MAJOR PLAYERS
By Tata Tea (TTL) has gone | 14 Dec 2001
While TTL continues to face volume and value pressure within the domestic market, its going to be Tetleys advances in global markets that will hold key to the long-term performance of TTL. With an improvement in tea prices and expected increase in exports, TTL is poised for an improved performance in the next few quarters. The scrip has been in the hands of bears, but when it bottoms out, and it looks it will, a stimulating price appreciation cannot be ruled out. The current market price discounts its annualised earnings about seven times. As it has become a great value-play, our advice to investors is to accumulate.
The
Goodricke group is the leading producer of the Darjeeling
tea and the third largest tea producer in the country.
The company owns 17 gardens spread over 9,500 hectares.
Goodricke has built a strong equity in the tea business
with its superior quality of tea, enabled by continuous
investments in upgrading production and manufacturing
facilities. Primarily a seller in the auction market,
Goodricke now has an equal proportion of sales in the
bulk and packet tea segments, besides a significant presence
in the export market.
The parent Lawrie Group Plc, UK, is one of the worlds
largest and most profitable tea producers. Being
part of the Lawrie Group, Goodricke benefits not only
from economies of scale, but also has access to a global
marketing and distribution network and the expertise of
the parents management team. The company offers a wide
range of brands to satisfy diverse taste preferences of
various regions. While a greater branded portfolio will
help the company to reduce earnings volatility, Goodrickes
fortunes are intimately linked to price trends in the
auction and the bulk tea export market.
HARRISONS
MALAYALAM
Harrisons
Malayalam, initially owned and managed up by the UK-based
Harrisons and Crosfields group, was taken over by the
RP Goenka (RPG) group in 1988. The RPG group is one of
the countrys leading business groups. It has a 21.5-per
cent stake in Harrisons. Harrisons is the second-largest
tea plantation company in south India. Besides production
and processing of tea, the company is also one of the
leading players in the rubber industry. The sale of tea
contributes to about 69 per cent of the companys turnover,
while rubber accounts for 30 per cent.
The
other activities of the company include engineering and
biotechnology. Harrisons is known for the high quality
of its tea crop, which enables the company to fetch a
premium in the market. The company has been concentrating
on expanding its turnover from packed teas, which currently
accounts for 21 per cent of the total tea sales. This
will enable the company to improve margins and reduce
volatility in realisations associated with bulk commodity
sales.
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