Kolkata: Tata Tea will work with Stern Stewart & Co, a global consulting firm, for improving its EVA (economic value added).

Homi R Khusrokhan, managing director, Tata Tea, said, this is a two-year process and will help setting ground rules and that work towards improvement in EVA.

Stern Stewart & Co, originators of the EVA framework, specialises in helping client companies in the measurement and creation of shareholder wealth through the application of tools based on modern financial theory.

The EVA framework offers a consistent approach to set goals and measure performance, communicate with investors, evaluate strategies, allocate capital valuing acquisitions and determine incentive bonuses. However, the EVA improvement is one of the many ongoing initiatives at Tata Tea.

Addressing shareholders, Khusrokhan made a presentation which featured, among other initiatives, manpower rationalisation, new product development via "stage and gate process", supply chain and ERP as exercises being undertaken currently.

As far as manpower rationalisation is concerned, the company has closed its voluntary retirement scheme and around 12 per cent out of a target of 3,500 have responded. The financial outgo is expected to be in the region of Rs 25 crore spread over 5 years.

Earlier, addressing shareholders, Ratan Tata, chairman, Tata Tea, said this has been a difficult year for the tea industry due to adverse weather conditions.

"There has been heavy rains in the north-east and it will be difficult to predict how this will impact tea," he said.

Commenting on Tata Tea, he said the company will continue to focus on establishing brands. Khusrokhan said the company would focus on brand creation. "More brands will be re-positioned and relaunched," he said. The company has lost market share by 1.4 per cent as compared with last year.

However, Khusrokhan pointed out that in the first half of the current year, Tata Tea has managed to regain some of its lost share. Tata Tea, which is now present at all price points with the launch of Tetley at the high-end and Agni and Agni Sholay at the bottom end, plans to launch flavoured and herbal tea.

The company has also committed to the government that it would increase exports by 15 per cent. Tata Tea has ventured into new markets such as Kazakhstan, UAE and other markets in the Middle East.