Tatas Plan To Exit Shipping Agency Joint Venture

The Tatas are planning to exit Tata NYK Transport Systems, an equal shipping agency venture between Tata Tea and Japan's Nippon Yusen Kaisha.

Confirming the development, R K Krishna Kumar, vice-chairman of Tata Tea said, "Even though Tata NYK is a profitable venture, we will be exiting from this business because shipping is not the core business activity of Tata Tea."

Tata Tea has already divested 30 per cent of its 50 per cent stake back to NYK, while the balance will also be eventually sold, Krishna Kumar said.

NYK has also received the clearance from the Foreign Investment Promotion Board to hike its stake in the Indian arm. The 30 per cent stake was sold for Rs 8 crore, Krishna Kumar said.

Explaining the rationale behind holding the 20 per cent stake for now, Krishna Kumar said, "NYK wanted us to hold a certain stake in the company for now. Also, there are certain emotional reasons as we have been associated with NYK for 100 years."

Initially, Tata Tea, for a number of years, has been serving as an agent for the NYK Line - one of the largest container shipping lines in the world. It was later decided to enlarge the scope of its association with NYK through a separate joint venture.

Tata NYK plays a crucial role in areas such as transport, operation and management of sea ports, inlands container depots and container freight stations. However, container transport is still the bread and butter of Tata NYK. The company has widest global network to deliver cargo safely and on time.