Tata Coffee Too To Gain From Tata Tea-Tetley Merger

Tata Coffee will also reap the benefits of operational integration of Tetley and Tata Tea. R K Krishnakumar, vice-chairman of Tata Tea, said, "We may explore the possibility of using the Tetley market for Tata Coffee's exports".

The Asian Coffee division which was merged with Coffee Lands Ltd to create Tata Coffee (formerly known as Consolidated Coffee Ltd ) exports its entire production, almost 4,000 tonne.

Krishnakumar said, the obvious first option would be Russia. "The Russian market has changed over the last 7-8 years and the buying pattern is likely European nations."

Subsequently, the company may consider the option of rolling out Tata Coffee brands with Tetley products in other countries like Poland. During the year 2000-01, Tata Coffee exported 2537 tonne of coffee.

In a parallel development, Barista, in which Tata Coffee has a 34.3 per cent stake, will introduce the highest and single estate and specialty teas from the Tetley stable. Barista happens to be one of the largest coffee chains in the country.

Industry sources said, if tea is offered by these chains it will also help promote tea consumption in the country and especially among the youth, as tea traditionally wears a staid image.

Tata Tea is planning the Tetley products in the domestic market to tap the premium end of the market. Tata Tea has already taken over the marketing operation of Tata Coffee.

However, Krishnakumar clarified there are no plans of integrating the operations of Tata Tea and Tata Coffee.

However, coffee prices have been depressed for some time now. Due to higher production in Brazil and Vietnam, both Arabica and Robusta prices remained under pressure and touched historical lows.

The Tata Coffee scrip touched a high of Rs 63.75 before closing at Rs 57.10 on the Bombay Stock Exchange (BSE) and at Rs 65.45 on the National Stock Exchange (NSE).

The share's 52-week highs are Rs 119.90 and Rs 81 on the BSE and NSE, respectively, and 52-week lows are Rs 50 and Rs 49.50 on the BSE and NSE, respectively.