A shadow of gloom has stuck to the tea industry for the past few years. While some plantations have closed down, others are on the brink of closure.
This year looks no better with a bumper crop looming large and uncertainty prevailing in key export markets. However, the pressure has not deterred Tata Tea, which made some aggressive launches over the last year, including the much-awaited Tetley brand.
On the operations front, the company not only embarked on a massive restructuring exercise but also introduced its maiden VRS. Homi R Khusrokhan , managing director, Tata Tea Ltd, spoke to Ishita Ayan Dutt and Pradeep Gooptu on these issues. Excerpts.
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The tea industry has been reeling under recession for the past few years. What are the problems facing the industry? And what is the remedy?
The difficult phase in the tea industry will persist for two to three more years. Production cannot be absorbed by domestic demand and the industry has to rebuild its export base. This means that we have to build competitiveness, so that we can take on new entrants in the global market.
We also need to make some internal changes. Production costs have to be fine-tuned and the quality of bought leaf has to be monitored closely. We have to learn to avoid the temptation for quantity.
At the plantations, we would have to go in for mechanisation in the plucking and leaf handling stages. We have had excellent results with controlled shearing in some of our gardens.
The bottomline is that the industry has to get out of substitutable, commodity type teas and focus on unique Indian varieties like Darjeeling and Assam that are our USPs. We have to protect these against cloning.
Externally, we can only hope that some problems will get ironed out. Till such time as Iran lifts its ban on Indian tea, we have to fight an uphill battle in West Asia and CIS markets. New tea-drinking markets are not emerging so the focus on old drinkers has to continue.
The fact that other producers are not trying to copy them in their plantations is a good sign. While African producers are sticking to producing of filler-type teas, it