Overview Of Indian Tea Industry

AN INDUSTRIAL ANALYSIS REPORT ON

GROWTH & PROSPECTS OF TEA INDUSTRY IN INDIA

AN A+ RATED BUSINESS SCHOOL

SUBMITTED TO:

SUBMITTED BY:

Dr. AMARENDRA PRATAP SINGH

GAURAV KUMAR

Sr. LECTURER SMS, VARANASI

IRM/03/24 PGIRM

AN INDUSTRIAL ANALYSIS REPORT ON

GROWTH & PROSPECTS OF TEA INDUSTRY IN INDIA

JAY SHREE TEA & INDUSTRIES LTD.

SUBMITTED TO:

SUBMITTED BY:

Dr. AMARENDRA PRATAP SINGH

GAURAV KUMAR

2

Sr. LECTURER SMS, VARANASI

IRM/03/24 PGIRM

PREFACE This project has been conducted to know about the " GROWTH AND PROSPECTS OF TEA INDUSTRY IN INDIA." This project is a written presentation with observation and references derived from the secondary data. The report starts by giving an industry profile, background of the companies and their product line. In order to achieve the objective and better under stand the problem of industry, it was decided to collect the secondary data concerning to particular industry. This survey report is carried out in the partial fulfillment of my PGDM-IRM course of SCHOOL OF MANAGEMENT SCIENCES, VARANASI. This report is written by in an easy and understandable language. I have given my best effort to complete this survey and make this survey purposeful.

GAURAV KUMAR PGDM-IRM 1ST SEM IRM/03/24

3

DECLARATION

I here by declare that the project report on “GROWTH & PROSPECTS OF TEA INDUSTRY IN INDIA." is submitted on the partial fulfillment of my two year Post Graduate Diploma in Insurance and Risk Management. All the information given here by are true and real up to my knowledge is concerned.

GAURAV KUMAR PGDM-IRM -1ST SEM IRM \ 03\ 24

4

ACKNOWLEDGEMENT Nothing can be gained or acquired without hard work which leads to success. The success of my survey work is the amalgamation of my hard work and co-operation of respondents, who delivered their precious time without any hesitation. I do not have adequate words to convey my emotion rather than feeling of gratitude, for the people who helped me in making my survey report purposeful. I take the opportunity to convey my sincere gratitude to my research mentor Dr.Amarendra Pratap Singh for his helpful guidance during my survey period. First of all I would like to thank god and my parents who showered their blessing upon me in each step of my survey & I express my deep sense of gratitude to prof. P.N. Jha, Director General of SMS, Varanasi, for providing me golden opportunity to bring up talent. I am highly thankful and immensely obliged for his constant guidance and words of inspiration. Last but not the least, I specially wish all my friends a vote of thanks as without their valuable supports this report would have not been possible.

GAURAV KUMAR PGIRM- Ist SEM IRM/03/24

MENTOR:Dr. AMARENDRA PRATAP SINGH

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CONTENTS

6

CONTENTS Page No. 1. INTRODUCTION

9-32

2. TOPIC OF THE PROJECT

33

3. OBJECTIVES OF THE PROJECT

35

4. METHODOLOGY

37

5. ANALYSIS & FINDINGS

39-67

6. CONCLUSIONS

69

7. LIMITATIONS

71

8.

BIBLIOGRAPHY

73

9.

ANNEXURE

75-81

7

INTRODUCTION

INDIAN TEA

8

The Indian tea is an epitome of taste, warmth and happiness. Tea brings cheers and this fact is well known to tea lovers all overt the world being the largest producer of tea in the world India also consumes large amount of tea. "Chai" as tea beverage is known in India has become an essential part of daily life. India produces finest tea leaf in the World and the Darjeeling, Assam and Nilgiri tea are becoming very popular all over. The range of teas in India consists of premium much in demand Darjeeling tea leaf from Darjeeling tea estates in West Bengal, the strong Assam tea leaf and brisk Nilgiri tea from Southern India. Each of the tea producing regions in India have their unique and distinct taste of which the tea drinkers know best. The varieties in India are the white tea leaf, black tea, green tea, and organic tea. Though consumption of the black tea leaf is wide spread, the green tea is also becoming popular for its taste and healthy properties.  DARJEELING TEA ESTATE Darjeeling is situated in the Himalayan ranges in North Eastern India at height of 3000-5000 ft. Among the most expensive in the world Darjeeling tea leaf has a high flavor and quality. No wonder it is often referred to as the Champagne of Teas. Darjeeling also produces the finest of green tea with many estates producing organic version of green tea leaf for the health conscious as well. It is also the most preferred tea leaf in English tea rooms.  ASSAM TEA Assamese tea estates constitute the world's largest tea growing area. Assam tea leaf produces top quality dark liquor with full bodied flavor and strength and is a favorite with the Indian tea drinkers who prefer a good strong cup of tea in their daily lives.  NILGIRI TEA Nilgiri hills are also known as the Blue Mountains range in Southern India. The tea gardens are at a height of 1,000 to 3,000 ft. Nilgiri teas are mild and with characteristic bright & brisk liquor and light clean flavors.

POPULAR TEA LEAFS 9

A single plant can give rise to mind boggling varieties of tea types. The main one are green, black, white and pu-erh teas, these result due to the method of processing and growing used. The region where tea is grown also plays and important part. The flavors of tea leaf can be vastly different depending upon where the tea leaf comes from. Darjeeling tea and Assam black tea are the most popular all over the World. Other popular forms of tea leaf are pu-erh tea and oolong tea leaf while flavored tea and spiced tea blends are also gaining popularity all over. The organic tea is simply any kind of tea which is cultivated using organic manure without the use of pesticides and fertilizers. Organic green tea and organic black tea are consumed for their health benefits, but like all organic foods they are costly.  WHITE TEA LEAF

White tea does not undergo fermentation is less popular of the tea types. It is popular in Fujian province of China. The tea leaf gives colorless liquor, a delicate sweet flavor and a mellow creamy or nutty quality. White tea leaves are the whitish grey buds of the tea plant which are sun dried or steamed.  GREEN TEA LEAF

The fermentation of green tea leaves begins with withering, the next step is pan-frying or steaming to prevent fermentation. Once the steaming process is complete, the green tea leaves are cut dried and cured. In various countries different shapes are given to the green tea leaf depending upon the popularity Green tea is light green/yellow in color, with a subtle flavor that remind one of the aroma fresh green leaves. The health giving properties of green tea leaf are well known.

 OOLONG TEA LEAF

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Oolong tea leaves are among the top quality and expensive teas they are cultivated in China and Taiwan. The tea leaves are semi fermented going through a short stint of oxidation. The leaves are reddish brown in color and the liquor is pale yellow and the aroma is a fresh floral and fruity with a reminiscent of smoke.  BLACK TEA LEAF

Black tea is the most extensively consumed form of tea all over the Globe. Black tea is fermented fully unlike the green tea leaf which is partially fermented. It has bitter sweet and astringent flavor and the tea leaf give dark brown liquor.  PU-ERH TEA LEAF

Pu-erh tea is same as black tea, but this form of tea is fermented twice than regular black tea leaves and fermentation then followed by period of maturation till a thin layer of mold forms on the surface. The mold imparts a characteristic soil-like flavor and a strong earthy quality. Puer tea (also called pu-er or pu-erh) is an ancient and rare tea, much loved in China and the only tea for some 'hardened' tea drinkers. The processes that go into making the classic puers are closely guarded secrets. It is fermented, sometimes twice, and is often pressed into cakes or bricks. This makes puer especially easy to store and keep for long periods. Generally they are robust, earthy teas with a dark red or brown color and distinctive, mysterious aroma. Puer is widely known in China to have major health benefits, especially in reducing cholesterol and as an aid to digestion, which makes it the ideal after dinner tea.

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 SCENTED TEA

Scented or Flower tea is either green or white tea that has been infused with certain flowers, which impart a delicate and interesting taste, and of course a wonderful aroma. As with black tea and milk or sugar, flowers were added to green tea originally to disguise a less than favorable taste in the poorer varieties. This is still the case with many commercially produced flower teas, which hide the taste of very cheap tea behind a strong flowery presence. Flower teas, in particular the delicious jasmine, have gained such a following both in Asia and the Western world, that many people only drink this variety. The Seven Cups jasmine teas combine really fine quality green and white teas with a subtle but distinct jasmine flavor, and are a real treat, especially for dedicated jasmine fans. They are the best jasmine teas we've ever tasted. These main types of tea leaves give rise to multitude of varieties that are a product of specific cultivation methods and the regions where they come from. The season in which the tea is grown also gives rise to difference in flavor and color.

