Calcutta, Aug. 30: Godrej has decided to enter the tea business through its group company Transelektra Domestic Products Limited.
Godrej has sent an application to the Calcutta Tea Traders Association (CTTA), seeking admission as a buyer of tea at the Calcutta auctions. The company has made similar applications to Guwahati and Siliguri auctions.
Sources said last week Transelektra Ltd has acquired space at Nilhat House on R. N. Mukherjee Road which houses country’s largest auctioneer, J. Thomas & Company. The company has also opened an office at Guwahati.
Erstwhile Reckitt Benckiser managing director Pranab Barua has joined the company as head of the tea business. Barua has vast experience in the fast moving consumer goods sector and also worked with Hindustan Lever Limited and Brooke Bond Limited before joining Reckitt Benckiser.
Subrata Roy, a well-known name in the tea industry, has also joined the company. Before this, he used to head the packet tea division of Duncans Industries Limited. Roy has also worked with Harrison Malayalam, an RPG group company and Global Exports.
Godrej Sara Lee Ltd was incorporated in 1987 as Transelektra Domestic Products Limited. In 1994, Godrej Soaps paid Rs 12 crore to pocket the Rs 67-crore Transelektra (makers of Goodknight mosquito repellent). The Godrej group acquired a 75 per cent stake in the company, which was later raised to 97.5 per cent. In 1995, Sara Lee acquired a 40 per cent stake in the company from the Godrej group.
“The company is interested in lifting teas from north India only. The company has not yet divulged whether it will market tea in packets or will export it. It has been learnt that the company will use its strong distribution channels to market teas in western India. They may also use their export base to market the tea globally,” industry officials said.
Godrej’s entry into the tea business has brought cheer in industry circles.
“Entry of more buyers at the tea auctions will have positive impact on tea prices. Depressed prices are dampening the mood of the industry,” the tea traders said.
Prices of CTC tea have gone down by Rs 15 per kg in the current year. CTC tea at the Calcutta auctions is currently ruling at Rs 63.49 per kg as against Rs 78.95 per kg in the previous year.
Darjeeling tea has been worst hit with prices going down by Rs 28 per kg in the current season. The prices of Darjeeling tea have gone down from Rs 171.51 per kg in the last year to Rs 143.49 per kg. Orthodox tea prices have been maintained at last year’s level.
The industry attributes the depressed prices to the oversupply situation in the global markets and lower exports of Indian tea to Russia. Russian exports have gone down by 14 million kgs in the period January—July, compared with the previous year.