Tata Tea to merge Tata Tetley

Tata Tea has decided to merge its wholly owned subsidiary, Tata Tetley, with the company.

Percy Siganporia, managing director, Tata Tea said, the merger would compensate for the loss in Tata Tea's topline after the recent divestment of part of its portfolio of tea gardens.

Tata Tetley, the 50:50 joint venture between Tata Tea and Tetley, was primarily in the business of tea bagging and packaging.

The company's businesses were in West Asia and Poland.

After the acquisition of Tetley, the company moved Australian operations into Tata Tetley and ramped up capacity of the plant.

The entire manufacturing operations of Tetley, Australia, located at Yara, were shut down and transferred to the export oriented unit (EOU) in Kochi with the idea that the factory would source tea from across regions, add value and then market the product.

Tata Tetley, became a subsidiary of Tata Tea as a consequence of the acquisition of Tetley in 2000.

The company was incorporated during 1992 and after the formation of the joint venture between Tata Tea and The Tetley Group, UK, the business of Tetley division of Tata Tea was transferred to the joint venture company during 1994.

Tata Tetley has a 100 per cent export oriented unit at Kochi and a domestic unit also at Indore, Madhya Pradesh.

The manufacturing base in Kochi was considered as the most efficient and cost effective unit in the group.

This unit was also capable of producing different kinds of tea bags and packet teas with various pack sizes and the range of such products goes to 40.

Siganporia said, it did not make commercial sense to keep it as a separate entity post-acquisition of The Tetley Group.

Post-acquisition, the company buried the Tata Tetley brand in the domestic market and wound up its domestic marketing operations so that Tata Tetley could focus on exports.

The company's role in the domestic market is now restricted to that of a tea bag convertor for Tata Tea, which launched the 'Tetley' brand tea bags under brand license agreement with The Tetley Group.

The Tata Tea scrip today closed at Rs 581.10 on the Bombay Stock Exchange (BSE) and at Rs 582.55 on the National Stock Exchange (NSE).