Tata Tea to rejig north India plantation works

Tata Tea will be shifting its plantation operating team from Kolkata to Guwahati.

Tata Tea is in the process of finalising the model for divesting its holding in NIPO (north India plantation operations). As the first step in this direction, it would be shifting its plantation operating team members from Kolkata to Guwahati.

In an internal circular to company officials, Percy Siganporia, managing director, Tata Tea, said the focus of the company's business to develop its brand operation portfolio does not allow complete development of the potential assets.

Siganporia further elaborated that, as in the case of south India plantation operations, there would be employment participation, though to a lesser extent, and a strategic partner would be inducted.

"The solution is very different for north India plantation operations as the environment is very different," he said.

NIPO comprises four estates in Dooars and 20 in Assam. Last year, Tata Tea had divested 17 estates in favour of workers. Subsequently, later in the year, Tata Coffee acquired six estates of Tata Tea inclusive of net current assets.

The circular said the development of an alternative business model of sustainability of plantation operations has become a key driver in the north-eastern region, which implies the development of a totally focused operation to maximise the revenue potential for the land and human capital assets. Hence, the decision to shift operations to Guwahati.

The company is in the process of reviewing alternative revenue streams for its plantations in the north-east. Among the options being explored are agro-based business, and non-agro based and tourism projects. The company has roped in Globally Managed Services as its consultant partner in the project.

The restructuring and relocation of NIPO headquarters to Guwahati would be initiated under the leadership of Dipankar Boarh.

However, Siganporia clarified, corporate and marketing headquarters would continue to be in Kolkata, which implied that there would be no loss to the state exchequer.

Siganporia said the company has set out on an agenda of change to draft a long-term solution for NIPO, which would be in the best interest of all the stakeholders.

The move to exit the plantation business followed pressure on prices owing to increase in cost of production, combined with low price realisation.