Walking on water?

At the company’s recent Annual General Meeting (AGM) of Tata Tea in Kolkata, Chairman Ratan Tata said there was a possibility of changing the name of the company. With good reason. Today Tata Tea, apart from tea, has a presence in coffee and water as well. The Chairman could possibly consider adding ‘International’ to the company name, too. After all, Tata Tea has been busy eyeing overseas markets, right from the US to Russia to China. After the AGM, R.K.

Krishna Kumar, Vice Chairman, Tata Tea, told the media that there was a plan to set up a joint venture in Russia. He added that talks were on with potential partners and a new entity will be formed by the end of the current fiscal. A few months ago, Tata Tea got into a joint venture in China, which resulted in the creation of Zhejiang Tea Import and Export Company Limited (ZTIE). The company, which will be set up in the economic development zone of Zhejiang, will manufacture and market green tea, cold and hot water soluble instant tea and liquid tea concentrates, among other products.

Of late, there has been talk of the company eyeing the US markets. One of the names reported in the media was that of AriZona Beverages, a New Yorkheadquartered marketer of iced tea and energy drinks. Tata Tea has rubbished these reports, but a presence in the US appears only a matter of time. “The US is a hothouse for the development of conceptual knowledge for the BRIC countries. If there is an opportunity that comes our way, we will be open to it,” says Percy Siganporia, Managing Director, Tata Tea.

“Over the next 2-3 years, we expect to be a significant player in branded tea and develop a strong presence in coffee and water (he referred to the global market and not just the US),” adds Siganporia. It may be recalled that Tata Tea acquired a 30 per cent stake in US’ Energy Brands Inc. for $677 million last year. Following Energy Brands’ decision to sell out to Coca-Cola, Tata Tea, too, will divest its holdings. Coca-Cola has agreed to buy Tata Tea’s holding at $1.2 billion, which results in a profit of $523 million. There could be some action on the domestic front, too.

Recently Tata Tea announced it would buy a 25.7 per cent stake in Mount Everest Mineral Water, the owners of the Himalaya brand of mineral water. Will the company use this buyout to launch new variants in the market, like flavoured water for instance? Says Siganporia cryptically: “There is a possibility but it is too early to comment.” That name change may need to happen sooner than later.