Tata Tea (GB), a subsidiary of Tata Tea, has signed an agreement to acquire the assets of Jemca, the largest tea company in the Czech Republic from food processing company, Alima Znackova Potravina, for an undisclosed amount.
The acquisition, funded by the Tetley g group, was aimed at giving the company a foothold in the thus-far-unchartered Czech Republic. This was the second acquisition from Tetley in the last seven months.
Ken Pringle, executive vice chairman and chief executive officer of the Tetley group and director Tata Tea said, "This acquisition is a further development of our plans to grow the Tata group's tea business around the world. It gives us a market leading position in an area where tea consumption is high and where we have been previously unrepresented."
He added that the experience of Jemca and Tetley would complement each other well and combine to create a significant presence in Eastern Europe.
Jemca has a production facility in Jemnice, which is 200 km south east of Prague. Percy Siganporia, managing director Tata Tea said, it was a completely automated plant and would cater to Jemca's current sales and service the company's Czech business. The plant handles black tea, infusions and herbs.
Jemca would continue to trade under the Jemca brand name. Jemca has a whole range of sub-brands and stock keeping units.
Siganporia said, Jemca was strictly a branded operation and the acquisition was in sync with the company's plan of growing its branded operations. Tata Tea has decided to exit its plantation business over a period of time and grow its branded business.
Jemca has a 26.6 per cent volume share of the tea market in the Czech republic, according to an A C Nielsen survey in November 2005. The company has a turnover of 300 million Czech Koruna or $12.5 million. The other two prominent players in the Czech Republic were Douwe Egberts and Tee Kanne.
Late last year, Tetley US Holdings Ltd, USA acquired FMALI Herb Inc and Good Earth Corporation. Good Earth happens to be one of the fastest growing specialist tea brands in the US with a focus on the West Coast and a 3.7 per cent share of the US specialty tea market.
On whether the company was eyeing any other geography, Siganporia declined to comment.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
