Tata Global to review plantation operations of its associates

 Tata Global Beverages (TGBL), formerly Tata Tea, will review the operations of its loss-making associates engaged in plantation activity, an official of the company said.

“Amalgamated Plantations is continuing to lose money. There is a need to take a call on both the plantation associates,” Chairman of TGBL, N Chandrasekaran, told shareholders at the company’s AGM here on Friday.

Earlier, the company separated its plantation activity from its core operations and formed two entities, Amalgamated Plantations (for north India) and Kannan Devan Plantations (for south India) to be run by employees cooperatives. Presently, TGBL holds 41% equity in Amalgamated and 28% in Kannan Devan, without getting physically involved in the plantation activity. Later, responding to reporters’ queries, Chandrasekaran said that the company would review their operations and find ways to make them profitable.

“TGBL is unlikely to enter the plantation activity again and also not going to exit from these two entities,” he said. Chandrasekaran said that although the company’s market share is 23 per cent in tea, it is making losses in other business units. “If required, the company will prune its portfolio and stay focused. We will also focus on the returns,” he said.

There is need for improvement in a lot of areas, he said adding “The main focus will be on growth and also scaling on categories wherever possible. We will not stay marginal.” “We will consider areas where scaling up operations is possible. We can’t be entering too many segments”, Chandrasekaran said.

The company will commence its operations at the Vietnam coffee plant in 2019, which involved a capital cost of Rs 350 crore. Tata Global had made an exit from the Russian business incurring a loss of Rs 29 crore, he said.