Tata Global reorganizing to become diversified consumer products firm

INDIA – Tata Global Beverages Limited (TGBL) is looking to restructure its business with a goal of becoming a complete diversified consumer product company.

According to an ET Retail report, the beverages-focused group may be renamed as Tata Consumer Products following restructuring, and this may see its turnover rise 25%.

The consolidation of the TGBL may involve reducing the number of subsidiaries, exiting small markets and businesses in future and focussing more on the domestic market and select overseas ones.

The company is also eying more product segments like spices and detergents in order to increase shareholder value.

“We need to focus in India and select overseas markets,” said chairman of the group, N Chandrasekaran.

“We are looking at each part of the country more carefully and a lot of work has happened in this regard.

“We want to project TGBL not as a food product outfit but as a consumer product company. In the FMCG segment, we need a large portfolio.

“We cannot just be a single tea player and depend on it to attain scale. The company has to gain scale through a wide range of products.”

Consolidating consumer business

Last month, the firm said it is consolidating its consumer products businesses to help simplify corporate structure and consolidate operations in similar lines of businesses.

The group merged consumer businesses of Tata Chemicals with TGBL and according to Chandrasekaran, completion of the proposed merger is expected to be complete in the next 12-18 months.

Following the transfer, TGBL will have branded edible salt, pulses and spices in its product portfolio.

He however noted that Tata Coffee will not be merged with TGBL in the meantime while Tata Cha, the out-of-home beverage space of the group may consider expanding outside Bengaluru.

He said that the company’s branded tea performance has been very good, and they may evaluate moving up the value-added products by launching new products.

“We need to move up the value chain and enter high-value segments… build a high-class, premium consumer products company by leveraging the large consumer base in India.

“That is the goal that we are working towards,” he said.

Tata Global has already exited China and Russia markets after selling its Russian coffee brand Grand that it had fully acquired in 2012.

It also sold off its 90% stake in Zheijiang Tata Tea Extraction Co to its minority joint venture partner Zhejiang Tea Group.

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