Munnar: Faced with intense competition from regional players, Tata Tea Ltd (TTL) has embarked on a diversification plan to retain its profitability and market share. The company is in the process of expanding its product portfolio by launching new varieties of tea, like ice tea, green tea and organic tea. It is also looking at growing various ayurvedic medicinal plants, which have great demand in Kerala, near its tea estates.

TTL is shortly set to launch its ice tea under the Tetley brand. TTL executive director V Venkiteswaran said, "We are looking at venturing into new areas of businesses which will add revenue apart from our core business. As far as our tea business is concerned, we want to be present at every point of offerings. Our opportunities lie in category extension in our existing developed retail markets and global expansion by going into emerging markets. Though we started as a plantation company, we want to be a full-fledged marketing company."

For the last few years, the tea business in India had witnessed a downfall in growth. This was mainly because the prices of tea had gradually fallen and big players faced tough times from low-priced products offered by the local players, he added.

TTL is the market leader in the branded package tea market, with brands like Chakra Gold, Kanan Devan, Tata Tea, Brahamaputra and Gemini, among others.

Its recent acquisition of international brand Tetley has added a new feather in the cap. Tata Tetley, the joint venture between TTL and Llyons Tetley Ltd, UK, has set up a 100 per cent export-oriented unit at Kochi in Kerala. In India, TTL owns 55 tea estates with an area of 26,500 hectares under cultivation, producing over 60 million kg of black tea and 2 million kg of instant tea annually, and operates 11 modern packaging units across the country. The company has around 27 tea estates in the high ranges of Munnar in Kerala. It has also been manufacturing organic tea through plantation of 250 hectares of land at Munnar. The company is looking for exporting its products in Europe and US where there is huge demand for organic tea.

Mr Venkiteswaran said, "While the domestic market for organic tea is insignificant, the world market is mainly dominated mostly by the Chinese products. We feel that there is an opportunity for us to grow in that segment, mostly in the international market."

Globally, tea markets are inhomogeneous in nature and actually the opportunity lies in that range of difference of the potential for repositioning for a tea brand."

The company also has installed capacity to produce around 2170 tonne per annum of instant tea at Munnar which is mostly exported to various countries around the globe. The South Indian operation of TTL contributes around 25 per cent of the total turnover of the company. During 2002-03, the various estates in South India belonging to TTL has produced around 30 million kgs of tea.

(The trip for the story was sponsored by the company)