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Strategy tweak
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Calcutta, June 23: Calcutta-based Diana Tea Company Ltd (DTCL) will exit its packed tea business by this year-end and focus on plantations. Earnings loss and inability to compete with dominant players forced the Aares Group company to opt for an exit route.
The company, which has four tea gardens in the Dooars, had also sold its Ambari Tea Estate in Jalpaiguri, Bengal, in November last year after the garden failed to reap profits. The formalities are yet to be completed.
“Packed tea is a risky business. It is highly unremunerative. We are having to compete with giants such as Tata Global Beverages and Unilever in the segment. We have our focus and expertise in plantations. We, thus, intend to reduce our labels and get out of trading by this year itself,” Sandeep Singhania, managing director of DTCL, said on the sidelines of the company’s annual general meeting.
The company clocked revenues worth Rs 62 crore in January-December 2010, of which packed tea and trading business contributed around Rs 7 crore. The contribution came down to Rs 3 crore in 2011, when revenues stood at Rs 51 crore. DTCL expects a 10-15 per cent growth in turnover this year.
After the selloff of its Jalpaiguri estate, DTCL’s total production came down to 4 million kg from 5 million kg.
“We are also open to garden acquisitions provided it suits our synergies. We are sitting on cash and the garden should have at least a million kg production,” Singhania said.
Tata Global Beverages
Tata Global Beverages (TGBL) has inducted Cyrus P. Mistry, deputy chairman of Tata Sons, as director. Harish Bhat has been appointed CEO and managing director of TGBL, with effect from July 1, taking over from Percy Siganporia who will retire on June 30.
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