To take up issue with Centre
NEW DELHI, April 9: Union Minister of State for Food Processing Industries Rameswar Teli on Friday appealed to Tata Group chairman Ratan Tata not to shift the offices of Tata Tea out of Assam to Kolkata.
Teli said he has come to know that the tea giant has ordered shifting of the offices of the company by April 30 to Kolkata. “We have come to know that Tata Tea has issued a formal communication to all its employees to cooperate in shifting Tata Tea offices from Assam to Kolkata by April 30. They have 21 gardens in Assam and those are operating smoothly,” he said.
“The Government of Assam has extended lots of facilities and has ensured that they do not come under any kind of pressure,” Teli added.
“We have paid Rs 1 crore to each garden for welfare of the workers, besides other measures. This was done to ensure that the owners of the gardens are able to manage their affairs smoothly,” he said.
“A lot of people are involved with the activities of the company, both directly and indirectly, who will be affected by the shifting. That is why I will urge the company not to move out of Assam,” the minister added.
Out of its 25 tea gardens, 21 are in Assam and four are outside the state.
“I have requested the Chief Executive Officer (CEO) of the company not to go ahead with its plans and if they have any problem, we will try to resolve it. But they should not move out of Assam,” said the minister, who promised to take up the issue with the Central government as well.
“I am also appealing to Ratan Tata to drop the plan to shift the offices of Tata Tea out of Assam,” said Teli.
The Tata Group is planning to restructure the loss-making tea plantation operations located in Assam and West Bengal.
Sources said that three consecutive years of adverse results made it imperative that goals and deliverables get reprioritised and the company aims to dedicate its focus based on the emerging realities. The company has been seriously looking at all options of financial and operational restructuring.
The business is being carried out by the demerged estate business of Tata Global Beverages. The Tata Group, which, on an aggregate basis, controls majority 65 per cent of Amalgamated Plantations Private Limited are now open to the financial and operational restructuring of the tea estates in Assam and West Bengal.
Tata Tea’s demerged plantation business in Assam and West Bengal is in stress, mainly due to the inherent weakness of corporatised plantations in the face of a growing breed of low-cost small growers.
Greater sourcing of leaves from small tea growers for “critical input material supply” has now been identified by the management as one of the other focus areas for Amalgamated Plantations, in which Tata Global Beverages holds a little over 41 per cent stake.
Sources said that the purchase leaf business is akin to trading operations. Overall, it is fairly profitable and allows a company to spread its overhead costs across a higher volume base, by filling up under-utilisations of own capacities.
“The world over, small tea growers and bought-leaf factories are successful as low-cost producers. To compete with these mainly proprietary operators and remain profitable, we as corporates have to consistently recalibrate our operating strategies and cost bases,” a company source said.