Restructuring of its loss-making Chinese joint venture Zhejiang Tata Tea Extraction Co and even a likely sale, and work on a separate strategy for its mineral water brand Himalayan are some of the options being explored.
Tata group head Cyrus Mistry is looking at ways to restructure and rework some of the businesses of Tata Global Beverages following a difficult year in 2016.
Restructuring of its loss-making Chinese joint venture Zhejiang Tata Tea Extraction Co and even a likely sale, and work on a separate strategy for its mineral water brand Himalayan are some of the options being explored.
"At this point in time, we are exploring different options in China, whether it would be restructuring or sale. But these are still in the exploration phase," Cyrus told shareholders when asked about impairment of Chinese investments.
The Chinese joint venture of Tata Global has been suffering teething problems since 2013-14 in its facilities to produce instant green tea, tea polyphenols and tea concentrates.
A call on restructuring operations of Zhejiang Tata Tea Extraction Co, which reported Rs 15.34 crore loss and a turnover of Rs 3.08 crore till December 31, 2015, would be taken in coming years, Tata Group head said, adding that stabilisation of the operations is yet to be achieved.
Tata Global Beverages witnessed a dismal FY15 on the profitability front with adjusted PAT declining 22.5% year-on-year to Rs 321.8 crore as it recognised an exceptional loss of Rs 130 crore mainly due to an impairment loss on account of delays in start-up and stabilisation of technology for its instant tea business in China.
"Going forward, stabilising the production process and establishing a pipeline of external customers and successful scaling of technology would be key to the success of the project," Tata Global annual report mentioned.
Tata Global is also looking at operations of brand Himalayan, which has been growing at a moderate pace. The brand was earlier owned by Mount Everest Mineral Water, which has now been merged with the company.
"There are challenges and we are looking at a different strategy going forward. Though the sales have increased significantly. It still continues to lose money. But we have seen significant topline growth. Now, we need to translate that into bottomline growth as well," Cyrus said.
Tata Global is open to acquisitions and would also look at opportunities like dairy, going beyond tea, coffee, value-added beverages and water – areas where it is present now.
"We continue to explore in the field of beverages field and dairy products clearly is an area where there is an opportunity. We have many new products coming out in the pipeline," Cyrus said, adding that the company need to take a much bolder step in expanding its coffee portfolio.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Cyrus")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}