Tata Coffee to set up plant
in Uganda with Tata Africa
Business Standard - March
Tata Coffee will partner with Tata Africa
and a financial institution for its coffee
plant venture in Uganda. The company is
planning a 3,600 tonne coffee plant in Uganda.
Tata Coffee Managing Director M H Ashraff
said the three entities would have an equal
share in the joint venture. A senior Tata
Coffee team would be visiting Uganda to
hold discussions with the government there
on the project. Ashraff said the project
should be able to go on stream in one year.
In the home market, Tata Coffee's freeze
dried coffee plant was expected to start
production in September-October.
The capacity of the freeze
dried plant at Madurai would be around 2,000
tonne. Ashraff said the plant would be a
100 per cent export-oriented unit and would
service high-end markets in Europe and Russia.
The move would mark Tata Coffee's foray
into the European markets, as the company
is at present mainly focused on Russia and
CIS countries. The company's combined investment
in the two ventures is pegged at Rs 125
crore. Tata Coffee recently announced that
its board would meet to raise funds through
a rights issue.
Ashraff said the details
of how much of the investment would be funded
through the rights issue have not yet been
worked out, adding that the board is yet
to approve the rights issue proposal. However,
Tata Coffee has no plans for making any
further investment in the plantations business.
Last year, the company acquired six estates,
inclusive of net current assets, in south
India from Tata Tea for Rs 55 crore. Ahsraff
said Tata Coffee is a plantation company
and with the expertise it would remain so,
"having multi-cropping acts as a hedge".
Tata Coffee's stance is
different from that of its parent company
Tata Tea, which is in the process of exiting
the plantations business. The company divested
its holding in its south India plantations
operations and is currently drawing up a
strategy for the north India plantations.