Khaitan: In foreign land

Calcutta, March. 1: Williamson Magor, one of the leading tea companies in the country, plans to enter Russia through a joint venture.

The company is in talks with a number of firms, including the Golden Elephant Company — the largest in Russia. Others include Orimi Trade, Grand Tea House, May Tea Company and Tea World Company.

“We are in discussions with three to four companies,” a company spokesperson said.

A Williamson Magor team will soon visit Russia and officials from Golden Elephant Company are expected in May.

Initially, a tea-packaging unit would be set up with the Russian partner, sources said. Williamson Magor will send tea to the unit. However, the company refused to reveal details of the joint venture.

Over the past few years, there has been a stable growth in bulk tea imports to Russia. After the tariffs for the import of bulk and packed tea were differentiated, it became more profitable to carry out the secondary processing and packing of bulk tea in Russia.

The Khaitans have three packet tea brands in its fold — Premium Gold, Jaago and Tez. The group produces nearly 23 million kgs of tea. The company exports tea to the UK, Europe and countries in West Asia.

The possible business deal between the Magors and one of the Russian companies is a direct fallout of the visit of the members of the Indian Tea Association to Russia. It was decided at the meeting with the Russian tea traders that Indian companies will look into possible joint ventures with their Russian counterparts.

Russian tea drinkers have a distinct preference for black tea, which comprises 95 per cent of the brew consumed. The rest is green variety. Russia has traditionally been an orthodox market. However, it shifted to CTC on price considerations, with a preference for the medium-sized variety. But CTC demand has been steadily falling and orthodox, specially the brew sourced from Sri Lanka, is currently the preferred variety.