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AN OVERVIEW OF INDIAN TEA INDUSTRY

Tea is made from the young leaves and leaf buds of the tea bush Camellia sinensis. Ancient Chinese and Japanese legends refer to a beverage made from an infusion of dried tea leaves. In 1833, the East India Company, after losing its legal monopoly of the tea trade between China and Britain, began to look for other sources of supply. As a result, the cultivation of tea in India began in 1834, with the planting of wild tea found growing in Assam in 1823. The tea industry has an important and special place in the Indian economy. Tea is the country's primary beverage, with almost 85% of total households in the country consuming tea. India is the world's largest producer and consumer of tea, with India accounting for 27% of the world tea production. India's expenditure on beverages and processed foods accounts for 8% of food expenditure in rural areas, and 15% in urban areas. India is also an important tea exporter, accounting for around 12-13% of world tea exports. Further, certain varieties of tea (for example Darjeeling) are grown only in India and are in great demand across the world. All Darjeeling teas possess the lightness of flavor and fine coloring that set them apart from all other teas. India's tea industry exports were estimated at Rs. 17.31 billion during FY2006, accounting for 0.4% of India's exports. In value terms, tea ranks as the fourth-largest agricultural product export item from India, with exports of around US$410 million in 2004. In terms of employment, the tea industry employs around 1.27 million people at tea plantations and 2 million people indirectly, of which 50% are women. The last fact is particularly important when we consider that tea industry, to a large extent, drives the economies of the regions where the tea gardens are concentrated, for example Assam. Tea is

13

the prime beverage consumed in India, and private final consumption expenditure (PFCE) on tea, coffee and cocoa aggregated Rs. 134.96 billion in FY2005, accounting for around 2% of India's PFCE on food and 0.7% of India's PFCE. The latest available data indicates that tea accounts for 90.6% for India's consumption of stimulants (tea, coffee, and cocoa beans), followed by coffee (7.7%), and cocoa beans (1.7%). Tea plantations in India are mainly located in rural hills and backward areas of North-eastern and Southern States. The North- Eastern region with 82% of area accounts for 76% of total tea production. Major tea growing areas of the country are concentrated in Assam, West Bengal, Tamil Nadu and Kerala. The other areas where tea is grown to a small extent are Karnataka, Tripura, Himachal Pradesh, Uttaranchal, Arunachal Pradesh, Manipur, Sikkim, Nagaland, Meghalaya, Mizoram, Bihar and Orissa. The tea as an agricultural output earns more money for the country than as a manufactured product. But this by no means indicates that tea manufacturing is a nascent concept in India. The only player that has crossed the seven seas to promote branded tea in form of Poly-packs etc is Tata Tea. But the fact that there are no other major house which has promoted itself as a tea manufacturing house provides enough scope to the houses themselves to improve their status.

14

MAJOR PLAYERS IN INDIAN TEA INDUSTRY

MAJOR TEA PLAYERS

TATA TEA

ASSAM CO. LTD.

GOODRICKE GROUP LTD.

DUNCAN’S INDUSTRIES LTD.

JAY SHREE TEA & INDUSTRIES LTD.

TATA TEA 15

INDUSTRY

- TEA

INCORPORATION YEAR

- 1962

OWNERSHIP

- TATA GROUP

REGISTERED OFFICE

- 1, BISHOP LEFROY ROAD, KOLKATA-WEST BENGAL

TEL. NO.-

- 22811807

LISTED ON

- BOMBAY, CULCUTTA, LONDON, NATIONAL, UTTAR PRADESH (KANPUR)

WEBSITE

- www.tatatea.com

BOARD OF DIRECTORS

16

DIRECTORS NAME

DESIGNATION

R.N. TATA

CHAIRMAN

R.K. KRISHNA KUMAR

VICE CHANCELLOR

Y.H. MALEGAM

DIRECTOR

D.B. ENGINEER

DIRECTOR

F.K. KAVARANA

DIRECTOR

U.M. RAO

DIRECTOR

AMRITA PATEL (Dr.)

DIRECTOR

K. PRINGLE

DIRECTOR

P.T. SIGANPORIA

MANAGING DIRECTOR

S. TALWAR (Ms.)

EXECUTIVE DIRECTOR

D. K. SEN

VICE PRESIDENT & SECRETARY

COMPANY BACKGROUND 17

Tata tea is the second largest tea company in India with an annual turnover of Rs.1056.4 crore. A part of the Tata Group, the company was incorporated in 1964 as a joint venture between the Tata Group and the UK--based James Finlay & Co. In December 1982, the Tata Group acquired foreign holding of James Finlay. Subsequently, in 1983, the company was re--christened as `Tata Tea Ltd.' from `Tata Finlay Ltd' earlier. The company's business activities span from plantations to manufacturing and selling of packaged and instant tea in the domestic as well as the overseas market. The company's packet tea division is involved in buying, blending and packaging of tea and its operations are spread over nine facilities. The company sells 90 per cent of its tea in packet form with bulk sales accounting for only 10 per cent. It controls 14 per cent of the Indian tea market (2005--06) with some of the famous brands, Tata Tea, Tetley, Kanan Devan, Chakra Gold, Agni and Gemini, under its umbrella. The company reaches the Indian consumer with over 1.7 million retail outlets, 2,500 stockist and 38 C&F agents spread across the country. Tata Tea's instant tea operations are carried out from a 100 per cent export oriented unit (EOU) located in Munnar. The instant tea is exported mainly to the USA as also to Switzerland, Austria, Germany, Italy, Taiwan, Singapore, Japan and Australia. The company earns around 15 per cent of its total revenues from exports. The entire exports to USA are done through Tata Tea Inc, a 100 per cent subsidiary of Tata Tea. The Tetley tea division based at Kochi is an EOU, which services the branded business of specific Tetley and Tata Tea markets outside India. The global business division of Tata Tea has three main lines of business, branded tea, bulk tea, and spices. Tata Tea has come a long way from being a pure plantation company to become a branded tea company. Currently, it is amongst the top two branded tea manufacturers in India, the other one being Hindustan Unilever. The strategic decisions of acquiring Tetley Tea and selling off its plantations have helped it increase its presence in the branded tea business. In April 2005, the company transferred 17 tea gardens in Kerala to Kanan Devan Plantations Company (KDPC). Further, it transfered six of its plantations in Kerala and Tamil Nadu to its subsidiary, Tata Coffee, there by completely exiting its planation business in South India. Two other estates (Pllivasal and Perikanal) are managed by KDPC on behalf of Tata Tea. The company also plans to transfer its plantations business in North India to Amalgamated Plantations Private Limited soon. This would slowly pave the exit for the company from its tea estate operations and allow it to focus solely on its branded tea business. The newly formed company, APPL will be involved in non--tea activities like alternative cropping, pisciculture and floriculture. Tata Tea also plans to enter the health segment by launching new products related to green tea, speciality, fruits and herb drinks. It also plans to utilise its plantations for tourism purposes. In May 2007, the company entered into a joint venture agreement with a Chinese company-Zhejiang Tea Import & Export to manufacture and market green tea polyphenols, tea extracts and other tea beverages. The company also acquired a stake in Mount Everest Mineral Water (MEMW) to diversify into the pure water segment. MEMW became a subsidiary of Tata Tea with effect from 22 August 2007.

18

Besides Tata Tea Inc, the company has two more subsidiaries, viz. Tata Tea (GB), the special purpose vehicle formed in March 2000 for the purchase of The Tetley Group's shares and Tata Coffee, the fifth largest coffee company in India with a market share of 2.5 per cent (2005--06). Tata Coffee is listed on the Indian bourses and Tata Tea holds 57.5 per cent stake in it.

MILESTONES •

Pre 1963 James Finlay

•

1964 Tata Finlay established to develop value added Tea

•

1976 Tata Finlay takes over tea production and marketing operations of James Finlay

•

1983 James Finlay sell their shareholdings to Tatas heralding the "Dawn of a new Era" Tata Tea is born

•

1987 A wholly owned subsidiary, Tata Tea Inc, set up in the U.S.A.

•

1991 Acquisition of 52.5% shareholding in Consolidated Coffee Ltd (Tata Coffee Ltd.)

•

1992 Joint Venture in Sri Lanka, Estate Management Services (P) Ltd. formed.

•

1993 Joint Venture alliance with Allied Lyons plc - Tata Tetley established.

•

1995-96 65% share Lankan JVC acquires 51% shareholding in Watawala Plantations Ltd.

•

1996 Sri Lankan JVC acquires 51% shareholding in Watawala Plantations Ltd.

•

2000 Tata Tea acquires The Tetley Group Ltd., UK.

ASSAM CO. LTD.

19

INDUSTRY

- TEA

OWNERSHIP

- MEHTA MAHENDRA GROUP

INCORPORATION YEAR

- 1839

REGISTERED OFFICE

- GREENWOOD TEA ESTATE, PO-DIBRUGARH, DIBRUGARH- ASSAM

TEL. NO.

