2004-05, its production was 59.7 mkg and it included 27 mkg produced by the South Indian gardens. The North Indian estates registered an all-time high production of 37.7 mkg in the last financial year, which included bought leaf too. Production of instant tea powder was 46.03 lakh lbs. This too was an all-time record for Tata Tea. "Sale of instant tea during the year was also higher than the previous year but the average realisation was somewhat lower," the company stated.

(This article was published in the Business Line print edition dated July 29, 2006)
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