Rediff Logo Business Banner Ads
Find/Feedback/Site Index
December 15, 1997


Tata Tea plans global operations

Tata Lea limited, one of the largest tea-growing companies in the world, would acquire tea gardens in other countries to enlarge its operations globally.

The company has just bought stakes in the large Watawalla tea plantations of Sri Lanka and is in the process of acquiring gardens in African tea growing countries in a bid to become an international tea major, M H Ashraff, executive director of Tata Tea Limited, said in Munnar, Kerala.

The company has 11,644 hectares of tea gardens in the high ranges area of Kerala and adjoining Anamallis slopes in Tamil Nadu. This area, bought over from the English firm James Finlay, accounts for 40 per cent of the Tata group's tea estates in India. The other 60 per cent is in Assam.

Ashraff said the company's move to extend its tea growing, processing and marketing activities to other countries is part of the group's bid to go global and capture a domineering position in the world tea business.

Ashraff stated that the company did not intend to acquire or develop new tea gardens in India as other tea growing countries are identified as sunrise areas. The productivity in new tea gardens in Kenya for example is more than double that of the average Indian tea gardens, he pointed out.

Ashraff said the company's turnover this year was expected to be around Rs 50 billion, up from last year's Rs 30 billion, mainly due to the better production climate and higher international tea prices.

The Tata Tea executive director said the company's current production level of about 32 million kg would be raised to 40 million kg in the next few years, mainly by stepping up productivity from the existing gardens.

At the moment, though the company produces blended and packaged tea for the domestic market, its sales abroad are in bulk through tea auctions.

Ashraff pointed out that 70 per cent of Tata Tea's production from the southern states was processed into ''crush, tear and curl'' tea, while the remaining 30 per cent is made into ''orthodox'' leaf tea of high value. CTC tea is the favourite in the Indian market.

Ashraff said the company has made a successful entry into the Pakistan tea market this year by selling 300,000 kg of CTC from its South Indian gardens.

He added that Tata Tea is also exploring the huge United States' market for ''iced instant tea.'' The company has already set up a subsidiary in Florida to reprocess the basic instant tea from the Munnar plant into consumer packets of American regional preferences.

Last year, the company sold three million pounds of instant tea into the American market. Demand for instant tea is picking up in the European countries as well, Ashraff added.

The Tata Tea executive director said the company was going in for selective mechanisation of the tea forming and picking operations in the face of labour shortages and high wages.

The Tata Tea-ULFA controversy


Tell us what you think of this report