Tea plantation companies bring focus back to quality to improve margins

Quality has been the major impediment for the plantation companies to keep pace with rising input costs vis-a-vis price realisations

After witnessing a dent in profitability owing to their ‘volume play’, tea companies are reverting to quality, which they think will help improve margins and make them sustainable.

Quality has not been one of the thrust areas for plantation companies, which have been trying to keep pace with rising input costs vis-a-vis price realisations. 

Over the past five-six years, while input costs rose by around 15 per cent, prices improved 5-7 per cent only.

For instance, during 2013-14, Warren Tea made a net profit of Rs 20.24 crore, while during 2018-19, the company registered a net loss of Rs 15.92