Tata Coffee to buy Highhill

The company has finalised an arrangement with the promoters of the Highhill Coffee to acquire the company, which owns an instant coffee facility at Jeyamangalam, Tamil Nadu, having a capacity of 3,600 metric tonne.

The value of deal could not be ascertained. The plant is a 100 per cent export oriented unit.

Explaining the rationale behind the move, M H Ashraff, managing director, said, "The instant cofeee business is a growing rapidly and the thrust is on the exports through value additions. Also, countries such as Russia, CIS, have been shifting towards coffee consumption."

The instant coffee division contributes 50 per cent to the turnover of Tata Coffee, which is being exported to Russia and CIS markets, Africa and Far East.

The company has two brands of its own Mysore Gold and International Tata Cafe which is doing fairly well in Russia and CIS. However, bulk of instant coffee goes as customers' brands.

The company is also exploring opportunities in other markets such as Australia, south-east Asia and Europe. Australia consumes 40,000 metric tonne of coffee per year.

The company currently has a capacity of 2,500 metric tonne of instant coffee at its Andhra Pradesh facility.

Tata Coffee has also initiated setting up of a joint venture company for marketing its instant Coffee in Russia.

Tata Coffee is the second largest exporter of instant coffee from India after Nestle. Instant coffee is mainly consumed in Russia, the CIS countries, the UK and Australia.

The company's brands include Tata Coorg, Tata Coorg Double Roast, Tata Kaapi, and the newly launched Mr Bean. Mr Bean is being positioned by Tata Coffee as a power brand to spearhead growth in the retail market.