Wellington (Nilgiris), Sept 21: The Rs 900-crore Tata Tea Ltd has drawn up an aggressive growth strategy which entails plans for doubling its existing market share for packaged tea from 21 per cent to over 50 per cent in the next two to three years, increasing exports and identifying new export markets, expanding its distribution network in rural areas besides strengthening its R&D efforts.Speaking to The Financial Express, Tata Tea Ltd executive director MH Ashraff said that the company was vigorously pursuing its packet tea market expansion programme and the current market share would be doubled in the next two to three years by launching new brands in segments where Tata Tea is currently not there.
``As for instance, Tata Tea is not present in the premium leaf tea segment. So we would launch a brand in this segment. Then our brand `Agni' is doing very well in the lower segment. So we may put another brand below this. Tata Tea is also working towards developing technology for flavoured tea,developing tea with nutrients/vitamins besides development of advanced packing materials at its R&D centres,'' added Ashraff.
In order to fulfill demand of tea for its new brands, Tata Tea would procure high-quality tea from auctions rather than acquiring new estates. Ashraff said that Tata Tea has shifted its focus from acquiring new gardens to purchasing more tea from the auctions.
``We want to get into new brands by procuring more good quality tea from sources and then blend it with our tea or sell it under various brands,'' he said.
This shift in strategy to procure more tea from auctions is due to the fact that no new gardens were up for sale in Assam or Bengal and some of the tea gardens which are available for sale in south India were in bad shape and acquisition of those would mean huge investments on toning up their operations. However, Tata Tea is considering purchase of some gardens in Africa and Indonesia.
Tata Tea has reached a volume of over 75 million kg which it is selling in packagedform under various brands. Production from Tata Tea's own estates is around 65 million kgs and the balance is procured from auctions.
Future plans of the company entails selling tea under two platforms. One is the plantation fresh tea, where from Tata Tea-owned gardens would be used for its brands like Tata Tea Flavour and Kanan Devan.
Then would be the teas procured from auctions and will be done at its packet division in Bangalore and will be sold under different brands like what Hindustan Lever does for its packet tea sales.
Ashraff said that most of the plans have currently been put on hold and all depends on how the take over of Tetley takes shape.
Giving details of various brands under its fold, Ashraff said that Tata Tea's recently-launched `Gemini' has seen an unprecedented success. The company is hoping to sell 15 million kg in the first year itself under this brand. This brand is sold all-over India.
Then Tata Tea has its famous brands in south such as Karan Devan and its variants whichare being sold in Kerala, Karnataka, Tamil Nadu and Goa. Then it has `Chakra Gold', which is its best-selling brand in south. From its south India plantations, the company has its popular Tata Tea brand which is sold in states of Andhra Pradesh, Madhya Pradesh and Maharashtra .
Tata Tea Premium is sold all over India and is available in various polypacks and packs. This, along with `Chakra Gold,' is sold in the premium tea segment. Other brands of the company are `Leo' and `Lucky Cup'.
On the exports front, Ashraff said that Tata Tea was currently exporting 10 per cent of its total production and that efforts were on to give a major fillip to the company's exports. This will be done by identifying new markets besides the existing ones and by launching new brands after procuring high quality tea from auctions.
Ashraff said that the company's thrust from now onwards was to appoint stockists in the rural areas and strengthen its distribution network there. Rural market, he said, held a lot of potential andscope for the company to expand its operations.
On R&D, Tata Tea is currently developing new high-yield quality clones besides other innovations. Tata Tea is also planning to set up new R&D centres in south and north Bengal. Currently, the company was spending 0.45 per cent of its turnover on R&D, which would go up to 0.65 per cent in the next two to three years.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.