Dues: Garden buys time

Kurseong, Feb. 11: The management of Jog Maya Tea Estate has asked for seven days to clear the dues of 178 workers who have not been receiving salaries for the past three months.

The plea for extra time was made at a meeting held today between leaders of the Darjeeling Terai Dooars Plantation Labour Union, an affiliate of the Gorkha Janmukti Morcha, and subdivisional officer, block development officer and the assistant labour commissioner of Kurseong. No one from the management side was present.

The meeting was held at the BDO’s office here.

The management left the garden, located 20km from here at Ghayabari, in December after it had failed to give salaries to the workers. The total dues have now accumulated to around Rs 9 lakh.

“When I spoke to the representatives of the management, they asked for seven days to pay the wages,” said the BDO Manish Verma. The officer also informed the meeting that the 100-day work scheme would begin on February 16. He said another meeting would be held on February 18.

“If the management fails to keep its words within the stipulated time, we might form a co-operative committee to run the estate,” said Verma. He added that representatives of the workers would also be in the committee

Earlier in the day, the labourers organised a blockade on NH55 for three hours, demanding for their dues.

“The SDO has told us that the owner will clear our dues within seven days. We will wait and if the management fails to deliver on the promise, we will revive our agitation,” said Satish Chettri of the union. “However, we are happy that the 100-day work scheme will start from Monday.”

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Tata Tea to restructure US operations

KOLKATA: Tata Tea Ltd is in the process of restructuring its US operations with a view to bringing down costs substantially, a top official of the company official said on Monday.

The company is consolidating its manufacturing facilities, which would be run under a unified entity, Tata Tea Managing Director Percy Siganporia told reporters here. Tata Tea markets brands like Tetley, Goodearth and 8'o Clock Coffee in the US market.

He said that the company's strategy towards the US market is that of cost management. Tata Tea is following different strategies in the various markets of the US, Britain, Canada and India, he added.

In Canada, the strategy followed by Tata Tea is that of product innovation. In standalone operation in India, he said that the company had been able to protect the bottom line while the towline growth was followed aggressively.

India contributed to nearly 26 per cent of Tata Tea's overall revenue. He said a top executive team of Tata Tea has been relocated to the UK. "The chemistry works better when the top executive team stays at the same location.'' Siganporia would relocat e himself from Kolkata to the UK.

From PTI

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Stress on quality tea for growth

Silchar, Jan. 31: Tea Association of India president Shashank Prashad today underscored the need to produce quality tea for the industry to thrive, particularly in the CTC tea-producing Brahmaputra Valley and the Cachar region.

He was speaking at the 38th annual general meeting of the Barak Valley branch of the TAI here today.

The Inter-governmental Group on Tea, an international lobby, in its ruling in China last year, had said there should be no expansion in the tea-producing areas worldwide, particularly in the Brahmaputra Valley and Cachar region.

Against the backdrop of the ruling, Prashad said the tea plantations in the Brahmaputra Valley and the Cachar region should focus on a qualitative increase in the productivity of land and labour.

The TAI president attributed low land productivity as a root cause for sickness in the tea plantations. He urged the planters to reorient their strategies to produce quality teas.

Prashad underlined the need to weed out complexities in the procedural formalities and inordinate delay in the sanction of funds by the Centre under the Special Purpose Tea Fund (SPTF) scheme.

He thanked the Centre for amending the loan terms under the scheme by including the Cachar gardens within the ambit of loans with heavy subsidy for the rejuvenation of the old tea bushes.

From The Telegraph

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Tea exports - low hanging fruit for forex earnings

Tea exports, which are Sri Lanka’s mainstay in agricultural export topped the US$1 billion mark in 2007 thus showing the sector’s potential after government divested the plantation in 1992. These earnings were a tremendous boost to the industry that also plays a key role in employment generation and social welfare. When the global turmoil was spreading the belief was that Sri Lanka was immune due to its limited connectivity and capital account controls.

However from October, Colombo auction prices began to decline rapidly with huge quantities of tea remaining unsold due to lack of demand. This resulted in a vicious circle of debts from exporter to producer thus sending shockwaves in a industry poised for record earnings. With 60% of the production coming from smallholdings the effect on the rural economy was devastating. The average auction price at the last sale of 2008 was Rs 225/kg as against Rs 340 in the previous year thus losing nearly $1 per kilogram.

