Tata Tea to set up a joint venture with Russia
The largest tea manufacturing company in India is planning to set up a joint venture company in Russia to cater to the burgeoning market there, reports Jaidev Majumdar.business Updated: Aug 10, 2007 21:08 IST
Tata Tea Ltd is planning to set up a joint venture company in Russia to cater to the burgeoning market. The company is also mulling similar ventures in neighbouring countries like Ukraine and Kazakhstan, besides enhancing its presence in the key US market.
Tata Tea, which recently edged out Hindustan Unilever as the largest tea company in India, is planning a big push owing to Russian markets’ growing economic prosperity and an affinity towards European living standards. Besides tea, the company also plans to make inroads into the Russian beverages market by expanding its product portfolio.
Speaking to reporters after the company’s 44th annual general meeting, Vice Chairman RK Krishna Kumar said the company is in talks with several potential joint venture partners in Russia and a new entity will be formed by the end of the current fiscal. “We are eyeing a big partner in Russia but there may be some smaller companies, too, which will partner us in the venture,” Kumar said. However, he did not specify how much Tata Tea will invest in the venture.
Tata Tea has been expanding its overseas presence with buyouts over the last couple of years. The company recently acquired herbal and fruit tea brands Glaceau in the US and eastern Europe, and recently picked up a 70 per cent stake in a joint venture in China.
Asked whether Tata Tea is eyeing Cadbury Schweppes Plc’s North American beverages unit and would make a $2 billion offer for US-based AriZona Beverages, Kumar said the report is highly speculative. “We are looking at the beverages market in the US, since Tetley already has a footprint in Europe and Canada,” he said.
The company is also evaluating a stock split. Group Chairman Ratan Tata told shareholders at the annual general meeting that shares of the company have underperformed in the market. “We may consider a stock split at an appropriate time,” he said.
First Published: Aug 10, 2007 19:45 IST