Tata Group to consolidate consumer goods business in corporate structuring

INDIA – Tata Group is looking to consolidate its consumer products businesses, which will be housed under one roof in a strategy the company says will help simplify corporate structure and consolidate operations in similar lines of businesses.

ET Retail has revealed that the group will transfer the branded salt, pulses, masalas and ready-to-eat snacks portfolio operated under different Tata companies to Tata Global Beverages.

According to people familiar with the matter identified by ET Retail, the proposal will see restructuring of Tata Global Beverages, reflecting the changing profile of its portfolio.

In fiscal 2019, the branded consumer products of Tata Chemicals; Tata Salt and Tata Sampann contributed 16% and 19% to the company’s total revenues of Rs 11,296 crore (US$1.6 billion) and operating profit of Rs 1,643 crore (US$233.44 million), respectively.

However, as part of business realignment, Tata Chemicals will be retaining the manufacturing operations of salt since it is manufactured from the same complex that also makes chemicals like soda ash.

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ET Retail reported that the company also plans to merge Tata Coffee with Tata Global, best known as the owner of Tetley tea.

Tata Global is counting on health to drive food and beverages segment growth, in line with changing tastes and preferences among consumers.

The company offers green tea with its Tetley brand, and unpolished pulses and low sodium salt from Tata Chemicals.

To benefit from the strong growth potential presented by these segments, it ventured into premium segments such as single-serve pods segment, functional water, green and specialty teas.

Tata Global recently agreed to acquire the branded tea business of Dhunseri Tea & Industries Ltd for US$14.4 million.

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The transaction included Dhunseri’s brands ‘Lal Ghora’ and ‘Kala Ghora’ in an all-cash deal.

Dhunseri Tea operates in the branded tea business under the Lalghoda and Kalaghoda brands, which are some of the leading local brands in Rajasthan.

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