Global firms eye stake in Amalgamated

International companies in the non-tea space are likely to pick up stake in Tata Tea's hived-off entity, Amalgamated Plantations, which was formerly known as North India Plantation Operations.

L Krishna Kumar, group chief financial officer (CFO), Tetley said the company would have to get a response from the workers after the court approved the demerger.

Depending on workers' participation in the stake sale, the shareholding of the Tata group and international companies would be determined.

The participation of the international companies could be in the range of 15 to 20 per cent, while other stakeholders in the venture - IFC, IL&FS, and the Tata group - could hold 20 per cent each.

The international investors would have an expertise in the non-tea business. Tata Tea was already running non-tea pilot projects in Assam.

Fisheries, jatropha, fruits and vegetables could be possible revenue streams, Kumar said, but declined to indicate revenues that could be generated from non-tea businesses. It was in keeping with the diversification plans that the non-tea companies could participate in Amalgamated Plantations.

It merits mention that Hardeep Singh, who was chairman of Cargill India, is now the chairman-designate of Amalgamated Plantations. Cargill is an international provider of food, agricultural and risk management products and services. The scheme of arrangement and reconstruction for the transfer of North India Plantation's business to Amalgamated Plantations was already approved by the shareholders. The transfer would be effective on receipt of final approval from the court.

Ken Pringle, executive vice-chairman and chief executive officer, Tetley, and member, Tata Tea board, said that plantations resulted in social obligations.

Earlier, Tata Tea had hived off its South India Plantation Operations as an employees' cooperative, Kanan Devan Hills Plantations. The restructuring was a part of Tata Tea's move to become a branded beverage company.

Pringle said the company would develop the Good Earth brand. In 2005, Tetley US Holdings acquired the US-based FMALI Herb and Good Earth Corporation.

Good Earth had ventured into organic tea and could even move beyond the beverage space. "We have to see how far we can stretch the brand," Pringle said.

(The correspondent is in London on a visit sponsored by Tata Sons)