Cup that cheers

Calcutta, May 16: Tata Tea is on the prowl again and this time the company is heading towards Morocco in north Africa.

Tata Tea is one of the 25 companies that have expressed interest in buying the state-owned Societe Marocaine du the et du Sucre (Moroccan Tea and Sugar Company), which is popularly known as Somathes.

Industry sources said out of these 25 companies, 19 put in their expressions of interest directly, while six others, including Tata Tea, expressed interest through their bank advisers.

Morocco is one of the world?s largest importers of good quality green tea and its purchase is set to increase from 35,200 tonnes in 2000 to 57,100 tonnes in 2010. Morocco imported 45,669 tonnes in 2004.

The minimum bidding price for Somathes has been set at $51.17 million or 440 million Moroccan dirhams. The tender, issued last month, would close on July 16, 2006. There are seven Chinese companies amongst the bidders.

According to the last compiled global tea data, China had exported 49,540 tonnes of tea to Morocco and was one of the largest exclusive suppliers to Somathes.

?This explains the involvement of seven Chinese companies in the bidding. Such an acquisition could be a stepping stone for Tata Tea to enter the market for Chinese green tea, especially since Somathes has the expertise to handle Chinese green tea exclusively,? industry experts said.

Tata Tea officials were out of the country and did not respond to queries today.

Somathes controls 30 per cent of the Moroccan market and imports green tea in bulk from China. The company conditions and stores the imported tea and distributes them through seven agencies established in large cities.

The company has posted a turnover of 290.5 million Moroccan dirhams in 2004.

The Moroccan government is looking for companies with an expertise in the tea business and production and distribution of agro-produce with an annual sales turnover of 100 million Moroccan dirhams.

In February, Tata Tea vice- chairman Krishna Kumar had indicated that Tata Tea was looking at business opportunities in China for tea beverages. The cost of acquisition in China would be over and above the money set aside for buyouts elsewhere.

The tea beverage segment, especially health drinks, is a completely new one for the company, Kumar had pointed out earlier.

In order to make inroads into the Czech Republic and the eastern European markets, Tata Tea (GB) Limited, UK, the subsidiary of Tata Tea Limited, had signed a definitive agreement to acquire the assets of JEMCA, part of the Czech food processing company Alima Znac kova Potravina, in early May.

JEMCA has a 26.6 per cent share of the tea market in the Czech Republic. The Tetley Group funded the deal.