- 0373-2301051

LISTED ON

-BOMBAY, NATIONAL

WEBSITE

- www.assamco.com

CULCUTTA,

GAUHATI,

BOARD OF DIRECTORS 20

DIRECTORS NAME

DESIGNATION

K K JAJODIA

CHAIRMAN

A K JAJODIA

MD & CEO

ABHAY CHAWDHRY

DIRECTOR (FINANCE) & CFO

AMIR AHSAN

EXECUTIVE DIRECTOR

B P KANODIA

DIRECTOR

SANTOSH BHAGAT

DIRECTOR

PINTU KR AGARWALLA

DIRECTOR

ARUP KUMAR ROY

CO. SECRETARY

COMPANY BACKGROUND 21

Assam Company Ltd (ACL) was founded in 1839 and is the pioneer tea plantation company in the world. It is the first tea plantation company of India started its first tea garden in 1839. ACL is also the first company to explore oil in Assam in the year 1889. ACL is one of the leading producers of the most exquisite, high quality, premium teas. The company operates 16 factories, 19 tea estates and gardens spread over 12,000 hectares. It employs over 32,000 people with well laid-out infrastructure, duly supported by planned social welfare activities. The company manufactures around 15 million kg. of tea and being a bulk manufacturer, 95% of the operations are done through B2B route. The remaining 5% of the business is transacted in small high value niche product segment. The business totally is committed to high quality, with useful quantity in both export and the domestic segments wherein 90% of the B2B process is directly placed to people who are in the retail chains. The entire niche business conducted by the company is attributed to direct retail services. Net revenues for ACL's Tea division are expected to be at Rs.1290 mn and net profit of Rs.172 mn in CY05E. The company caters to the premium tea segment, having established its brand value in the international markets. ACL plans to merge its subsidiary Namburnadi Tea Company (NTCL) with the parent company by September 2005. This is an initiative to consolidate its tea units so as to focus on the tea business as a whole. ACL employs over 32,000 people with well laid out infrastructure, duly supported by planned social welfare activities. ACL is preparing the platform to expand its value on the global tea market. ACL actively takes interest in the field of wild life preservation.

LANDMARKS

22

•

In 1845, the Company by a Deed of British Parliament was awarded the "Royal Charter" by Her Majesty Queen Victoria, the then Empress of India in recognition of excellence.

•

In 2005, Mr. David Dewherst, Hon'ble Lt. Governor of Texas, USA, presented the "Wooden Hammer of Texas" to Dr. KK Jajodia, the Chairman of Assam Group of Companies. Tea is a gift of the British Raj to India and through India to the world, successfully achieved through ACL, which continues to be recognized as the "Jewel of the Crown" of the Tea Industry.

•

•

In India Oil was first discovered in North East by an associate of Assam Company Limited.

•

After liberalization of Indian Govt. policies in 1991 - 1992, ACL diversified into the oil and gas industry focusing on exploration, development, and production in North East India.

•

One of the leading producers of the most exquisite, high quality, premium teas.

GOODRICKE GROUP LTD.

23

INDUSTRY

- TEA

INCORPORATION YEAR

- 1977

OWNERSHIP

- GOODRICKE (F) GROUP

REGISTERED OFFICE

- 'CAMELLIA HOUSE',14, GURUSADAY ROAD, KOLKATA - 700 019 WEST BENGAL, INDIA

TEL. NO.

- +91-33-22873067

WEBSITE

- www.goodricke.com

BOARD OF DIRECTORS 24

DIRECTORS NAME

DESIGNATION

P.A. LEGGTT

CHAIRMAN

A.N SINGH

MANAGING DIRECTOR & CEO

B.N. GHOSH

MANAGING DIRECTOR

K.S. DAVID

MANAGING DIRECTOR

M.C. PERKINS

NON EXECUTIVE DIRECTOR

A.K. MATHUR

DIRECTOR

S. KAUL (Dr.)

DIRECTOR

K.SINHA

DIRECTOR

PRODOSH KUMAR SEN

DIRECTOR

K. PALCHOUDHURI

DIRECTOR

D.P. CHAKRAVARTI

GM & SECRETARY

COMPANY BACKGROUND

25

The Company was incorporated in the State of West Bengal, India on 14th June 1977 as a public limited company under the provisions of the Companies Act 1956 (Act). Its main objects per Memorandum & Articles of Association are, amongst other things, to grow, cultivate, manufacture, treat, blend, process, buy, sell and deal in tea in various forms, to carry on the business as planters in all its branches, to manufacture, buy, sell and deal in machinery for processing tea and in connection therewith or acquire by amalgamation, purchase, take-over or otherwise the whole or part of the assets, liabilities and undertaking in India or elsewhere of any other company, body corporate, firm, association of person. The Company was granted a certificate of entitlement to commence business under the provisions of the Act by the Registrar of Companies, on 27th June 1977. All the 17 existing tea gardens of Goodricke Group Ltd. were owned by eight Sterling Tea Companies . They had established tea gardens progressively in late 1800s and were carrying on business in tea in India. The sterling companies together owned 17 tea estates in India. 12 estates are in the district of Jalpaiguri and 3 in Darjeeling in the State of West Bengal and 2 in Darrang district in the State of Assam. Pursuant to Section 29(2)(a) of the Foreign Exchange Regulation Act, 1973 (“the FERA”), Reserve Bank of India agreed to grant permission to carry on business to the Sterling companies subject to Bank of India agreed to grant permission to carry on business to the Sterling companies subject to takeover of the Gardens by an Indian Company to be formed. Accordingly based on schemes of merger and with the sanction of Calcutta High Court, the 8 Sterling Companies were amalgamated with Goodricke Group Ltd effective 1st January 1978. The Company has associated operational companies having tea gardens in Darjeeling and Assam: Companies

Tea Estate (With Tea Factory)

Location

Amgoorie India Ltd.

2

Darjeeling

Stewart Holl (India) Ltd.

4

Assam

Amgoorie India Ltd.

2

Assam

Koomber Tea Co. Pvt. Ltd.

2

Assam

26

DUNCANS INDUSTRIES LTD.

INDUSTRY

-TEA

INCORPORATION YEAR

- 1951

OWNERSHIP

- GOENKA G.P. (DUNCANS) GROUP

REGISTERED OFFICE

- 31, NETAJI SUBHAS ROAD, KOLKATA WEST BENGAL-700001

TEL. NO.

- +91-33-2230062

WEBSITE

- www.duncaninfotech.com

BOARD OF DIRECTORS 27

DIRECTORS NAME

DESIGNATION

G.P. GOENKA

CHAIRMAN

P.K.KAUL

DIRECTOR

R.K. BHARGAVA

DIRECTOR

T.S. BROCA

DIRECTOR

MILAN SEN

DIRECTOR

M.H. CHINOY

DIRECTOR

D. SENGUPTA

DIRECTOR (IDBI)

P.K.BASU (Dr.)

DIRECTOR (ICICI)

A.K. GOEL

EXECUTIVE DIRECTOR

S.P. GUPTA

EXECUTIVE DIRECTOR

V.P. KAUSHIK

MANAGING DIRECTOR

R.R. PRASAD

EXECUTIVE DIRECTOR

VS. VISWANATHAN

SECRETARY

28

COMPANY BACKGROUND In the year 1859 Walter Duncan, a young Scottish merchant lands on the magical shores of the East Indies. Swayed by the beneficial climate of easy trade on the Indian shores, the intrepid traveller sets up the Playfair Duncan company to cultivate the ‘honey brew’ of the Darjeeling slopes-tea. Under this one man entrepreneurship, the company begins the export of high quality tea to a growing market abroad, and within years the name Duncans become synonymous with tea. Business expands, the Duncan Brothers Limited is formed, and the first seeds of diversification is sown- the Birpara Tea Company and the Anglo India Jute Mills. In the year 1951 the Goenka family, steeped in generations of business expertise, takes up the reins of Duncans Brothers Limited. With interests in two of the core industries of India, tea and jute, the now non-anglicised Group soon creates a firm foothold in the subcontinent, and is ready for 'greener pastures'. Mr. G.P.Goenka takes over operations of the Group’s tea gardens, and lays the foundation for their professional management, which has today made the company a force to reckon with in the tea industry. In the year 1979 he takes over as Chairman of the Group. under whose able stewardship, the Group receives new direction and impetus. A phenomenal growth commences as the group expands through vertical integration and diversification. Duncans goes on to become one of the country’s fastest growing business houses, their interests touching industries as farencompassing and varied as electronics, tyre machinery, petrochemicals, thermosetting plastics, paper, specialty chemicals, synthetic rubber, carbon black, nylon tyre cord, synthetic fibers, leasing, and even education and healthcare. Duncan Goenka Group is today highly diversified with 20 operating companies and a workforce of 40,000 employees. Its present turnover of Rs. 20 billion, places it amongst the top ten industrial groups in the country. In its millennium avatar, the Group has identified four thrust areas - power generation and other core sector projects, agro-based ventures, chemicals and petrochemicals and frontier sciences like software and biotechnology. A target of Rs. 100 billion has been set for achievement by 2000 A.D. Today, the Duncan Goenka Group is a nucleus of activity, seeking new challenges and ready for exploration, to define its vision and realize its dreams.

