INDIA – Tata Global Beverages (TGBL), the Indian non-alcoholic beverages company plans to set up a new tea packaging unit worth US$14.01 million in Gopalpur Industrial Park, Odisha, India, reports ET Retail.

The company has entered into a letter of Intent (LOI) with Tata Steel Special Economic Zone Ltd, a wholly-owned subsidiary of Tata Steel Ltd which is charged to set up the new tea packaging unit.

The LOI was exchanged during the Make in Odisha Conclave business event in Bhubaneshwar, Odisha.

Expected to be operational by 2020 following statutory and regulatory clearances, the facility is expected to have a capacity of 36 million kilogrammes per year.

The company said the planned unit will be used for the operation of manufacturing and storage of tea and will also be used as warehouse of all products of the company, including its subsidiaries, associates and joint-venture companies.

The facility will be operated by a third-party operator, nominated by TGBL and on full capacity, the plant will generate an employment for approximately 650 persons.

Having entered the Indian cafe market in 2012 through a 50/50 JV with Starbucks Coffee Company, TGBL engages in manufacturing of coffee and tea and is a subsidiary of the Tata Group.

Through a partnership with a sparkling waters manufacturer, Talking Rain Beverage Company, Tata Beverages expanded into the natural mineral water market in August last year.

The deal was also expected to increase the reach of Tata Global Beverages Himalayan Natural Mineral Water brand in the US.

Tata Global Beverages with brands like Tata Tea and Tetley posted a 19.07% year-on-year rise in consolidated group net profit at US$25.76 million in the quarter ended September.

This was attributed to higher tea prices and benefit out of a tax credit on account of Starbucks.

According to the company, it has market share of 20-21% in the tea category in value terms, and 22-23% in terms of volume.

India accounts for 45% of the revenue at present, which is expected to grow as the company is looking at other areas of expansion in the market, said Tata Global Beverages chief financial officer L Krishnakumar.