An increase in exceptional expenditure for the quarter ended December 31 brought down the consolidated third-quarter net profit of Tata Global Beverages (TBG) by nearly 11 per cent to Rs 64.06 crore as against Rs 71.93 crore reported last year.
These exceptional items were redundancy costs of Rs 2.11 crore and expenditure incurred on long-term initiatives and new projects of Rs 13.92 crore. Redundancy costs here refers to severance packages given to employees who opted to leave the company.
While TBG did not specify how many left during October-December, managing director Percy Siganporia did say on Wednesday that the thrust was on getting “leaner and fitter”. At the moment, TBG employs nearly 3,000 people in 40 countries, he told a press conference here.
The world’s second-largest tea company also reported a nearly 12 per cent increase in net sales to Rs 1,793 crore versus Rs 1,602 crore last year.
The firm, according to Siganporia, has identified India, Great Britain and Canada as its key markets, where it ranks amongst the top two branded tea players. “We cemented our volume and value leadership in India during the third quarter, ahead of Hindustan Unilever. In Great Britain, we rank number two after Unilever. In Canada, on the other hand, we are market leaders in all segments in which we operate,” he added.
The firm, whose consolidated net sales for the first nine months of the 2011-12 financial year was Rs 4,861 crore, said it was scouting for acquisitions in the US and Russia. TBG, which was earlier Tata Tea Ltd, has wrapped up some key acquisitions in the past including that of Tetley in Great Britain, Eight O’ Clock Coffee, Good Earth and Activate in the US, Jemca in the Czech Republic, Joekels in South Africa and Grand in Russia.
Both Russia and US are markets, says Siganporia, where the firm is keen to grow its presence. “That is why the focus is on acquisitions there,” he adds.
Some 65-70 per cent of TBG’s revenues come from international markets, while the balance is from India. Siganporia says the focus in markets such as India will be on the mainline portfolio under Tata Tea (including Tata Tea Premium, Agni, Gold and Gold Darjeeling) as well as regional brands such as Kanan Devan, Chakra Gold and Gemini. Tion, the cold beverage with tea extracts launched two years ago by the company in India, has been withdrawn.
