The support promised to the tea industry from the much-publicised India Brand Equity Fund (IBEF) of the finance industry remains a non-starter. The rates of interest and repayment conditions for loans from the fund are still undecided as the tea industry is unhappy over the terms and conditions of the fund, which is meant for exclusive promotion of Indian brands abroad.Project India Blend, a company formed by five tea majors, was the first company to be shortlisted by the IBEF for procuring funds for promoting the "Nargis" brand. IBEF is said to have a starting corpus of Rs 65 crore of which Rs 50 crore is contributed by the central government.
Tea industry officials had this to say: "The terms and conditions of the loans are not lenient as a result of which the Tea Board's loan earmarked for brand equity turns out to be cheaper".
Negotiations are, however, on between the union commerce ministry and industry officials on this issue. The Nargis brand, conceived as a very Indian product, is presentlybeing marketed in CIS countries. Just completing two years since it was first conceived in January 1996, the brand at present encompasses a whole gamut of teas.
Starting off with the export of orthodox Assams, today the range includes CTC tea bags, Darjeelings in caddies and south Indian CTCs. Project India Blend (PIB) is contemplating its shipment of south Indian orthodox teas, which, in a way, would complete the entire circle.
Presently exporting with the marketing network of Melgate in CIS, PIB may also go in for a joint venture with the marketing company if import duties in CIS countries do not decrease. The CIS countries imposed a 20 per cent import duty on tea packs entering their regions.
"All depends on the decision of Alpha Eco, the multi-service company which plans to resume six of their packaging units which are now closed", said an official. The Russian company was believed to be packaging almost 70-odd million kg until recently. The Indian brand Nargis caters to the upper end of the exportmarket and is in competition with other existing brands like Dilmah, Twinings or Pickwick. But it is to ensure quality rather than competition that PIB is interested in, said the official. The target is to export 5 million kg of Nargis brand by 2000. By March 1998, it is expected to export 2.5 million kg of the brand.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