JAY SHREE TEA & INDUSTRIES LTD.

29

INDUSTRY

- TEA

INCORPORATION YEAR

- 1945

OWNERSHIP

- BIRLA

REGISTERED OFFICE

- INDUSTRY HOUSE,

TEL. NO.

- 91-33-22827531

LISTED ON

- BOMBAY,

WEBSITE

- www.jayshreetea.com

B.K. GROUP

15TH FLOOR, 10, CAMAC STREET, KOLKATA-WEST BENGAL

CALCUTTA, DELHI, NATIONAL

30

BOARD OF DIRECTORS DIRECTORS NAME

DESIGNATION

B.K. BIRLA

CHAIRMAN

B.M. KHAITAN

DIRECTOR

G.P. GOENKA

DIRECTOR

S.S. KOTHARI

DIRECTOR

S.K. TAPURIAH

DIRECTOR

JAYSHREE MOHTA

DIRECTOR

D.K. PANT

DIRECTOR (GIC)

JAYSHREE MOHTA (SMT.)

DIRECTOR

D.M.JAIN

MANAGING DIRECTOR

R.K. GANERIWALA

VP & SECRETARY

31

COMPANY BACKGROUND Jay Shree Tea & Industries Limited is a well diversified conglomerate of B. K. Birla Group-- a well reputed industrial house of India. Jay shree Tea & Industries Limited is engaged in the business of plantation, sale and export of tea. It diversified into manufacture of decoration plywood, timber packing products and chemicals and phosphatic fertilizers. The main product of the company is Black tea. The company has under its fold 19 tea estates including two estates in its subsidiary spread all over India and manufactures around 15 million Kgs of tea per annum. Total area under tea is around 8000 Hectares. The Company produces around 10% of total Darjeeling teas produced in the country. The company's efforts to improve tea productivity and quality have been recognized at various levels and numerous awards and prizes have been awarded to it . Most of the tea estates of the company are ISO-9002 certified. The company manufactures Super phosphate and Sulphuric Acid at its two plants at Khardah in North 24-Parganas, West Bengal and one plant at Pataudi in Gurgaon district, Haryana. The annual installed capacity is 2,25,721 M.T. Superphosphate and 95,710 M.T. of Sulphuric acid and production of 1,31,964 M.T. of Superphosphate and 76,438 M.T. of Sulphuric acid during 1999-2000. In its Real Estate Division the company has developed commercial complexes and residential apartments at Calcutta and Bangalore. It is in the process of developing residential complexes in the heart of Calcutta through its subsidiary Shiva's Group Limited. All these properties are in prime areas and we stress on high quality constructions.

32

TOPIC OF THE PROJECT

GROWTH AND PROSPECTS OF TEA INDUSTRY IN INDIA.

33

OBJECTIVES OF THE PROJECT

34

RESEARCH OBJECTIVE:-

Complete overview of Tea Industry in India. 

To know the market trend of tea industry in India.



To know the sales & growth of tea industry.



To know the contribution of tea industry in Indian Economy.



To have a overview of major tea production companies in India

35

METHODOLOGY

36

METHODOLOGY:-

TYPE OF RESEARCH: -

Analytical and Descriptive

DATA COLLECTION METHOD: - Secondary Data SOURCES OF SECONDARY DATA: CMIE Database

 Through internet • Through Tea Association of India’s website • Through Tea Board of India’s website

Reference books and journals

STATISTICAL TOOLS: Graph  Bar Diagram  Tabular Form

37

ANALYSIS & FINDINGS

38

ANALYSIS RECENT TREND IN INDIAN TEA INDUSTRY All–India tea production declined by 2.6 per cent to 1,05,440 tonnes in June 2008. Cumulative tea production during the first half of the year 2008 grew by 3.3 percent to 3,45,680 tonnes. This growth was driven by tea production in South India. Tea production in South India grew by 9.5 per cent during the same period. However, North India witnessed a marginal growth of 0.3 per cent in the crop output. We expect tea production to grow by 1.8 per cent during the year 2008. From the year 2003 the production of tea mostly has gone up. This was continued till the year 2006.In the year 2003 the production was Rs.878.13 Crore which has gone up to Rs.957.27 Crore in the year 2006. But then it has gone down to Rs.944.68 Crore in the year 2007. In the current year that is in 2008 the production is Rs.962.03 crore which is the highest of the given years.

39

The recent changes in the production can be summarized in the following tabular form: Year TeaProduction (Rs.Cr.)

2003 878.13

2004 892.97

2005 927.98

2006 957.27

2007 944.68

2008 962.03

Based on the above table we can draw a graph as below:

Tea production till 2008 980 960 940 920 900 880 860 840 820

957.27

962.03 944.68

927.98 878.13

892.97

2003

2004

Tea Production

2005

2006

2007

2008

Year

*SOURCE-CMIE

INTERPRETATION

40

The graph shows that the only year when the production has gone down is 2007. That year the production has decreased to 944.68 crore from 957.27 crore in the year 2006. In recent context the production in the year 2008 has gone up from 944.68 crore to 962.03 crore. This shows that the production mostly has gone up during the last 6 years. PRODUCTION IN ONE YEAR (MONTHLY) In last one year from June 2007 to June 2008 the monthly production has been recorded as below: MONTH

INDIA

Jun 2007 Jul 2007 Aug 2007 Sep 2007 Oct 2007 Nov 2007 Dec 2007 Jan 2008 Feb 2008 Mar 2008 Apr 2008 May 2008 Jun 2008

1,08,291 1,25,083 1,16,275 1,13,195 1 ,13,297 91,953 50,165 21,622 17,766 50,543 80,042 70,267 1,05,440

NORTH INDIA

84,637 1,09,372 1,00,657 92,772 95,527 68,943 32,083 8,116 1,337 30,986 55,576 46,866 83,082

SOUTH INDIA

23,654 15,711 15,618 20,423 17,770 23,010 18,082 13,506 16,429 19,557 24,466 23,401 22,358

INDIA NORTH INDIA

Jun-08

May-08

Apr-08

Mar-08

Jan-08

Feb-08

Dec-07

Nov-07

Oct-07

Sep-07

Aug-07

SOUTH INDIA

Jul-07

140000 120000 100000 80000 60000 40000 20000 0

Jun-07

Production(Tonnes)

Production from Jun-07 to Jun-08

Time

* SOURCE- CMIE INTERPRETATION

41

Based on the above graph it can be seen that the production of tea in India has seen many ups and downs. The highest production was in July 2007 and the lowest was in February 2008. Also, it can be seen that the production in South India has significant role in January 2008 as well as in February 2008.

PRODUCTION OF TEA IN INDIA (LAST 5 YEARS) Year Tea Production (In Tonnes) Tea Production in North India (In Tonnes) Tea Production in South India (In Tonnes)

2003

2004

2005

2006

2007

878129 648277

892965 662184

927984 700975

955907 729619

944678 724690

229852

230781

227009

226288

219988

1200000

*SOURCE- CMIE

INTERPRETATION:Based on the above graph it can be seen that the production of tea in India has grown regularly from 2003 to 2006, but gone down in 2007.This is mainly due to increase in the production in North India. The production in South India is nearly constant. This shows that the main region of production is North India.

1000000

878 42

REGION-WISE PRODUCTION (LAST 5 YEARS) Year Tea Production in North India (In Tonnes) Tea Production in South India (In Tonnes)

2003 648277

2004 662184

2005 700975

2006 729619

2007 724690

229852

230781

227009

226288

219988

Region-wise Production (In Tonnes) 800000 700000

648277

700975

662184

729619

724690

600000 Tea Production in North India

500000 400000 300000

229852

230781

227009

226288

200000

Tea Production in South India 219988

100000 0 2003

2004

2005

2006

2007

*SOURCE- CMIE

INTERPRETATION The above graph shows that the Northern India is the major tea producing region than Southern region. The production in North India has continuously increases from 2003 to 2006 and decreases in 2007.The production in North India in the year 2004 was 648277 Tonnes and reaches to 729619 Tonnes in the year 2006.

43

TEA PRODUCTION IN NORTH INDIA (LAST 5 YEARS) Tea Production in Assam (IN TONNES)

Year Tea Production in Assam (Tonnes)

2003

2004

2005

2006

2007

434759

435649

474137

483649

479925

490000

483649

480000

479925

474137

470000 460000 450000 440000

434759

435649

2003

2004

430000 420000 410000 2005

2006

2007

*SOURCE-CMIE

INTERPRETATION Based on the above graph it can be interpreted that the production in Assam is continuously increased from the year 2003 to the year 2006 and then slightly decreased in the year 2007.This

44

shows that Assam has a great contribution in the production of tea in North India. Assam is the main tea producing region for North India.

