Harrisons Malayalam to quit packet tea biz

KOCHI: South India’s largest tea producer Harrisons Malayalam Ltd (HML), an RPG group company, is moving out of the consumer packet tea business to focus on plantations in India and abroad. Unlike Hindustan Unilever (HUL) and Tata Tea (the earlier avatar of the present Tata Global Beverage) who quit plantation business to concentrate on tea marketing a few years ago, HML has decided to devote its attention to plantation business. Apart from tea, HML is also the largest producer of rubber in the country.

HML managing director Pankaj Kapoor reckons that plantation is the core competency area of the company. “There is no point in being a fringe player in consumer packet tea business. The effort to raise the division to a higher level has not succeeded. So we decided to quit the sector,” he told ET.

Surya and Mountain Mist are the two popular brands of HML sold primarily in south India. In addition, the company has a presence in premium teas, super premium teas and tea bags. Surianalle and Harrison’s Gold are its well-known super
premium tea.

Tea sector accounts for just over half of the `330-crore turnover of the company. It annually churns out 20,000 tonne tea from its 6,000 hectares spread over Kerala, Tamil Nadu and Karnataka. Bulk of its production is bulk tea which goes for auction. The consumer packet division, started over a decade ago, hasn’t much of an income earner for the company.

According Mr Kapoor, HML has been investing `2-3 crore annually in the division for the promotion without much dividends. While its rivals HUL and TGB have been dominating the consumer packet tea segment, HML ended up suffering a loss of `50 lakh. On the other hand, a spurt in the rubber and tea prices has led to a better income for the company from plantations.

With the aim of becoming a major force in the plantations field, HML has initiated an ambitious re-plantation programme to increase the output. Most of its tea plants are over 80 years old. The company replanted 35 lakh bushes last year and an equal number is slated for re-plantation this year. “We expect to complete re-planting our entire tea plants in the next 3 to 4 years,” Mr Kapoor said.

HML’s interest in plantations is not limited to India. The company is on the lookout for plantation acquisition in Africa and Southeast Asia. “Our teams are visiting various countries. We haven’t finalised anything yet. We are looking at large and organic plantations,” Mr Kapoor said. The re-plantation exercise will help raise the productivity of tea gardens from the present 2,300 kg per hectare to over 3,000 kg per hectare. The company has also planned a revamp of its 12 tea factories during the period.