Tata Coffee Ltd: A Jewel in the making

Market price of stock had crashed to Rs. 1010/-  on 12.6.2013 from Rs. 1450/- without any fundamental reasons. Has reported an EPS of Rs. 62.23 for financial year 2012-2013. A Tata group company and a jewel in the making. The price will bounce back to Rs. 1400/- to Rs. 1600/- range shortly. 

Company's Vision statement states that it will be a Rs.1000 Cr. enterprise by the year 2015. Current stand alone turnover is Rs. 600 Cr.

Its stand alone 20% business consists of plantation and 60% from Instant Coffee.

Tata Coffee is arguably the largest integrated coffee plantation company in the world .It has a hand in every aspect of the coffee making process, with business activities ranging from growing and curing of coffee and tea to the manufacture and marketing of value-added coffee products. Tata Coffee grows coffee on its own estates, processes the beans, exports green coffee , manufactures and exports Instant Coffee and retails coffee with its own branding in the domestic market. Tata Coffee is third largest exporter of coffee.

Update: As on 19.6.2013

It has commissioned a premium coffee extraction plant at its instant coffee manufacturing unit at Theni in Tamil Nadu at an investment of Rs 70 crore on 19.6.2013. Tata Coffee's instant coffee division, located 170 kms from Tuticorin port, has an installed capacity of 4,000 tonne per annum. The 100 percent export oriented unit produces and exports spray dried agglomerated and freeze dried instant coffee. The new extraction plant will add 2,000 tonne to the existing capacity (at the unit). The new extraction plant will help the company position its freeze dried coffee product at premium levels and increase the overall instant coffee capacity by over 30 percent, it added. The company has two instant coffee manufacturing facilities -- Andhra Pradesh and Tamil Nadu--with a combined installed capacity of 6,400 metric tonnes, which will increase by over 30 percent to 8,400 metric tonnes.

"Its expertise in the bean to brew value chain, efficient processes and focus on sustainability has helped   maintain a strong leadership position in the coffee business.

The expansion of Theni instant coffee facility illustrates strong commitment to providing world-class premium coffees to  customers worldwide," Tata Coffee Managing Director Hameed Huq said.

Up date on 21.6.13

The Latin American state is the world's top coffee grower and mainly produces the aromatic arabica variety used by Starbucks Corp. Robusta is either blended with arabica beans for lower-cost brewed coffee or processed into instant coffee.

 Vietnam is the world's number one producer of robusta. Robusta coffee beans is used in biscuits and drinks.



For more details visit, www.tatacoffee.com


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Up date as on 22.6.2013

India's organised cafe market is approx. valued at around US$185 million, and is estimated to be growing at a compound annual rate of 25%. India's growing youth segment, around 50% of India's 1.2 billion people are 25 or younger. By 2015, this is expected to increase to 55%. This segment of young indians is expected to be the driver of cafe revolution in the coming years.

The Indian market  has the potential to touch US$800 million to US$900 million with a total of 5,000 (currently around 1500) cafés by 2015. The nation's per capita consumption of coffee is just 85 grams, compared to 4.5 kilograms in France, 4.6 kilograms in Japan and 6 kilograms in the U.S.

The Indian Coffee Board's numbers reveal that while India is the sixth largest coffee producer in the world, with an annual output of 300,000 tons, domestic consumption is only a third, or 100,000 tons. That is because like most of Asia, India is predominantly a tea drinking nation. Coffee is a staple only in the southern part of the country.

With 17,000 stores in 55 countries, including 426 in China, Seattle-headquartered Starbucks has signed an agreement with Tata Coffee, India's largest coffee producer, in January'12. Starbucks will source and roast green coffee beans from Tata Coffee and will also set up retail outlets in partnership with the Tatas. 

Tata Starbucks Ltd is a 50:50 joint venture company, owned by Starbucks Corporation and Tata Global Beverages, that owns and operates Starbucks outlets in India. The outlets are branded Starbucks Coffee "A Tata Alliance". Starbucks, through an agreement with Tata Coffee, serves coffee that is 100% locally sourced and roasted.

On 19 October 2012, Starbucks opened its first store in India, measuring 4500 sq ft in Elphinstone Building, Horniman Circle, Mumbai. Starbucks expanded its presence to Delhi on 24 January 2013 by opening 2 outlets at Terminal III of the Indira Gandhi International Airport, and later one in Connaught Place.

Initially, Starbucks opened a combination of standalone outlets located at malls, airports and metro stations, and commercial complexes. The company plans to expand its retail footprint in India by opening outlets in hospitals, near gyms or health stores, educational institutions and corporate campuses. The decision to open outlets inside Tata-owned retail stores and properties would depend on the brand's premium positioning.

As of June 2013, Starbucks operates 15 outlets in 2 cities (Delhi & Mumbai) of India. The company plans to have 50 outlets in India by the end of 2013.

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