Tea Production in West Bengal (IN TONNES) Year Tea Production in West Bengal (Tonnes)

2003

2004

2005

2006

2007

200635

214541

214660

234654

231436

240000

234654

231436

230000 220000

214541

214660

2004

2005

210000 200635 200000 190000

*SOURCE-CMIE

180000

2003

2006

2007

*SOURCE- CMIE

INTERPRETATION Based on the above graph it can be seen that the production in West Bengal is continuously increased from the year 2003 to the year 2006 and then slightly decreased in the year 2007.This shows that West Bengal has also great contribution in the production of tea in North India. After Assam, West Bengal is the other main tea producing region for North India.

45

Tea Production in Multi-States (IN TONNES)

Year Tea Production in Multi-States (Tonnes)

2003

2004

2005

2006

2007

12883

11762

12178

12684

13329

13500 13000

13329 12883 12684

12500

12178

12000

11762

11500 11000 10500 2003

2004

2005

2006

2007

*SOURCE-CMIE

INTERPRETATION The above graph shows the production in other states of North India. The production in the year 2003 was 12883 Tonnes which was greater than the production in the three consecutive years i.e. 2004, 2005 and 2006. The production was continuously increased from the year 2004 to the year 2007. The highest production was in the year 2007 which was 13329 Tonnes.

46

TEA PRODUCTION IN SOUTH INDIA (LAST 5 YEARS) Year Tea Production in South India (In Tonnes)

2003 229852

2004 230781

2005 227009

2006 226288

2007 219988

Tea Production in South India (in Tonnes)

232000 230000 228000 226000 224000 222000 220000 218000 216000 214000

229852

230781 227009

226288

219988

2003

2004

2005

2006

Tea Production in South India

2007

*SOURCE- CMIE

INTERPRETATION The above graph shows that the tea production has decreasing trend from the year 2004 to 2007. The only increase was in the year 2004. In the year 2004 the production has slightly increased with respect to 2003. The production was 230781 Tonnes in 2004. The lowest production was in the year 2007 when it was 219968 Tonnes.

47

SALES GROWTH YEAR Sales Growth of Tea Companies Percent)

(in

2003

2004

2005

2006

2007

-18.80%

-9.50%

19.60%

9.60%

4.60%

Sales Growth of Tea Companies 25.00%

19.60%

20.00% 15.00%

9.60%

10.00%

4.60%

5.00% 0.00% -5.00%

Sales Growth of Tea Companies 2003

-10.00%

-25.00%

2005

2006

2007

-9.50%

-15.00% -20.00%

2004

-18.80%

*SOURCE- CMIE

INTERPRETION The above graph shows that in 2003 the sale has declined with respect to the previous year. Again it has declined in 2004 with respect to 2003. But, in 2005 it has gone up with respect to 2004. Thereafter, again it has gone up in 2006 with respect to 2005.This continues in 2007 also.

48

EXPENSES GROWTH YEAR

2003

Expenses Growth of Tea Companies

-20.90%

2004

2005

2006

2007

-5.30%

18.60%

11.20%

-0.90%

Expenses Growth of Tea Companies 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% -5.00%

2003

2004

2005

2006

2007

Expenses Growth of Tea Companies

-10.00% -15.00% -20.00% -25.00%

2. EXPORT *SOURCE- CMIE

INTERPRETATION The above graph shows that in 2003 the expense has declined with respect to the previous year. Again it has declined in 2004 with respect to 2003. But, in 2005 it has gone up with respect to 2004. Thereafter, again it has gone up in 2006 with respect to 2005. In 2007 it has gone down with respect to 2006.

49

PBDIT GROWTH YEAR PBDIT Growth of Tea Companies

2003

2004

2005

2006

2007

-49.90%

-47.60%

178.70%

-44.50%

190.30%

PBDIT Growth of Tea Companies 250.00% 190.30%

178.70%

200.00% 150.00% 100.00%

PBDIT Growth of Tea Companies

50.00% 0.00% -50.00%

2003

2004

-49.90%

-47.60%

2005

2006

2007

-44.50%

-100.00%

*SOURCE- CMIE

INTERPRETATION The above graph shows that the PBDIT has changed significantly in last five years. From -49.90% in 2003 it has reached to 190.30% in 2007. It has increased in 2004 with respect to 2003. In 2005 it has gone up significantly with respect to 2004. Thereafter, again it has gone down in 2006 with respect to 2005. In 2007 it has gone up with respect to 2006. In 2007 it is seen that the growth is maximum of the given years.

50

EXPENSES TO SALES RATIO YEAR Expenses to Sales Ratio of Tea Companies

2003

2004

2005

2006

2007

92.6%

96.8%

95.2%

96.5%

91.4%

Expenses to Sales Ratio of Tea Companies 98.00% 97.00% 96.00% 95.00% 94.00% 93.00% 92.00% 91.00% 90.00% 89.00% 88.00%

96.80%

96.50% 95.20%

92.60% 91.40%

2003

2004

2005

2006

Expenses to Sales Ratio of Tea Companies

2007

*SORCE- CMIE

INTERPRETATION The above graph shows the expenses to sales ratio of tea companies from the year 2003 to the year 2007. The ratio was maximum in the year 2004 which was 96.80% and minimum in the year 2007 which was 91.40%. The graph shows that the ratio was neither increasing nor decreasing continuously, rather it has ups and downs alternately.

51

MARKET CAPITALISATION(IN Rs.Cr.) YEAR Market Capitalisation of Tea Scrips (Rs.Cr)

2003 1418

2004 2370

2005 4175

2006 8550

2007 5627

Market Capitalisation of Tea Scrips (Rs.Cr) 8550

9000 8000 7000

5627

6000 5000

Market Capitalisation of Tea Scrips(Rs.Cr)

4175

4000 3000 2000

2370 1418

1000 0 2003

2004

2005

2006

2007

*SOURCE- CMIE

INTERPRETAION The above graph shows the market capitalization of tea scrips in Rs. Crore. The continuous growth was recorded from the year 2003 to the year 2006 and then it has gone down in the year 2007. The graph shows that there was great increase in the year 2006 with respect to the year 2005. The increase was more than 100%. Thereafter, in the next year it has gone down by nearly 30%.

52

VOLATILITY OF DAILY RETURNS VOLATILITY OF DAILY RETURNS OF TEA INDEX (PERCENT) Year Volatility of Daily Returns of Tea Index (Market Cap Weighted) Volatility of Daily Returns of Tea Index (Equally Weighted)

3.00% 2.50%

2003 1.60%

2004 2.20%

2005 2%

2006 1.50%

2007 2.10%

2.10%

2.40%

2.80%

2%

2%

2.80%

2.10%

2.40% 2.20% 2%

2.00% 1.60%

2%

2.10% 2%

1.50%

1.50%

Volatility of Daily Returns of Tea Index (Market Cap Weighted) Per cent Volatility of Daily Returns of Tea Index (Equally Weighted) Per cent

1.00% 0.50% 0.00% 2003

2004

2005

2006

2007

*SOURCE- CMIE

INTERPRETATION The above graph shows the volatility of daily returns of tea. The volatility of daily returns of tea index (Market Cap Weighted) has shown ups and downs whereas the volatility of daily returns of tea index (Equally Weighted) has shown mainly increasing trend from 2003 to 2006 and then same after decreasing in 2006.

53

TOTAL TRADING VOLUME

Year Total Trading Volumes of Tea Scrips (Rs.Lakh)

2003 70200

2004 237454

2005 319069

2006 1109738

2007 541964

Total Trading Volumes of Tea Scrips (Rs.Lakh) 1109738

1200000 1000000 800000

541964

600000 400000 200000

237454

Total Trading Volumes of Tea Scrips (Rs.Lakh)

319069

70200

0 2003

2004

2005

2006

2007

*SOURCE- CMIE

INTERPRETATION The above graph shows the total trading volumes of tea scrips in Rs. Lakh. The continuous growth was recorded from the year 2003 to the year 2006 and then it has gone down in the year 2007. The graph shows that there was great increase in the year 2006 with respect to the year 2005. The increase was more than 300%. Thereafter, in the next year it has gone down by nearly 50%.

54

OTHER INCOME TO TOTAL INCOME RATIO OF TEA COMPANIES Year Other Income To Total Income Ratio of Tea Companies (Percent)

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

4.20%

5.80%

4.90%

6.30%

5.70%

Other Income To Total Income Ratio of Tea Companies (Percent) 7.00%

5.00%

6.30%

5.80%

6.00%

5.70% 4.90%

4.20% Other Income To Total Income Ratio of Tea Companies (Percent)

4.00% 3.00% 2.00% 1.00% 0.00% 2003

2004

2005

2006

2007

*SOURCE- CMIE

INTERPRETATION Based on the above graph it can be interpreted that the other income to total income ratio was maximum in the year 2006. It has alternate ups and downs in the 5 years taken from 2003 to 2007. Other income to total income ratio was 6.30% in 2006. Then it has decreased to 5.70% in 2005. The lowest was recorded in the year 2003 when it was 4.20%. The above graph shows that the contribution of other income in the total income has increased in 2007 with respect to 2003.

