Tata Global Bevarages

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TATA GLOBAL BEVARAGES





Introduction

Tata Tea was formed in 1983.

Headquartered in Kolkata, India. Set up in 1964 as a joint venture with UK-

based James Finlay.

Tata Tea has been involved in the tea extract business for last 40 odd years.



Ground breaking f acts.

Worlds second largest.

Largest in India, UK, Canada, Czech Republic.

Second largest in U.S.A. 70 million kilograms of tea in India.

controls 54 tea estates,

ten tea blending, packaging f actories employs around 59,000 people.



Bought leaf factories & co-operatives to change the structure of green leaf

production

Un-remunerative operations are 1st given the opportunity to transform and

if not hived off

Re-organisation of 20 tea estates in clusters of 5

µjaago re¶ campaign.

Exiting barista.

Introducing TiON drink .

Business Level Strategies



Mergers and acquisitions

In 1983, Tata Tea bought the stake belonging

to the James Finlay group to f orm the

individual entity Tata Tea

In 2000. Tetley tea £271 million ($432 million)

buyout.



Acquisitions and JV¶SEntity Year of

formation

Status Role

Tata Tea, Inc,

USA

1987 100 per cent

subsidiary

To process and market instant tea from

its facility in Florida, based on sourcing

of products from facility at Munnar

Consolidated

Coffee Ltd

(Tata Coffee Ltd)

1991 Acquisition of 52.5

per cent stake

To diversify into coffee via a company

which wasAsia's largest seller of coffee

Estate

Management

Services (P)

Limited,

Sri Lanka

1992 Joint venture To manage 22 plantation companies

involved in tea, rubber, coconut and

palm oil, that were privatised by the Sri

Lankan

government



Tata Tetley, India

(merged with Tata

Tea with effect from

April 1, 2005)

1993 100 per cent subsidiary Kochi-based EOU that services the

branded business of specific Tetley and Tata

Tea markets outside India

Asian Coffee Ltd

(later merged with

Tata Coffee)

1995 Acquisition of 55 per

cent stake

To get into selling instant coffee globally

Watawala

Plantations

Limited, Sri Lanka


cent stake through

EMSPL

Production and marketing of tea, oil palm

and rubber in Sri Lanka

Tata Tea (GB)

Limited

2000 100 per cent subsidiary Special Purpose Vehicle (SPV) established

for the acquisition of Tetley, UK

Tetley Clover Pvt

Ltd.,

Pakistan

2003 50:50 joint venture of

Tetley with Lakson

group in Pakistan

To import and sell tea in Pakistan as well as

build a tea blending factory inBaluchistan



Tetley ACI,

Bangladesh

2003 50:50 joint venture of

Tetley withAdvanced

Chemical Industries (ACI)

in Bangladesh

To distribute Tetley's products in

Bangladesh

Good Earth, USA 2005 Acquisition of 100 per

cent stake by Tetley

Establish Presence in the US and

acquisition of strong product portfolio

Jemca, Czech

Republic


cent stake by Tetley

Market Leadership in Czech republic with

a product portfolio which goes across both

mainstream and speciality

8¶ O Clock Coffee,

USA

2006 Acquisition of more than

50 per cent stake, Tata

Coffee

and Tata Enterprises

Overseas

To help establish global presence

in coffee and facilitate movement

up the value chain

Glaceau, USA 2006 30 per cent minority stake

alongwith Tata Sons

Presence in unfolding crossover space of

the beverages market through enhancedwater



f inancial perf ormance

Prof it 2009/10 : 391 CR

Prof it 2010/11 : 180 CR

±

REASONS WE CAME ACROSS:- Higher wages.

Payment of loans.

Higher commodity charges.

Expensive raw material.



Income



Exceptional items

Our estimate on actual net prof it is :

161-89(exceptional items)=71Cr.



Earning per share

Total earning per share in 2010-2011- Rs.4.11/- Dividend paid- Rs.2/-

Face value of share- Rs.1/-

200% dividend.

HEAD Quarter 1 : 2011 Quarter 1 : 2010

Total operating income 1467 1378

Net prof it 161 46

Earning per share 2.66 0.58

EPS excluding exceptional

items

0.74 0.58



Stock Movement



Price to earning ratio

P-E ratio =stock price/ earning per share.

EPS is of last 4 quarters.

High p-e ratio = positive expectations TGB P/E ratio in june 2011=15.05.

TGB current P/E=17.2

BSE standard- ± Above 20= overvalued.

± 5 to 20 = good.

± Below 5 = risky.



Problems that plaque TGB.

High raw material cost.

Expensive power.

Labor unrest in Maoist aff ected areas.

Inability to increase branded tea price in

ref lection to actual commodity price.



Coff ee commodity price



David vs goliath

Tata global beverages annual turnover $1.5

billion (USD). (2009/10).

Lipton-brooke bond:- $4 billion (2009/10)



Competitors with their Market Share & Profit:

Market Cap.

(Rs. cr.)

Net Profit

(year 2008-09)

Tata Tea 5,239.07 159.06

Mcleod Rus 2,196.78 88.79

Tata Coffee 593.84 18.64

Assam Company 503.36 -2.82

Bombay Burmah 411.65 -13.88

Jayshree Tea 326.29 13.88

CCL Products 206.06 19.00

Harrisons Malay 191.84 6.04

Dhunseri Tea 179.18 16.66

Duncans Ind 50.83 -38.61



Alliances f or f uture growth

Acquired 31%* on a f ully diluted basis of Rising Beverages LLC which

manuf actures and markets a range of vitamin and f lavour enhanced water

using unique powder dispensing

technology, under the Activate brand Signed JV with Pepsi-Co in the area of

non-carbonated, RTDs f ocused on

health and enhanced wellness. Named

NourishCo Beverages

Tata Global Beverages Ltd & KeralaAyurveda Limited sign MOU to form

JV f or Product Development



Upcoming products



Why buy TGB?

Restructured debt.

2011 q1 prof it of 166 Cr compared to 2010/11

entire year prof it of 180 Cr. Payment of 200% dividend f rom past 3 years.

High earning per share.



Q uestions????

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Tata Global Bevarages

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