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'We are not saying no to foods': Percy Siganporia, MD, Tata Tea

Q&A: Percy Siganporia

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Ishita Ayan Dutt Mumbai
Last Updated : Jan 29 2013 | 1:55 AM IST

With the Calcutta High Court approving the restructuring scheme of North India Plantation Division (NIPD) comprising 24 tea estates, Tata Tea is now on the way to realising its vision of moving from a plantations company to a global branded beverage company. Percy Siganporia, managing director, Tata Tea, spoke to Ishita Ayan Dutt on the benefits of the restructuring, the roadmap for the restructured entity Amalgamated Plantations (APPL), and Tata Tea’s vision in the short- and long-term, which could include foray into new businesses.

Is the restructuring of NIPD now complete with the court giving its approval?

We have got the court approval but the process of getting subscription into the company is still underway as financing of the deal is going on.

The boom in tea prices has come at a very good time and helped us in going ahead with the restructuring plan. The surge in prices will insulate shareholders for some time and the transition will become smoother.

With the restructuring of plantations, what is the vision for Tata Tea?

Beverage is our key strength, we have coffee, tea and water, and we are not present in many geographies. We will grow through our portfolio of global, international and regional brands.

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Would you look at entering the foods business?

We are not saying 'no' to foods, but our focus has not been prioritised. In the immediate short-term, our focus is very much on beverages. But we have ambitious goals and if that means evolving our business, we shall do so.

Do you think it is the right time to cut exposure in plantations, given that the industry is on an uptrend?

Yes. Our representative shareholding has come down drastically from 100 per cent, but we had always kept the estates at an arms length as far as transfer of pricing is concerned.

What would be the equity pattern of APPL?

International Finance Corporation, Infrastructure Leasing & Finance Corporation, Globally Managed Services, Tata Investment Corporation and Tata Tea are the stakeholders in the company. Their equity will expand or contract depending on workers’ subscription.

Would Tata Tea reduce its plantation exposure in Watawala plantations in Sri Lanka as part of its strategy to move away from plantations?

Watawala is a diversified company. In a way, I have learnt from their model that tea is not the be all and end all. They are into tea, palm oil, rubber and still diversifying into many more activities.

Can you emulate the model for APPL?

Yes. We could do some of the diversifications that Watawala is doing. Watawala is diversifying into banana exports, dairy farming, bottling drinking water, mini hydro power. But we have to keep in mind the agro-climatic conditions of the region in which APPL operates. Watawala also has branded operations. For instance, Zesta is the second-largest tea brand in Sri Lanka.

Can you elaborate on the APPL model?

Whether fisheries, floriculture, or agro-based products (both cash and food), everything will be done from an entrepreneurial angle. The front-end solution for how they go to the market is under address.

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First Published: Aug 08 2008 | 12:00 AM IST

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