By Express News Service
KOLKATA: Tata Global Beverages Ltd on Thursday said it would exit loss-making subsidiaries and has lined up investments of Rs150 crore in addition to the ongoing capital expenditure of Rs 300 crore to scale up operations.
The company, however, would have to maintain subsidiaries in certain locations, owing to legal issues, Chairman N Chandrasekaran told shareholders at the 55th annual general meeting here. "The whole idea is to have subsidiaries which can be scaled up and are profitable," he added. Speaking on profitability, Chandrasekaran said, it is important to pick up growth rate and grow profitably.
“So there will be a focus to bring growth in the India market by a combination of focusing on market share, number of new products that reflect the macro trend. A mix of the product portfolio is critical and is going to be a big focus for us," he added. The growth, he said, could be either organic or inorganic.
Tata Global Beverages' market share in the domestic tea market was 20 per cent, while it was three to four per cent for coffee. Regarding the Tata Starbucks outlets, he said that each store takes two to three years to achieve break even, but the coffee chain as a corporation had already achieved the same.
In his speech to the shareholders, Chandrasekaran said the company posted a flat revenue growth of one per cent in the last fiscal. Referring to international markets, he said growth continued to suffer because of marginal presence in many overseas countries.
Even though in volume terms, the company continued to be "number one" in the Indian market, the same was not true in value terms, he said. On prospects in West Bengal, the top company official said the Tata Group is committed to the state and looking for the "right opportunity" in terms of investment.
"We have a good presence of TCS and companies like TGBL and Starbucks are present (in West Bengal). When the opportunity comes, we will definitely invest in the state," Chandrasekaran added.
