Tata Coffee plans Rs 100 cr facility

Tata Coffee has proposed to set up a manufacturing facility for freeze dried coffee at a cost of approximately Rs 100 crore. The facility is to have a capacity of 2,000 tonne per annum and will be set up under the Export Oriented Unit / Special Economic Zone scheme.

M D Kumar ,vice-president (finance), said, "The exact location is to be finalised but it will be in South India. The facility will cater to the demand from European and Russian markets. It should be operational by the next fiscal".

Tata Coffee is also set to buy out six plantations in South India of parent company Tata Tea for nearly Rs 55 crore.

Tata Tea managing director Percy Siganporia said, "We have received a favourable bid from Tata Coffee. The deal will be to the tune of Rs 50-55 crore subject to necessary government and other approvals. It should be closed in a few months time".

Out of the six plantations, one is in Kerala while the remaining are in Tamil Nadu.

Tata Tea had earlier transferred 16 of its estates in South India to Kanan Devan Hills Plantations Company Private Ltd, which is principally owned by its employees. As a consequence of this transfer, Tata Tea's results for the quarter ended June 2005 includes exceptional income amounting to Rs 10.72 crore, over and above operational income.

Siganporia also said that as of July 1, a seventeenth plantation at Devikulam in South India - which was thus far under litigation - has also been transferred to Kanan Devan Hills Plantations Company. Tata Tea holds 19 per cent stake in Kanan Devan Hills Plantations company. After the further transfer of six plantations to Tata Coffee, Tata Tea will still be left with two more plantations in South India.