New Year brings hope
The New Year seems to have brought some hope to the industry with auction prices showing a steady improvement. The first two auctions lit up a depressed tea sector with significant price gains. The second sale of the year averaged to Rs 274 improving from the Rs 253 recorded in the first. Price gains were recorded from all elevations and the trend has been consistent. The industry should not be complacent and must continue with cautious optimism. During the tough depressed times the industry reacted well by taking certain crucial steps that paid dividends. The authorities decided to restrict private sales and ensured that the auction is stronger and quality was emphasized.

Emphasis on quality
Strict surveillance on quality must be pursued with the Tea Board along with brokers and the auction authorities to ensure poor quality teas doesn’t reach the auctions. During the peak price levels there has been a tendency for quick gains and quality has been the casualty. It is also no secret that thefts and adulteration carried out on a large scale and stealing tea in the highways of Colombo too has been reported. A few years ago the Tea Board was able to initiate legal action and expose such crimes. Since such operators have a tendency to re-emerge every effort must be made to enforce the law to protect the good name of Ceylon Tea. Since independence the industry has weathered many storms to become stronger. During the insurrection periods of 1971 and 1989 many tea industry personnel sacrificed their lives, some factories were burnt and the employees and their families lived in fear. Even though the land reform legislation had good intentions politicization saw great losses to the industry and the economy along with mass exodus of expertise.

New look industry
Price fluctuations in commodities is nothing new and perhaps the tea sector should emerge stronger from the present crisis. Vast improvement made during the last two decades in quality enhancement (ISO, HACCP) improved living conditions for plantations workers, surveillance by the ethical tea sourcing partnership and continuing investments by the companies have given strength and a new look to the industry. Tea smallholders have become a major force with high productivity and lower cost of production.

Minimize negative factors
Declining reserves and the persistent macro economic deficiencies will pose a major problem to the Sri Lanka economy in 2009. These could worsen with a decline in worker remittances. In this situation assisting the export sector is a priority and a necessity for the government, and tea has the potential to enhance foreign exchange earnings than any other source. As agitated by exporters, a competitive exchange rate is more than a necessity in the background of devaluations carried out by our competitors during the last six months - Kenya (19.8%), India (12.1) Vietnam (3.8%) and Indonesia (18.2%). Apart from these, negative factors in taxation in ESC, proposal for a Nation Building levy and the export CESS needs to be reviewed. The tea cess was raised during the peak market conditions and an adjustment is opportune to suit the present needs and increase competitiveness.

Recovery in sight
The price levels of the last two years are unlikely to be repeated due to a decline in petroleum prices and next to CIS our major buyers are from such countries where there are credit limitations due to banking problems. On the positive side increasing consumption in India would lead to curtailment of exports and the rise in black tea consumption. China is another opportunity. Kenya, Sri Lanka’s main competitor, experienced a significant production decline in 2008 as against Sri Lanka’s increase. Demand for black tea could rise due to export shortfalls.Most importantly unlike in most other beverages the share of tea in the disposable income of consumers is not significant to anticipate a cut down. These factors do indicate that tea exports could stage a recovery in 2009.

From The Sunday Times

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Tata Tea Q3 Group Net Profit Drops, Absent Of Year-Ago Gain

Friday, Tata Tea Ltd., the largest tea manufacturing company in India, reported a lower consolidated net profit for the third-quarter in the absence of a year-ago gain from the stock sale. However, on standalone basis, the company reported higher net profit for the quarter.

Consolidated Results

The Kolkata-based company posted third-quarter consolidated net profit of Rs.396.12 crore or Rs.64.06 per share, 69% lower than Rs.1,292.22 crore or Rs.208.96 per share in the third-quarter of 2007, which included a one-time gain of Rs.1,604.74 crore on sale of its stake in Energy Brands Inc.

The company said the previous period's figures have been rearranged to the extent necessary, to conform to the current period's figures. Therefore, the comparative figures have been restated to exclude North India Plantation Division and certain related adjustments effected to make them comparable with the current quarter.

The company said its recent quarter results included a one-time foreign exchange gain of Rs.580.41 crore on restatement of foreign currency deposits/loans, compared with Rs.38.25 crore in the prior-year quarter.

The company's quarterly consolidated revenue from operations increased 15% to Rs.1,300.86 crore from Rs.1,135.56 crore in the year-ago quarter, while other operating income totaled to Rs.5.93 crore, compared with Rs.8.07 crore in the prior year quarter.

During the quarter, revenue from Tea segment rose 12% to Rs.1,013.01 crore from Rs.902.20 core in the corresponding quarter last year, while revenue from Coffee & Other Produce amounted to Rs.285.59 crore, up 20% from Rs.238.94 crore in the year-ago quarter. Revenue from others were Rs.8.19 crore, compared with Rs.2.49 crores in the previous year quarter.

