Tata Tea, India’s largest tea producer, is examining possibilities of restructuring its plantation operations. 

Speaking on the sidelines of the company’s annual general meeting here on Monday, R K Krishna Kumar, vice-chairman of Tata Tea, said that several options were being weighed to make the gardens viable. Among the models being explored were that of bought leaf factories and co-operatives which would change the structure of green leaf production. 

When asked whether the company, which produces 56 million kg annually, might sell some plantations, Krishna Kumar said, “We are not averse to selling some of the unremunerative gardens. But we would adopt the Tata business strategy where an unremunerative operation is first given the opportunity to transform. Only as a last resort may a sale be considered.” 

The economic value added (EVA) model was being applied to plantation activities so that quality was translated into money values and thereby becomes measurable. 

Earlier, addressing shareholders, H R Khusrokhan, managing director, Tata Tea, said, “The south Indian gardens were being re-arranged in clusters. Around 20 estates were being re-organised in clusters of five.” 

Later, addressing a press conference, Khusrokhan said, “The company is planning to rationalise manpower further and this time it may be extended to certain grades in the gardens as well.” The company has clearly identified branded tea as its thrust area. Tata Tea is already exporting Kanan Devan brand of tea to the Middle East. It also plans to market its flagship brand, Tata Tea, in the US. 

The endeavour of the company was to work as a single global beverage company and hence Tata Tea had integrated the operations with Tetley. Krishna Kumar said, the company would consider a legal merger with Tetley once the debts came down to the corporate level. 

Ratan Tata, Tata group chairman, said the restructuring of balance-sheet would enhance the company’s earnings per share. He cited the example of Tata Motors in which the restructuring added Rs 40 crore per quarter to the company’s bottomline.