Tata Tea recorded a 74 per cent increase in net profit at Rs 102.16 crore for 1997-98 from Rs 58.65 crore the previous year. The board has recommended a 101 per cent dividend for the period under review.
The company's turnover was up 25.6 per cent at Rs 878.85 crore from Rs 699.44 crore. Though expenditure rose 20 per cent at Rs 713.27 crore against Rs 592.33 crore in 1996-97, income was higher by 23.49 per cent at Rs 895.97 crore against Rs 717.44 crore.
Tata Tea is looking at major acquisitions as part of its growth strategy. The company is eyeing gardens in north India, Uganda and Sri Lanka, as possible targets. It is contemplating diversifying into related areas as part of its growth strategy.
"We are looking at areas of our core competence, and at mobilising our strong marketing network,'' top company officials said. The company is looking at food and consumer products the officials added.
Tata Tea is also planning to introduce several new tea brands. "Two brands are in the pipeline," the officials added. Compared with 1996-97, interest outgo during the year under review was lower at Rs 23.88 crore while the provision towards depreciation was Rs 14.66 crore.
While the company's good results can be attributed to the price increase, its profits have increased largely due to improved efficiencies.
"Fifty-five per cent of the incremental profit of around Rs 66 crore have come from improved efficiencies. Our yields per hectare has gone, and our turnaround from our south Indian operations has been remarkable," senior officials of the company said. " The price increase has contributed 45 per cent of our profits," they added.
The company's exports during the year stood at Rs 269 crore. "The exports of the company's main line products recorded a substantial increase of 92 per cent over the previous year while export of traded coffee remained at the same level as last year," a release said.
Tata Tea expects to clock a good performance in 1998-99 "considering the price trends for the last two months of the current financial year". The domestic tea industry has been buoyant after almost a gap of four years.
Since the last two years, the company has concentrated on the packet tea segment. Of its total production of 61 million kg, packet tea was to the tune of 45 million kg while that of instant tea was 4.7 million kg. The company plans to achieve international size by virtue of having operations in all the three major tea producing belts in the world.
The company has already acquired tea plantations in Sri Lanka and plans are afoot to take on lease tea plantations in Uganda, Zambia, Tanzania and Kenya.