55

EXPORT & IMPORT OF TEA

EXPORT TO THE WORLD Year Total Tea Exports To World (Tonnes)

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

164594.9

176813

177234.3

184058.7

171247.3

Total Tea Exports To World (Tonnes) 190000

184058.69

185000 180000

176812.95

177234.34

175000

171247.31

170000 165000

Total Tea Exports To World (Volume)

164594.89

160000 155000 150000 2003

2004

2005

2006

2007

*SOURCE- CMIE

INTERPRETATION The above graph shows that the export to the world has increased continuously from 2003 to 2006 and then decreased in 2007. The total export to the world was 164594.89 Tonnes in 2003 56

which has increased to 184058.69 Tonnes in 2006.The year 2006 has shown maximum value of export to the world and the year 2003 has lowest value of export.

IMPORT OF TEA Year Total Tea Imports To World (Tonnes)

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

9885.68

29836.38

18677.61

25924.83

18933.7

Total Tea Imports To World (Tonnes) 35000 29836.38

30000

25924.83

25000 18933.7

18677.61

20000 15000 10000

9885.68

Total Tea Imports To World (Volume)

5000 0 2003

2004

2005

2006

2007

*SOURCE- CMIE

INTERPRETATION Based on the graph it can be interpreted that the import of tea has alternate ups and downs. The year 2004 has maximum value of import. It was 29836.38 Tonnes in 2004 which was much greater than the value in 2003. In the year 2003 the import value was minimum which was 9885.68 Tonnes. On comparing the values in 2003 and 2007,it can be seen that the value in 2007 was nearly twice that of 2003.

57

COMPARITIVE ANALYSIS OF THE SELECTED TEA CPMPANIES COMPARISION OF TOTAL INCOME Total income (Rs. Crore)

Mar 2004

Mar 2005

Mar 2006

Tata Tea Ltd.

855.93

961.61

1093.9

Assam Co. Ltd.

126.97

150.18

156.64

Goodricke Group Ltd.

197.71

216.31

227.87

Duncans Industries Ltd.

133.84

123.94

189.74

Jay Shree Tea & Inds. Ltd.

202.25

230.82

241.76

TOTAL INCOME(Rs. CR.) 1200

1093.9 961.61

1000

855.93

800

Mar 2004

600

Mar 2005

400 200

126.97

150.18

156.64

197.71

216.31

227.87 133.84

123.94

189.74

202.25

230.82

241.76

Mar 2006

0 Tata Tea Ltd.

Assam Co. Ltd.

Goodricke Group Ltd.

Duncans Industries Ltd.

Jay Shree Tea & Inds. Ltd.

*SOURCE- CMIE INTERPRETATION The above graph shows that the total income of Tata Tea has grown consistently with great extent. In 2004 the total income of Tata Tea was Rs.855.93 Crore which has increased to Rs.1093.9 Crore in 2006. The increase was quite good in 2006 with respect to 2005. Total income of Assam Co. Ltd. has also increased consistently. It was Rs.126.97 Crore in the year 2004 which has increased to Rs.156.64 Crore in the year 2006. The increase was much better in 2005 rather in 2006. Goodricke Group Ltd. has also recorded consistent growth in its income. Total income has reached to Rs.227.87 Crore in 2006 from Rs.197.71 Crore in 2004. The increase was much better in 2005 rather in 2006. Total income of Duncans Industries Ltd. has declined in 2005 with respect to 2004 and has increased in 2006 with respect to 2005. Jay Shree Tea & Industries Ltd. has shown smooth growth in its total income. 58

COMPARISION OF SALES Mar 2004

Mar 2005

Mar 2006

Tata Tea Ltd.

Sales (Rs. Crore)

777.53

893.27

971.01

Assam Co. Ltd.

113.26

138.57

152.24

Goodricke Group Ltd.

193.97

211.29

222.83

Duncans Industries Ltd.

101.53

117.41

168.76

Jay Shree Tea & Inds. Ltd.

182.38

216.15

218.44

1000

893.27

971.01

900 777.53 800 700 600 500 400 300 200 100 0

Mar 2004 152.24 211.29 222.83 216.15 218.44 193.97 168.76182.38 138.57 117.41 113.26 101.53

Mar 2005 Mar 2006

Tata Tea Assam Co. Goodricke Duncans Jay Shree Ltd. Ltd. Group Ltd. Industries Tea & Ltd. Inds. Ltd.

*SOURCE- CMIE INTERPRETATION Based on the above graph it can be interpreted that all the above companies has shown consistent growth in their sales. Tata Tea has shown maximum growth in its sales. Sale of Tata Tea has increased from Rs.777.53 Crore to Rs.971.01 Crore. In the three consecutive year Tata Tea has performed well and recorded maximum sales. Sales of Assam Co. Ltd. has also increased from Rs.113.26 Crore to Rs.152.24 Crore. Maximum growth was recorded in the year 2005 with respect to 2004. Goodricke Group Ltd. has shown slight increase in its sales. From Rs.193.97 Crore in the year 2004, it has reached to Rs.222.83 Crore in 2006. Duncans Industries Ltd. has shown maximum growth in the year 2006 with respect to 2005. Its sales was Rs. 101.53 Crore in 2004 which has reached to Rs. 168.76 Crore. Jay Shree Tea & industries Ltd. has also recorded slight growth in its sales as compared to other tea companies.

59

COMPARISION OF PBT PBT

Mar 2004

Mar 2005

Mar 2006

121.11

162.04

230.52

Assam Co. Ltd.

5.74

3.37

7.78

Goodricke Group Ltd.

3.74

4.93

7.64

-75.42

-84.98

-694.66

3.21

6.33

10.68

Tata Tea Ltd.

Duncans Industries Ltd. Jay Shree Tea & Inds. Ltd.

PBT (Rs. Crore) 400 200 0 Tata Tea Ltd. -200

Assam Co. Ltd.

-400

Goodricke Group Ltd.

Duncans Jay Shree Tea Industries Ltd. & Inds. Ltd.

Mar 2004 Mar 2005 Mar 2006

-600 -800

*SOURCE- CMIE

INTERPRETATION Based on the above graph it can be interpreted that the PBT of Tata Tea has maximum value as compared to other tea companies selected. Duncans Industries Ltd. has shown loss for the three consecutive years. While, Other tea companies which has been selected has very low value of PBT.

60

COMPARISION OF PAT Mar 2004

Mar 2005

Mar 2006

Tata Tea Ltd.

PAT

91.53

128.81

186.93

Assam Co. Ltd.

5.19

3.37

7.45

Goodricke Group Ltd.

3.22

3.76

5.5

-75.42

-84.98

-798.9

3.18

6.29

10.65

Duncans Industries Ltd. Jay Shree Tea & Inds. Ltd.

PAT (Rs. Crore) 400 200 0 -200

Tata Tea Ltd.

Assam Co. Ltd.

-400

Goodricke Group Ltd.

Duncans Industries Ltd.

Jay Shree Tea & Inds. Ltd.

Mar 2004 Mar 2005 Mar 2006

-600 -800 -1000

*SOURCE- CMIE

INTERPRETATION The above graph shows that the PAT of Tata Tea was maximum while that of Duncans Industries Ltd. was minimum. It can be seen that the only company which has shown loss for the years taken is Duncans Industries Ltd.

NET WORTH

61

Net worth

Mar 2004

Mar 2005

Mar 2006

Tata Tea Ltd.

975.26

1048.97

1161.26

Assam Co. Ltd.

215.69

213.43

205.59

Goodricke Group Ltd.

65.12

67.02

69.44

Duncans Industries Ltd.

616.27

555.04

-203.35

Jay Shree Tea & Inds. Ltd.

131.38

134.72

142.73

Net Worth (Rs. Crore) 1400 1200 1000 800

Mar 2004

600

Mar 2005

400

Mar 2006

200 0 -200 Tata Tea Ltd. -400

Assam Co. Ltd.

Goodricke Group Ltd.

Duncans Industries Ltd.

Jay Shree Tea & Inds. Ltd.

*SOURCE- CMIE

INTERPRETATION Based on the above graph it can be interpreted that Tata Tea has the maximum value of net worth for the years taken. Tata Tea has consistently shown growth in the net worth. While Assam Co. Ltd., Goodricke Group Ltd. and Jay Shree Tea & Industries Ltd. have nearly same value of net worth for the three consecutive years. Duncans Industries Ltd. has shown decreasing trend for the three years.

COMPARISION OF TOTAL ASSETS

62

Total assets (Rs. Crore)

Mar 2004

Mar 2005

Mar 2006

Tata Tea Ltd.

1432.55

1540.2

1703.53

Assam Co. Ltd.

437.95

472.73

722.35

Goodricke Group Ltd.

