Addressing the shareholders at the company's 35th annual general meeting (AGM) in Calcutta on Monday, chairman Ratan Tata said Tata Tea's profitability, exports and operations had increased significantly. "The growth being commendable, we now plan to further our tea operations this year. Exports of tea will be another thrust area," he said.

The company has decided completely to move out of trading in coffee and focus on packet tea sales via increased brand building exercises through improved efficiencies and distribution network. Talking to reporters, vice-chairman RK Krishna Kumar said the initial capital expenditure exercise started four years ago was nearly complete and fresh investmnents will be made for business operations this year. He, however, declined to state the exact amount of investments to be made into the packet tea business. The company's flagship brand `Tata Tea' has a considerable marketshare across the north Indian heartland, whereas its other brands like Kanan Devan, Chakra and Gemini have over 65 per cent to 70 per cent shares in regional pockets of Andhra Pradesh and Tamil Nadu.

It may be noted that the over Rs 850-crore tea major had gone in for a Rs 160-crore asset upgradation programme over a four-year period, a balance of Rs 18 crore of which is left for this year. This expenditure was routed towards enhancing capacities at Tata Tea's 52 plantations in north and south India.

During the year 1997-98, the company estates produced 62.4 million kilograms of tea compared to 59.7 million kgs in 1996-97. The south Indian tea gardens produced an all-time record crop of 33.2 million kgs, which was an increase of almost 17.7 per cent over the previous year. Moreover, the company's sales increased, on account of the sales of its consumer packs in south India, by 18 per cent. The entire packet tea division bettered its earlier record by achieving a sales of more than 10 per cent over the previous year compared with the industry growth rate of 4 per cent. The Tata Tea shareholders also approved the buyback of its securities and introduction of the employees stock option scheme at the AGM. The tea major recorded a 32 per cent growth in its sales turnover which stood at Rs 718 crore in 1997-98. It also posted its highest-ever net profit of Rs 102 crore, which was a hefty 74 per cent rise over the previous year.

The company's total exports at Rs 269 crore represented an increase of 24 per cent over the previous year's achievement of Rs 216 crore. The export of black tea was much higher during 1997-98 and new markets which were opened up included Iraq, Pakistan, Russia and UK.

21 Lanka gardens on `buy list'

Tata Tea plans to buy a block of about 21 gardens in Sri Lanka for which it is holding talks with interested parties in the country. According to the company's vice-chairman RK Krishna Kumar, the deal is yet to be finalised and if it comes through this will mean an additional 6 million kg of tea from gardens in Sri Lankan.

The vice-chairman declined to divulge the name of the company which it was negotiating with. The tea major already holds 49 per cent stake in Estate Management Services Private Ltd (EMPSL) which holds 51 per cent in Watawala Plantations.