Financial Daily from THE HINDU group of publications
Saturday, Feb 14, 2004
Corporate - Outlook
Tata Tea mulling options to enter Chinese market
Kolkata , Feb. 13
TATA Tea Ltd along with Tetley has decided to enter the Chinese tea market and is currently studying all the available options.
According to industry sources, the company officials have been visiting China for quite some time now. After conducting several surveys they have found good potential in that market.
China is predominantly a green-tea market. Currently it produces more than 700 million kg (mkg) of orthodox tea, exports approximately 250 mkg and consumes around 450 mkg. CTCs are not at all popular in China. At present, India hardly exports any tea to China.
Regarding the modus operandi of the proposed Chinese operations, sources said that Tata Tea might join hands with a local partner and set up a joint venture company. The second option could be that the company will start marketing its product first and then look at other opportunities.
The official spokesperson of Tata Tea confirmed that the company has taken an in-principle decision to enter the Chinese market but ruled out the possibility of joint venture with a local player.
"As a part of its drive for rapid growth in new geographical areas, Tata Tea along with Tetley is looking at several geographical areas in South East Asia, including China. However, plans are at very early stages for these markets and we have neither entered into any joint venture nor contemplating entering into one at this point of time", he said.
Till this official communication comes from Tata Tea, the management is desperately trying to keep its China plans under wraps. Sources said that that is probably to ward off competition from other tea companies.
Meanwhile, the Tata group Chairman, Mr Ratan Tata, in an interaction with the media at Beijing said that his organisation is keen to invest in several sectors such as steel, IT, automobile, telecom and hospital in that country.
If Tata Tea does not join hands with a local partner, it may set up its own subsidiary and start marketing its product. "It may probably start with the Tetley brand, which itself has a global presence," the sources added.
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