142.05

149.04

232.29

Duncans Industries Ltd.

2060.71

2004.94

1268.58

Jay Shree Tea & Inds. Ltd.

285.28

298.25

322.87

Total Assets (Rs. Crore) 2500 2000 Mar 2004

1500

Mar 2005 1000

Mar 2006

500 0 Tata Tea Ltd.

Assam Co. Ltd.

Goodricke Group Ltd.

Duncans Jay Shree Tea Industries Ltd. & Inds. Ltd.

*SOURCE- CMIE

INTERPRETATION Based on the graph it can be interpreted that the Duncans Industries Ltd. hasmaximum value of Total assets for the years 2004 and 2005. Tata Tea has maximum value as compared to others in the year 2006.

GROWTH (%) IN TOTAL INCOME

63

Total Income

Mar 2004

Mar 2005

Mar 2006

Tata Tea Ltd.

2.57%

12.35%

13.76%

Assam Co. Ltd.

-5.49%

18.28%

4.30%

Goodricke Group Ltd.

4.34%

9.41%

5.34%

-80.99%

-7.40%

53.09%

9.29%

14.13%

4.74%

Duncans Industries Ltd. Jay Shree Tea & Inds. Ltd.

Growth (% ) in Total Income 60.00% 40.00%

Tata Tea Ltd.

20.00% 0.00% -20.00%

Mar 2004

-40.00% -60.00% -80.00% -100.00%

Mar 2005

Mar 2006

Assam Co. Ltd. Goodricke Group Ltd. Duncans Industries Ltd. Jay Shree Tea & Inds. Ltd.

*SOURCE- CMIE

INTERPRETATION Based on the graph it can be interpreted that growth (%) in total income was maximum for Jay Shree Tea & Industries Ltd. in 2004. Growth (%) for Tata Tea was increased greatly in 2005 with respect to 2004 and then slightly in 2006. Duncans Industries Ltd. has shown enormous growth in its total income from 2004 to 2006. Assam Co. Ltd. and Goodricke Group Ltd. have shown ups and downs.

COMPARISION ON THE BASIS OF GROWTH (%) IN PBDITA

64

PBDITA

Mar 2004

Mar 2005

Mar 2006

7.02%

22.73%

34.54%

-11.26%

8.73%

12.06%

NA

18.69%

17.42%

Tata Tea Ltd. Assam Co. Ltd. Goodricke Group Ltd. Duncans Industries Ltd. Jay Shree Tea & Inds. Ltd.

NA

NA

NA

-27.80%

24.03%

30.37%

Growth (% ) in PBDITA 40.00%

Tata Tea Ltd.

30.00% 20.00%

Assam Co. Ltd.

10.00% 0.00% -10.00%

Mar 2004

Mar 2005

Mar 2006

Goodricke Group Ltd.

-20.00% -30.00%

Jay Shree Tea & Inds. Ltd.

-40.00%

*SOURCE- CMIE

INTERPRETATION The above graph shows that the PBDITA has continuously grown for three consecutive years for Tata Tea, Assam Co. Ltd. and Jay Shree Tea & Industries Ltd. Jay Shree Tea & Industries Ltd. has shown good growth rate in its PBDITA.

COMPARISION ON THE BASIS OF GROWTH (%) IN PAT

65

PAT

Mar 2004

Mar 2005

Mar 2006

Tata Tea Ltd.

29.65%

40.73%

45.12%

Assam Co. Ltd.

20.14%

-35.07%

121.07%

Goodricke Group Ltd.

NA

16.77%

46.28%

Duncans Industries Ltd.

NA

NA

NA

-60.25%

97.80%

69.32%

Jay Shree Tea & Inds. Ltd.

Growth (%) in PAT 140.00% 120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% -20.00% -40.00% -60.00% -80.00%

Tata Tea Ltd.

Assam Co. Ltd.

Mar 2004

Mar 2005

Mar 2006

Goodricke Group Ltd. Jay Shree Tea & Inds. Ltd.

*SOURCE- CMIE

INTERPRETATION Based on the above graph it can be interpreted that the Assam Co. Ltd. has shown enormous growth in its PAT for the year 2006 with respect to 2004.Tata Tea has shown consistency. Jay shree Tea & Industries Ltd. has shown great growth in 2005 with respect to 2004 but its PAT has decreased in 2006.

FINDINGS

66

On the basis of the analysis of Tea Industry of India and different aspects of selected companies the following findings can be listed:

1.

The production of tea in India is heavily depends on the production in North India.

2.

The North India is the dominating region in tea production over South region.

3.

India has recorded continuous growth in export of tea for the year 2003 to 2006.

4.

India has recorded alternate ups and downs in import of tea.

5.

Among the selected tea producing companies Tata has emerged as the biggest tea producer campany for last five years.

6.

Tata has continuously recorded growth in its total income, total sales and profit after tax among the selected tea producing companies.

67

CONCLUSIONS

CONCLUSIONS

68

In India tea is the main beverage for each and every household. Tea production in India is mainly dependent in the production in North India as compared to South India. North India is the main region for tea production in India. Tata tea is the leader among the selected tea producing companies. Tea industry in India has shown great flourishment in last few years.

69

LIMITATIONS

70

LIMITATIONS Though this study provides better knowledge about the tea industry but still it have some limitations. Following are the main limitations: 1.

Due to lack of knowledge, study could not be so deep.

2.

Due to short time span, study could not be so deep.

3.

Due to data collected much earlier of submission of project report, the most current data could not be well presented.

4.

Only CMIE has been used as a source of data.

5.

Some data are not available for some companies.

71

BIBLIOGRAPHY

72

BIBLIOGRAPHY 1.

Centre for Monitoring Indian Economy.

2.

Internet has been used extently.

3.

www.tatatea.com

73

ANNEXURE

74

ANNEXURE

FINANCIAL PERFORMANCE OF THE FOLLOWING SELECTED TEA PRODUCING COMPANIES:-

TATA TEA ASSAM CO. LTD. GOODRICKE GROUP LTD. DUNCANS INDUSTRIES LTD. JAY SHREE TEA & INDUSTRIES LTD.

75

TATA TEA Tata Tea Ltd. Rs. Crore (Non-Annualised) Total income Sales Income from financial services

Mar 2003 12 mths

Mar 2004 12 mths

Mar 2005 12 mths

Mar 2006 12 mths

Mar 2007 12 mths

834.46 748.43 66.64

855.93 777.53 64.88

961.61 893.27 56.62

1093.9 971.01 65.96

1295.47 1056.38 218.4

762.08 120.19 41.7 161.44 12.06 90.95 110.09

745.04 118.22 44.4 252.55 13.54 96.19 106.62

862.13 204.46 47.42 164.86 12.86 101.62 105.72

895.35 243.27 43.57 133.76 7.24 121.89 69.19

1004.49 328.46 39.72 135.52 7.83 127.3 63.11

0

0

0

0

0

150.75 122.75 100.1 70.6

161.33 143.15 121.11 91.53

198 184.03 162.04 128.81

266.38 249.95 230.52 186.93

413.75 368.31 349.77 306.57

Net worth Paid up equity capital (net of forfeited capital) Reserves & surplus

978.63

975.26

1048.97

1161.26

1543.73

56.22 922.41

56.22 919.04

56.22 992.75

56.22 1105.04

59.03 1484.7

Total borrowings Current liabilities & provisions

225.39 215.98

197.36 210.58

191.37 265.97

241.35 272.37

818.83 332.89

1471.78 522.24 332.63 748.47 230.66 105.13

1432.55 518.74 312.89 835.45 195.02 76.84

1540.2 528.16 302.7 865.85 292.02 33.99

1703.53 428.9 250.3 1106.83 260.52 46.1

2723.47 441.11 246.6 2045.92 350.52 36.44

0.73274665

2.57292141 2.23598572 7.01824212

12.3468041

13.7571365

18.42673

15.7159347 22.7298085

3.85324719 34.5353535

12.1896465 55.3232225

29.6458924

40.7298154

45.1207204

64.0025678

4.10797353 -2.6654799

4.11055171 7.51457192

11.3994701 10.604467

35.359126 59.8721478

Total expenses Raw material expenses Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises PBDITA PBDTA PBT PAT

Total assets Gross fixed assets Net fixed assets Investments Current assets Loans & advances Growth (%) Total income Total expenses PBDITA PAT Net worth Total assets

1.91232716 6.77101778 1.88993885 3.07052361 3.4890589

ASSAM CO. LTD.

