The Hindu Business Line : Tata Tea bets on multi-pronged strategy

Kolkata, Feb. 3 Tata Tea Ltd (TTL) has embarked upon a multi-pronged strategy for different markets where it operates keeping in view the present tight economic scenario across the globe.

“While we have spent about Rs 58 crore in first nine months of the current fiscal on various initiatives across the globe, we’re not accelerating our acquisition agenda,” Mr Percy T. Siganporia, Managing Director of the company, told newspersons here on Monday.

For the Indian market, the thrust would be on protecting the profit and business growth so that at the time of downslide in the commodity market, the company could grow with a larger base and margin alternatives “to play either in terms of value to consumers or on retention based on each brand equity”.

Overseas markets

In Great Britain, the company maintained its business despite high costs and recessionary trend.

“In Great Britain, we would not go for volume increase, nor for the extreme promotions,” he said, adding that this was needed for retention of better margin.

In the US market, the accent was on cost control and consolidation. Towards achieving these goals, the company had shifted the administrative, sales and marketing office of Good Earth brand of tea from Santa Fay near San Francisco to Montevale near Connecticut.

Also, the manufacturing of the tea was being outsourced from the Atlanta-based Southern Tea, a joint venture between TTL and Harris Tea of the US.

Coffee cooperation

“The manufacturing of the Tetley brand has been outsourced a few years ago,” he said. “Coffee operation in any case is a standalone operation from Landover near New York Pennsylvania belt.”

In Canada, the black tea market, in which TTL had more than 40 per cent share, was fast shrinking while the markets for speciality tea, green tea , ready to drinks and fruit juice were growing.

“We’ve therefore shifted out focus from black tea to other beverages and launched red tea, made from rooibos, a shrub grown in Africa, and, with it the campaign, exotic Africa and caffeine free,” he said.

Russia, he felt, held out a big opportunity that needed to be exploited.

The joint venture in China to produce tea extracts would be ready for operation within the next few months.

Building exec office

Mr Singanporia, who would be relocating to London shortly, said the markets in the US and Asia Pacific, including Australia, would be added to his portfolio.

“We are trying to build the executive office, as a team in London where the CEO, the Deputy CEO, the Chief Financial Officer, global innovation and brands director and the HR director who constitute the executive office, along with the mentor, will be there. The mentor will be Mr Hamid Ashraf who will be (the) balancing force,” Mr Siganporia said.

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