The fast and furious bids placed by the buyers sitting at the dark polished antique table in the boardroom of the Amalgamated Plantations Pvt Ltd’s (APPL) headquarters for a limited batch of Assam tea on a late winter afternoon sent out a clear signal — the north Indian tea plantation business of Tata Group is on the mend.
The bidders had huddled in the room on Bishop Lefroy Road in Calcutta braving the pandemic, while some joined via video conferences, participating in what the company labelled as a commemorative marquee sale of some of the best samples from its gardens produced in 2021.
The season had been a good one for APPL as five of its gardens out of 25 in Assam are in the top 50 league, cutting losses because of the drought. The management has set a target to push at least a dozen of the gardens this year in that list, which is curated based on average prices fetched in auction.
“APPL has surprised both in quality and quantity this year,” said Viren S. Shah, chairman and managing director of Jivraj Tea Ltd, one of the big packers from Gujarat, who participated in the Monday sale. Shah is a big buyer of Assam CTC tea, including from APPL. He made some purchases in the Monday private sale conducted in an auction mode.
Vikram Singh Gulia, APPL managing director and a veteran of three-and-a-half decade in the tea industry, said there is no dearth of demand for good quality tea.
“Production of good quality tea (about 80 million kg) lags the potential demand in India (estimated at 120-130 million kg). There is a lot of headroom for us to grow. But this requires a mindset change across the company, from the top management to pluckers at the garden,” Gulia said.
The company, which was carved out from the then Tata Tea to house north Indian gardens, has 30,000 workers on the rolls, while employing another 40,000 contractually. Inculcating a cultural change to chase quality is no mean task.
Tata Consumer Products now holds a 41.03 per cent stake in APPL. If the cultivation is not hit by drought or flood, APPL could well be back in profit in the next fiscal, a remarkable turnaround for a business which was rumoured to be on the block after failing to cut losses year after year.
“We should be at PBT level in the next fiscal,” Gulia said.
The senior management believes that 23 out of 25 gardens can be profitable soon. If they fetch Rs 300 a kg on an average in the auction, gardens can be profitable. Even though average prices came down for the CTC variety in 2021 over 2020 by Rs 33 a kg, APPL managed to hold on to the prices of the previous year. It is also stepping up retail presence. Within two years of operations, it is selling about 2 million kg. The company has also launched a direct to consumer brand ‘Teas From India’ of premium teas in the market.
Record price
A speciality tea, Golden Pearl, from Assam’s Dibrugarh district was on Monday auctioned at Rs 99,999 per kg, a record price fetched for the second time in two months for such a high-end variety of the commodity from the state.
'Golden Pearl' tea, owned by AFT Techno Trade, went under the hammer at Guwahati Tea Auction Centre (GTAC), he said.
