Tata wants end to hostility before Bengal investments

Written by fe Bureau | Kolkata | Updated: Aug 31 2011, 06:53am hrs
Ratan Tata has ruled out any fresh investment in West Bengal by Indias largest industrial group till it is satisfied that there is no hostility by the state government towards it. The group chairman told shareholders at the annual general meeting of Tata Global Beverages on Tuesday: There is a need to satisfy ourselves that there is no hostility towards us. And when we feel that way, we will undoubtedly, like anywhere else, invest in the state.

He also claimed the aborted investment in the Nano automobile project would have created at least 8,000 jobs in and around the plant. It would have been good for the state, he added.

This is the first time after the court battle between the West Bengal government and the group over the return of the land to farmers at Singur has begun that Ratan Tata has made his position clear.

For the state, attempting to attract investment from industrial groups, the comments will be another dampener. Elaborating his statement, Tata said his investment in the state was not guided by any ulterior motives but due to the fact that industry had ignored investment in this part of the country. Thats why we invested here and as I mentioned at that time in many ways we have a fondness for the people of Bengal and wanted to make that (plant).

In response to other questions, Tata contextualised his remarks, saying the group has already made several investments in the state. The fact that we have a cancer hospital and invested R300 crore is a reflection of our affection for the state. Fifty per cent of the beds are going to be free and not only will it save lives in Bengal and the region; it may also bring Calcutta into the limelight in terms of cancer research because it will bring back doctors to work in the state as we will also have a research unit in the hospital. So, there are no bad feelings.

The cancer hospital had a soft launch in May this year soon after the new government led by Mamata Banerjee came to power. Banerjee had led the Singur agitation over land acquisition which forced Tatas to exit the state with its Nano plant.

Tata also declined comments on whether an out-of-court settlement for the Singur issue was possible. Its in the courts today and I dont think I can make a statement on it... We have said that allocation of land shouldnt be done before the courts decide. After Banerjee came to power, one of the first things she announced was that the government would return 400 acre of Singur land to unwilling farmers; the government later enacted a law to take back the land, saying the Tatas had abandoned the project which led the Tatas to take the government to court.

The West Bengal government, meanwhile, said it is open to investment from all quarters, irrespective of the investors political inclinations. Industry minister Partha Chatterjee told a seminar on India-Japan relations at the Indian Chamber of Commerce that the government would not decide on investment proposals based on party colour.

Tata also said on Tuesday that Tata Global Beverages is counting on the distribution strength of Pepsico to deliver our products or the JV products to the shelves.

Speaking to shareholders at the 48th AGM of Tata Global Beverages here on Tuesday, Tata said the Nourishco JV with Pepsi would also launch a new nutritional beverage in October. "The vision of this JV is to increase the marketing reach of our products. Even our Himalayan brand of mineral water will benefit when its widely distrubuted," he said.

To shareholders' queries on growth plans, Tata said the company would have to go up the value chain to reach the target of $ 5 billion in sales in five years. We have to launch high-end products and also go for acquisitions to reach that target, he said. Revenues of the company for the year stood at $1.3 billion.

Besides the JV with Pepsico, Tata Global Beverages has also signed an MoU with Starbucks, which, according to Tata, gives the company scope to supply tea & coffee to them and also to enjoy the scope of jointly retailing through the Starbucks outlets including stores in India and our focus will be in India but everyone is aware what Starbucks will be doing.

Tata also said margins were under pressure due to the phenomenal rise in commodity prices.