Tata Coffee to set up separate unit for plywood biz
The Economic Times — November 19, 2007

Tata Coffee has drawn up aggressive plans for its little known plywood business, which it runs under the brand name, Tata Conswood. For starters, the company has just taken the decision to develop this business as a separate strategic business unit (SBU) to shore up its revenue.

To help the plywood business to become a stand alone SBU, Tata Coffee has decided to set up a plywood factory in Mangalore that will enable it to introduce new products in the domestic market. Earlier, the company used third party facilities for its plywood business.

Talking to ET, Tata Coffee managing director M H Ashraff said: "The plywood business has been with Tata Coffee for nearly 15 years. The Tata Conswood brand has been in the market for nearly 12 years. But we have never given it a big push. With the infrastructure sector booming in the country and economy showing good growth, we have decided to step up our plywood business. A new factory has been planned keeping this growth curve in mind."

Tata Coffee is also tying up with other Tata group companies for selling its plywood. "We have recently tied-up with Tata Motors for supplying high-end sound absorbent panel for its buses, Tata Globus and Tata Starbus. We are also supplying plywood to Indian Hotels for its Taj properties," Mr Ashraff added.

Tata Coffee procures plywood from its own coffee plantation. The shade trees that are planted in its coffee estates are pruned from time-to-time, which are sold to the market under the Tata Conswood brand name. "We will also import plywood from quality-grade plywood from countries such as Myanmar and Indonesia," he said.

Along with its plan to make Tata Conswood a stand alone SBU, Tata Coffee has also decided to develop its retail business, Mr Bean Coffee Junction, into an SBU. It had kicked off its retail plan by opening an outlet in Cochin around one-and-a-half years back. In FY08, the company has plans for opening five retail outlets. The cities chosen for this are Chennai, Coimbatore, Trichy, Visakhapatnam and possibly Bangalore.

"These retail outlets will be owned by us and will be typically spread over some 800 square feet space. We will sell roast and ground coffee as well as liquid coffee. From the next fiscal, we will open retail outlets on a franchisee basis," the Tata Coffee MD said.

Incidentally, the company, which is a major exporter of instant tea to Russia and CIS countries, has also started exporting to Singapore and the Far Eastern countries as well as some quantities to Europe and Africa.