For the first nine months, Tata Tea's consolidated net profit fell 51% to Rs.689.57 crore from Rs.1,417.46 crore in the corresponding period last year. Total revenue grew 13% to Rs.3,647.99 crore from Rs.3,215.51 crore for the comparable period a year-ago.

Standalone Results

The company's third-quarter standalone net profit grew 10% to Rs.48.30 crore from Rs.43.78 crore in the third-quarter of 2007. Total revenue, including other operating income, increased 22% to Rs.382.75 crore from Rs.314.08 crore in the year-ago quarter.

For the Apr-Dec 2008 period, Tata Tea's standalone net profit rose 6% to Rs.129.80 crore from Rs.121.91 crore for the comparable period last year. Total revenue grew 16% to Rs.1,022.04 crore from Rs.878.41 crore for the comparable period a year-ago.

The company said its board has decided to relocate Managing Director, P.T. Singanporia to London, However, he will continue to be the company's Managing Director and will also be responsible for global manufacturing operations as well as buying and blending, supply chain and related activities for some regions.

At the BSE, Tata Tea closed Friday's trading at Rs.607.10, down by Rs.15.95 or 2.56% on a volume of around 49K shares.

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Mixed response to Tea

Tea met with mixed response in the sale held here on January 8 and 9. A total of over 14.68 lakh kg of tea were offered in the sale.

In the Orthodox Leaf market whole-leaf grades met with fair demand and sold at irregularly lower levels by a rupee to Rs two. The secondaries and fannings were absorbed at barely steady levels.

Selective demand was witnessed on the range of teas on offer in the CTC leaf market due to non-movement of teas to their destinations because of the All India Trucker strike.

Select brighter liquoring teas fetched dearer prices on competition while the others were fully firm. The better medium and medium sorts were irregular and lower by up to a rupee.

However, the plainer teas met with good demand and sold at firm to occasionally dearer levels, especially the cleaner and blacker varieties.

Select flavoury primary dusts met with good demand and sold at premium levels while the others were irregular and lower in the orthodox dust market. Leaf secondaries were irregularly lower by up to Rs two, while the powdery residuals were absorbed at last levels.

Good demand was witnessed on the brighter liquoring teas which were absorbed at firm to dearer rates in the CTC dust market.

From PTI

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Tea Board will allow only cash-and-carry settlements from now

Cash-and-carry settlements have been introduced at all auction centres in southern India quite some time ago, but buyers and auctioneers in the east have resisted it so far

Kolkata: The Tea Board of India has said it will only allow cash-and-carry settlements of auctions, after auctioneer Carritt Moran and Co. Pvt. Ltd defaulted on payments to tea producers.

The board said in its 22 January order that auctioneers should release tea from warehouses only after buyers pay. This will be effective from the next auction—sale 5—scheduled next week at Kolkata, Guwahati and Siliguri.

“The move is aimed at discouraging brokers from giving cash credit to buyers,” said Roshni Sen, deputy chairman of the board. “Our aim eventually is to stamp out the practice of lending to buyers and producers, for which auctioneers such as Carritt are suffering.”

The 131-year-old Carritt Moran, the world’s second largest tea auctioneer, went belly up after failing to pay producers and was found to have diverted money paid to it by buyers to service its own debts.

The board will appoint a settlement banker so that auctioneers don’t settle trades on their own. “Four private banks have already made presentations, and we expect to appoint a settlement banker within a month or so,” said Sen.

India produces around 950 million kg of tea a year, half of which is auctioned.
Cash-and-carry settlements have been introduced at all auction centres in southern India quite some time ago, but buyers and auctioneers in the east have resisted it so far.

“The Tea Board has been contemplating the introduction of cash-and-carry settlement for quite some time... The fall of Carritt has given (it) the strength to push through systemic reforms,” Sen said.

Buyers currently have to pay within 14 days—called prompt period. Though this is not being reduced immediately, the National Stock Exchange (NSE) has suggested that it should be cut to three days. Sen said the board it still considering NSE’s suggestions. However, brokers are not permitted to extend credit to buyers beyond the prompt period.

Some buyers are opposing cash-and-carry because they fear for their survival without credit from auctioneers, said Rabindra Nath De, director of Star Tea Co. Pvt. Ltd. “But the Tea Board doesn’t seem to be in a mood to budge.”

McLeod Russel India Ltd, the world’s biggest tea plantation company, is happy with the move, however. The auction system will be more foolproof, said Aditya Khaitan, managing director of McLeod Russel.

Author: Aveek Datta
From: LiveMint

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