Tata Global Beverages Ltd may restructure Russian operations, while its China joint venture is yet to “stabilise”, the company Chairman, Cyrus Mistry, said here on Friday.
International operations account for a majority of the company’s revenues. Tata Global owns brands like Tata Tea, Tetley, Eight O Clock, Himalayan and Good Earth.
According to Mistry, in the case of the Chinese joint-venture, Zhejiang Tata Tea Extraction Company, there has been some improvement with stabilisation of production but technology stabilisation is yet to be achieved.
Mistry was responding to shareholders’ queries during the 52{+n}{+d} AGM. According to Tata Global’s annual report, the Russian operations showed an improved operating performance (in FY15), but currency devaluation resulted in a decrease in reported numbers. Non-cash goodwill impairment losses, which arose due to adverse macro economic environment with resultant adverse impact on interest and discounting rates, were also accounted for.
Non-cash goodwill impairment to the tune of ₹95 crore (across Russia and China) were accounted for by the company.
On coffee chain Tata Starbucks Pvt Ltd, Mistry said the venture will break-even only after it reaches a certain scale. Currently, Tata Starbucks has 72 stores in the country.
Capital expenditure Tata Global has earmarked a capital expenditure ₹150 crore for the current financial year. Focus will be on its four “power brands”— Tetley, Tata Tea, Eight O Clock (EOC) Coffee and Himalayan
The company also plans to launch its UK-based tea brand, Tetley Super Green Tea, in India, sometime soon.
Initially, Mistry had said that he was hopeful of Tetley Super Green Tea being launched “next year”, but later clarified that the launch would happen soon.
Investments in Bengal Meanwhile, Mistry pointed out that the Tata Group was not averse to investing in Bengal. While Tata Global had no immediate plans to invest here, other group companies, he maintained, were already investing in the State. “There is nothing in any way that stops them (other Tata Group companies) from looking at Bengal,” he said in response to shareholders’ queries.