76

Assam Co. Ltd. Rs. Crore (Non-Annualised) Total income Sales Income from financial services

Mar 2003 15 mths

Dec 2003 9 mths

Dec 2004 12 mths

Dec 2005 12 mths

Dec 2006 12 mths

144.39 136.25 6.33

100.76 99.99 0.18

126.97 113.26 7.89

150.18 138.57 5.27

156.64 152.24 3.19

125.08 0 12.15 35.28 3.22 7.61 29.63

103.68 0 11.57 23.55 3.54 12.17 26.86

126.18 0 13.15 33.6 4.24 14.6 24.54

145.26 0 15.72 41.57 3.47 9.8 32.72

149.58 0 16.84 43.43 3.91 12.87 34.92

0

0

0

0

0

30.56 11.53 5.58 5.48

21.4 6.76 3.4 3.24

25.32 5.76 1.74 5.19

27.53 7.19 3.37 3.37

30.85 11.41 7.78 7.45

Net worth Paid up equity capital (net of forfeited capital) Reserves & surplus

212.12

213.22

215.69

213.43

205.59

22.36 189.67

22.36 190.77

22.36 193.24

22.36 191.07

22.36 183.23

Total borrowings Current liabilities & provisions

143.72 36.36

149.13 42.2

168.2 54.06

184.06 67.52

442.94 68.74

Total assets Gross fixed assets Net fixed assets Investments Current assets Loans & advances

395.77 444.85 324.42 0.37 69.46 1.52

408 447.82 321.94 0.19 83.28 2.59

437.95 461.92 330.58 0.3 104.78 2.29

472.73 479.83 344.02 0.4 117.73 2.86

722.35 527.74 386.34 7.68 316.29 6.96

18.2799086

4.30150486

15.1212553

2.9739777 12.0595714

20.1388889

8.72827804 35.0674374

4.24542703

4.90855681

0.65938036

121.068249 5.12383345

4.14131476

7.34068627

7.94154584

52.8039261

Total expenses Raw material expenses Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises PBDITA PBDTA PBT PAT

Growth (%)

Total expenses

6.48477778 15.8153598

PBDITA

11.8684246

PAT

57.7375503 6.24049521 16.2116198

Total income

Net worth Total assets

22.3112457 53.8654652 22.8793477 1.94172062

5.49077015 8.72395833 11.2616822

GOODRICKE GROUP LTD. Goodricke Group Ltd.

Dec 2003

Dec 2004

Dec 2005

Dec 2006

Dec 2007

77

Rs. Crore (Non-Annualised) Total income Sales Income from financial services

12 mths

12 mths

12 mths

12 mths

12 mths

189.49 184.77 0.31

197.71 193.97 0.31

216.31 211.29 0.39

227.87 222.83 0.21

241.82 237.81 1.28

188.13 23.88 17.18 81.72 4.25 16.46 0 0

205.42 29.12 19.68 79.3 3.9 15.78 0 0

216.74 34.9 21.23 80.65 1.46 18.36 0 0

221.18 37 19.63 89.42 1.23 18.13 0 0

234.63 38.75 21.01 98.69 1.74 18.07 0 0

PBDITA PBDTA

-0.67 -3.43

11.56 9.09

13.72 10.6

16.11 13.11

20.12 16.29

PBT PAT

-8.28 -8.28

3.74 3.22

4.93 3.76

7.64 5.5

10.39 7.66

Net worth Paid up equity capital (net of forfeited capital) Reserves & surplus

63.12 21.6 41.52

65.12 21.6 43.52

67.02 21.6 45.42

69.44 21.6 47.84

69.06 21.6 47.46

Total borrowings Current liabilities & provisions

18.55 44.69

31.21 40.6

38.47 39.01

31.75 126.92

34.15 142.15

131.44 117.64 48.35 0.54 82.24 0.01

142.05 120.65 47.1 0.06 94.38 0.16

149.04 126.4 47.64 0.04 100.95 0.26

232.29 129.19 45.19 0.05 186.75 0.15

249.36 138.67 49.45 0.01 198.86 0.1

2.1454369 2.46732026 Error Error -11.4680192 -10.8034745

4.33795979 9.19045341 Error Error 3.40547422 8.07212416

9.40771838 5.51066108 18.6851211 16.7701863 3.13942752 4.92080253

5.34418196 2.04853742 17.4198251 46.2765957 3.61086243 55.8574879

6.12191162 6.08101998 24.8913718 39.2727273 -0.54723502 7.3485729

Total expenses Raw material expenses Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises

Total assets Gross fixed assets Net fixed assets Investments Current assets Loans & advances Growth (%) Total income Total expenses PBDITA PAT Net worth Total assets

JAY SHREE TEA & INDUSTRIES LTD. Jay Shree Tea & Inds. Ltd. Rs. Crore (Non-Annualised) Total income Sales

Mar 2003 12 mths 185.06 167.11

Mar 2004 12 mths 202.25 182.38

Mar 2005 12 mths 230.82 216.15

Mar 2006 12 mths 241.76 218.44

Mar 2007 12 mths 262.15 244.45

78

Income from financial services

9.25

16.79

10.58

21.04

14.11

175.02 30.39 15 64.66 9.18 10.85 0.12

195.91 35.17 16.18 67.71 10.17 11.17 1.86

222.53 40.67 18.54 70.68 10.61 11.48 0.04

232.29 45.33 20.23 75.85 9.5 13.75 0

256.78 45.51 20.61 76.14 8.57 17.52 0

0

0

1.06

1.11

0.83

20 12.57 8.22 8

14.44 8 3.21 3.18

17.91 11.8 6.33 6.29

23.35 16.4 10.68 10.65

20.68 12.18 5.92 5.63

134.78

131.38

134.72

142.73

145.78

10.67 124.11

10.68 120.7

10.68 124.04

10.67 132.06

10.67 135.11

81.04 27.25

97.01 39.42

110.39 35.41

123.19 39.22

143.25 30.26

260.04 160.2 97.86 62.56 59.87 29.26

285.28 165.05 101.77 79.91 76.61 15.87

298.25 168.73 101.89 78.93 88.01 18.52

322.87 177.25 106.4 99.95 91.8 14.34

333.39 190.74 115.23 105.86 91.69 13.92

9.76275208 6.55707763

9.28887928 11.9357788

14.1260816 13.587872

4.73962395 4.38592549

PBDITA

81.4882033

-27.8

24.0304709

30.3740927

PAT

Error

97.7987421

69.3163752

Net worth Total assets

5.76648841 8.04387569

-60.25 0.96064717 9.70619905

8.43398412 10.5428559 11.4346895 47.1361502

3.72670807 4.54641054

7.32507588 8.25481978

2.65973708 3.25827733

Total expenses Raw material expenses Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises PBDITA PBDTA PBT PAT Net worth Paid up equity capital (net of forfeited capital) Reserves & surplus Total borrowings Current liabilities & provisions Total assets Gross fixed assets Net fixed assets Investments Current assets Loans & advances Growth (%) Total income Total expenses

DUNCANS INDUSTRIES LTD. Duncans Industries Ltd. Rs. Crore (Non-Annualised) Total income Sales Income from financial services Total expenses

Mar 2003 18 mths

Mar 2004 12 mths

Mar 2005 12 mths

Mar 2006 12 mths

Mar 2007 12 mths

1056.22 868.96 42.45

133.84 101.53 8.19

123.94 117.41 1.54

189.74 168.76 15.95

107.08 102.79 2.31

979.49

209.22

208.25

988.49

311.14

79

Raw material expenses Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises

208.9 106.24 145.83 6.12 83.64 0

10.18 12.43 70.31 2.99 4.42 0

12.26 13.56 69.25 2.44 3.89 0

86.82 60.55 84.77 1.12 6.66 0

12.36 53.67 84.15 1.3 4.11 0

0

0

0

0

0

100.08 -79.23 -104.35 -104.35

-2.37 -59.86 -75.42 -75.42

-26.7 -70.85 -84.98 -84.98

-618.9 -680.72 -694.66 -798.9

-135.9 -190.14 -203.92 -204.14

Net worth Paid up equity capital (net of forfeited capital) Reserves & surplus

672.79

616.27

555.04

-203.35

-644.28

53.22 558.14

53.22 475.75

53.22 383.79

53.22 -422.07

53.22 -872.99

Total borrowings Current liabilities & provisions

930.64 476.71

910.15 498.77

909.07 491.96

958.99 512.94

1015.75 560.6

2117.41 895.29 763.92 355.3 836.15 34.8

2060.71 894.28 742.37 355.23 791.1 32.33

2004.94 897.5 724.56 345.23 730.96 51.16

1268.58 899.92 706.37 339.98 202.12 19.84

958.83 617.23 403.07 339.34 170.49 18.84

31.9778459 38.7297866 45.2038274 Error 12.9676711 7.06333985

80.9925962 67.9598567

7.39689181

53.0902049

-0.4636268

374.665066

43.5648783 68.5237079

Error Error

Error Error

Error Error

Error Error

18.4694034 2.67779976

25.5763519 2.70634878

Error

Error

36.7272836

24.4170647

PBDITA PBDTA PBT PAT

Total assets Gross fixed assets Net fixed assets Investments Current assets Loans & advances Growth (%) Total income Total expenses PBDITA PAT Net worth Total assets

80