Tees and tattoos don't go with CEOs, especially of Tata firms, but this one has blended well with peers and his tea's among the country's best. By his own admission, Percy T Siganporia is a CEO with a difference. He didn't get a promotion in the first 10 years of his career; walks into office on weekends in sleeveless Tees with the tattoos clearly visible; reaches out to the music system in the middle of a busy workday to inspire fresh thought; and doesn't read management books, write Shyamal Majumdar and Prasad Sangameshwaran.
"I have to dress more appropriately in Mumbai though, as my target audience there is Bombay House (the Tata headquarters)," Siganporia says with a smile. But when in Mumbai, he more than makes up for this lost opportunity of letting his hair down by often slipping out of his "bed & breakfast joint" "" the Taj Mahal Hotel in Colaba "" to visit the Chowpatty beach to have chaat or pav bhaji.
We order fresh lime soda after the steward at the Taj's Coffee Shop escorts us to a table overlooking a carefully manicured garden where the rain-soaked palm trees are swaying to the sea breeze.
Siganporia has stayed on in Tata Tea for over 34 years now. Was he never tempted to shift jobs? No, he says, for two reasons: first, he virtually grew up in the Tata system "" his father retired as a supervisor with Tata Steel. As a child, he used to stand on the pavements in Jamshedpur with other classmates, waving flags at J R D Tata's motorcade, and dreaming of working for the group one day.
The second reason was the group's spirit of innovation. As a young Tata Administrative Service officer, he chose Tata Finlay because he wanted to "chase the challenge". With its share capital wiped out, Finlay was then headed for closure.
The gamble of the XLRI alumnus paid off as the company (later renamed Tata Tea) today has the world's second largest global branded tea operation with presence in 40 countries.
"Leveraged buyout became part of the lexicon after Tata Tea took over the Tetley Group in 2000. But very few know that Tata Finlay had bought the 51 tea estates of James Finlay, the world's number one tea plantation company, way back in 1983," Siganporia says. The experience under R K Krishnakumar "" his boss then, and now "" proved invaluable while Tata Tea was negotiating with UK-based Tetley, a company over twice its size.
Apart from innovations in financing the deal, patience played a stellar role in bargaining with Tetley. "At times, the talks would break down but we stayed put at the small room at the Tetley office. The strategy paid off as the Tetley guys just didn't know how to say no to a bunch of furiously determined Indians," he says.
We have finished more than half of the allotted time of two hours and Siganporia apologises for forgetting to order the main course due to his "habit of talking non-stop". Given the limited time (he has to rush for an analysts' meet), we opt for the buffet, which turns out to be standard five-star fare.
Unlike us, he doesn't take much time to pick his choice "" a generous helping of salad, a few pieces of fillet fish and a spoonful of noodles.
The Tetley acquisition, Siganporia says, was part of a carefully crafted strategy to turn around Tata Tea. Back in 2000, the company was a small player in danger of being swamped by Unilever. But it refused to fade quietly into the night and made a series of dramatic acquisitions worth $1.3 billion in six years.
While the acquisitions helped it to grow its business around the world and add blends to counter the slowing sales of black tea in major markets, the company devised an efficient umbrella branding strategy in the domestic market. Three variants "" Premium, Gold and Agni "" are now under the Tata Tea umbrella and the strategy helped maximise the potential of the variants, while serving consumer needs at different price points and taste profiles. The variant route has also been used to extend the hugely popular Kanan Devan brand in Kerala.
In the meantime, Tata Tea started a revolution called poly-packaging, which was an instant hit with quality- and price-conscious consumers.
As we pick up the dessert "" he opts for a custard and we prefer gulab jamuns "" Siganporia says the company also simultaneously went in for the third and equally significant strategy of low-cost solutions to build market share.
That gave birth to the novel concept of outsourcing the distribution network. The plan is known as the Canadian model mainly because the company achieved leadership position in that market with just 11 employees on its rolls. The number has now come down to nine, as apart from strategy, everything else is outsourced.
The same model is being followed in India. After the plantations divestment "" through transferring the businesses to workers' cooperatives "" the number of employees at Tata Tea has come down radically. The company now wants to bring down the number further from over 59,000 a couple of years back to 1,000 within the next three years.
Siganporia says 80 per cent of field-level promotions never get designed in a marketing office but are picked up from the marketplace. "We may be a big company but retain the mindset of a small and agile organisation which challenges existing norms all the time," he says.
The result: twenty years ago, Brooke Bond and Lipton held 80 per cent of the market while Tata Finlay's share was 3 per cent. Today, Unilever's share has dropped to 24 per cent while Tata Tea's share is 17 per cent. In fact, for the first time ever, in June this year, the company beat Lever in packet tea with a volume share of 19.2 per cent, as compared to Lever's 18.6 per cent.
It's already over two hours now, but Siganporia is in no hurry to leave and orders black tea. He brushes aside the disappointment over Tata Tea's failure to hold on to Glaceau, a North American beverages company, by saying that the company made a profit in excess of Rs 1,600 crore by selling its holdings to Coca-Cola for nearly twice the amount of its acquisition.
The money gives Tata Tea a cushion to go in for a far bigger acquisition when the target is found suitable. Water will be an important future business vertical for the company, he says, smiling through our queries on the target companies.
We ask him about the recent high-decibel confrontation with the Kerala government over encroachment of land in Munnar, and Siganporia says the allegations are baseless. In fact, the state government had admitted as much in an affidavit filed before the High Court in March 1999. A Kerala government survey in 2001 had also shown a shortage in Tata Tea's holdings as compared to the land allocated by the Land Board.
As we walk out of the Coffee Shop, Siganporia talks about his passion for spending quiet moments with his "fishy" friends. He diligently cleans the aquarium himself and feeds them. "I talk to them and they perhaps respond by sprinting from one side of the aquarium to the other," he says. A CEO with a difference?
