4-pronged
Tata Tea growth strategy
Telegraph
— March 28, 2002
- Calcutta:
Tata
Tea, the country’s largest producer of tea,
has worked out a four-pronged strategy for growth
in the next fiscal. The growth strategy includes
tightening fiscal norms, enhancing brand equity,
increasing profitability of the tea estates
and restructuring plantations and operations.
It has appointed Accenture to help tighten its
finances. "A small team from Accenture
is also helping us to enhance our brand equity,"
said P. T. Siganporia, deputy managing
director of the company.
He said Accenture is currently working out strategies
for overhauling the entire supply chain management,
to reduce costs. The consultant will also suggest
areas of fresh investment, for higher returns.
"Apart from enhancing our brand equity,
the company is also trying to establish a quality
profile norm for plantations and operations
with relatively higher profit yields that benchmark
operations," Siganporia said.
The company is also closely observing the entire
tea industry’s restructuring plans in the face
of low price realisation and high production
costs. "It has to be a holistic approach.
We cannot do it on our own. We hope that in
the next financial year something will happen
and accordingly we can implement those measures,"
he said.
The company is also looking at various options
like establishment of single estate brands and
opening of tea parlours for growing its business.
Commenting on the performance of the company
in the current financial year, he said it has
not been a favourable year for the Indian tea
industry, including Tata Tea. Adverse weather
conditions along with falling prices have affected
the company.
"In spite of all this, we shall outperform
the industry," he said. The company, which
produced 55 million kgs of tea this year, is
the second largest buyer of tea in the Guwahati
auctions.
Tata Tea has also worked out a detailed structural
framework for integration with Tetley. It has
decided to constitute a supervisory board comprising
vice-chairman Krishna Kumar, Homi R. Khusrokhan,
managing director, P. T. Siganporia, deputy
managing director, John Kelly and Peter Unsworth
from Tetley.
The supervisory board will manage co-ordination
issues across Tata Tea and Tetley like strategy
and portfolio decisions, communication, new
initiatives for joint working, refinancing options
and final plan and legal and statutory issues.
The company has also set up eight working groups—geographic
growth, MIS and planning, general (non-tea)
procurement, US strategy, research and development,
IT, tea sourcing and HR.
It has also decided to include Vish Govindaswamy
of Watawala Plantations of Sri Lanka in the
tea buying and sourcing group, since the company
feels that Watawala Plantations will be an important
part in the integration process with Tetley.
Tata Tea has appointed Boston Consulting Group
for working out the roadmap for smooth integration
of Tata Tea and Tetley.
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