The Telegraph
Since 1st March, 1999
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Harrison Malayalam to send 1,500 tea workers packing

Calcutta, May 18: Harrison Malayalam (HML), an RPG enterprise, will lay off 1,500 tea garden workers to cope with an acute cash squeeze hobbling the company.

The firm, with large interests in tea, engineering and biotechnology, recently spun off its rubber business and merged with Ceat, a tyre maker in the RPG fold.

HML chairman Sanjiv Goenka told The Telegraph that the job cuts, which are expected to save the company Rs 3 crore to Rs 4 crore every year in wage bills, has been forced by the slump in tea prices over the past three to four years. “Our main focus is now to reduce cost of production so that our tea becomes competitive. We have, therefore, decided to reduce the staff-strength from 17,000 to 15,500 in the current financial year.”

Workers in 10 tea estates — nine in Kerala and one in Tamil Nadu — were not paid regularly by the company, which suffered a loss of Rs 15.90 crore in 2001-02. “There were some irregularities in paying salaries. But things are under control now,” Goenka added.

Prices of South Indian tea have remained under pressure —below the cost of production at most times — as wages have shot up and buyers have been willing to pay less.

The average price at the Cochin, Coimbatore and Conoor auctions has hovered between Rs 43 and Rs 45 per kg. However, HML has fetched close to Rs 54 per kg. Surianalle continued to command the highest price at the Cochin auction.

The firm exports tea to Russia, United Arab Emirates, United Kingdom, Germany and Kenya. The shipments, which stood at 1,496 tonnes in 2001-02, are channelled through Sentinel Tea & Exports, a wholly owned arm.

Mountain Mist and Spencers are two brands in the stable, and a new one will be launched once finances improve. Its tea is sold to Foodworld, the RPG Group’s retail chain. More brands will be peddled through these stores soon.

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