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Tata Tea buys stake in South African company
By siliconindia
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Thursday, 05 October 2006, 19:30 IST
Mumbai: Tata Tea, India's largest tea manufacturer and the world's second largest branded tea company, on Thursday signed a deal to acquire 33 percent of South Africa's third largest tea producer Joekels Tea packers.
Tata Tea owned by the Tata Group, which already has a presence in South Africa through its subsidiary, the Tetley Group.
Besides, the group already has a major presence in the country in businesses like automobiles, steel, telecom and hotels among others.
The move to acquire Joekels, according to a Tata Group spokesperson, was the company's strategy to expand its presence globally.
"For the Tata group, South Africa is one of the key markets that it would like to have a significant footprint in. The Tetley Group has funded the acquisition," a Tata spokesman told IANS in Mumbai Monday.
"Joekels is the third largest player in the South African tea market with a five percent value share of the market and turnover of $5 million. The company is owned and run by Jonathan Kelsey and Joe Swart, who founded it in 1994," the company said in a statement.
Joekels manufactures and sells a strong portfolio of brands spanning the economy and mainstream tea sectors.
"Joekels will have a licence to sell Tetley branded products in South Africa, Namibia, Botswana, Lesotho and Swaziland. They will produce these at their factory in Pinetown, Kwazulu Natal province," the statement added.
"This acquisition is yet another development in our plan to grow the Tata Group's tea business around the world. It establishes a presence for Tetley in South Africa and some of its neighbouring countries," said Ken Pringle, Tetley Group executive vice-chairman and chief executive officer.
Though, the spokesperson, declined to disclose the details of costs involved in the acquisition, he said apart from South Africa, the tea major is looking at China and Russia among other markets.
"In China, we are looking to produce and market green tea and instant tea through a joint venture partner and we are currently test marketing Tetley in Russia, one of the largest tea markets in the world consuming approximately 140,000 tonnes per annum," he disclosed.
Over the years, the tea major has been transforming itself from being a commodity player to a branded one.
Today, branded tea contributes to over 85 percent of its consolidated revenues of 
30.77 billion. It has been reducing its interests in plantations and has been building its branded tea portfolio through acquisitions, industry official here said.
The company's global ambition came to light when it first acquired a controlling stake in the Britain-based Tetley Group for $407 million in 2000. This deal catapulted Tata Tea into its global prominence.
Five years later in 2005, it surged forward to pick up US-based Good Earth Corporation for an acquisition value of $32 million.
In May this year, the emerging branded tea major picked up JEMCA in the Czech Republic.
A month later, in August, it acquired 30 percent stake in the US-based favoured water manufacturer Glaceau, paying $677 million.
"To complete the Glaceau acquisition, Tata Tea is raising $700 million. Standard Chartered and ICICI Bank are aiding the company to raise the funds," an official said.
Meanwhile, Tata Tea's shares rose by one percent at 743.90 in the Bombay Stock Exchange Thursday.
30.77 billion. It has been reducing its interests in plantations and has been building its branded tea portfolio through acquisitions, industry official here said.
The company's global ambition came to light when it first acquired a controlling stake in the Britain-based Tetley Group for $407 million in 2000. This deal catapulted Tata Tea into its global prominence.
Five years later in 2005, it surged forward to pick up US-based Good Earth Corporation for an acquisition value of $32 million.
In May this year, the emerging branded tea major picked up JEMCA in the Czech Republic.
A month later, in August, it acquired 30 percent stake in the US-based favoured water manufacturer Glaceau, paying $677 million.
"To complete the Glaceau acquisition, Tata Tea is raising $700 million. Standard Chartered and ICICI Bank are aiding the company to raise the funds," an official said.
Meanwhile, Tata Tea's shares rose by one percent at 743.90 in the Bombay Stock Exchange Thursday.