WARREN TEA Ltd.

INDIA
New Market Entry In Russia

By
VARUN
ANKUR
PRATEEK
NEHA
RASHI
Company Information
Date of Establishment : 1977
Revenue : 44.4407 ( USD in Millions )
Market Cap : 1671.426588 ( Rs. in Millions )
Corporate Address : Deohall Tea Estate,P O Hoogrijan, Tinsukia Dist-
786601, Assam
Management Details : Chairperson - A K Ruia
MD - S K Ghosh
Directors - A K Ruia, G Bhalla, N Dutta, N
Musry, P K Bose, R Magotra, S Bhoopal, S K
Ghosh, S Sarma, Siddhartha Roy, U C Arora, U C
Sarmah, Vinay K Goenka, Vivek Goenka
Business Operation : Tea/Coffee

Financials : Total Income - Rs. 2026.827 Million

( year ending Mar 2010)
Net Profit - Rs. 222.747 Million ( year
ending Mar 2010)

Company Secretary : Siddhartha Roy

Auditors : Price Waterhouse & Co.

 Company Background
•• The
The Company
Company was
was incorporated
incorporated on
on 31st
31st May
May 1977
1977 in
in the
the state
state of
of Assam
Assam

•• Warren
Warren Tea
Tea Limited
Limited isis the
the flagship
flagship of
of the
the Warrens
Warrens group
group

•• Cultivation
Cultivation of
of tea
tea plantations,
plantations, manufacture
manufacture of
of machinery
machinery for
for processing
processing tea
tea

•• Carry
Carry on
on the
the business
business as
as warehousemen,
warehousemen, shippers
shippers and
and exporters
exporters

•• 14
14 tea
tea estates
estates with
with total
total planted
planted area
area under
under tea
tea measuring
measuring about
about 6,078
6,078 ht.
ht.

•• Warren
Warren Tea
Tea Limited
Limited produces
produces 16
16 million
million kg
kg of
of tea
tea annually
annually

•• The
The produce
produce of
of the
the Company
Company isis savoured
savoured across
across 50
50 countries
countries
•• One
One of
of the
the largest
largest bulk
bulk tea
tea producers
producers in
in India
India and
and in
in the
the world
world
 5

Current International Business

Target
RUSSIA

The company exports its products to the United Kingdom, Germany,

Ireland, North America, Pakistan, Iran, and the Middle East.
Why Go GLOBAL?
Domestic
Domestic
Lower
Lower costs
costs and
and 70%
70% of
of Russians'
Russians' competition
competition
higher
higher prices
prices -- income
income isis entering
entering
opportunities
opportunities for
for disposable
disposable vs.
vs. international
international
profit
profit around
around 40%
40% in
in the
the markets.
markets.
West
West “Competitive
“Competitive
response.”
response.” Eg:
Eg:
Competitive
Competitive Tata
Tata Tea’s entry in
Tea’s entry in
advantages
advantages in
in new
new to
to the
the U.S.,
U.S., China,
China,
To
To increase
increase sales,
sales,
markets
markets and
and other
other global
global
revenues,
revenues, andand markets;
markets; J.V.
J.V.
profits
profits Gokal’s
Gokal’s entry
entry in
in to
to
Limited
Limited or
or the Russian
the Russian
declining
declining home
home market.
market.
market
market

Global
Global consumers'
consumers'
Excess
Excess capacity
capacity tastes
tastes are
are
converging.
converging. Easier
Easier
Russia: to offer a globally
to offer a globally
Russia: top
top
location standardized
standardized
location for
for global
global
retail product.
product.
retail
Why RUSSIA?

Surging
Econo
myReal
Real GDP
GDP
Growth
Growth ↑ ↑
8.1%
8.1% to
to
$1.3
$1.3 trillion
trillion
The
The fastest
fastest
growing
growing
economy in
economy in the
the
G8
G8 group
group of
of
industrialized
industrialized
nations
nations
Investors
Investors
pouring
pouring money
money
into improved
into improved
storage
storage facilities,
facilities,
infrastructure,
infrastructure,
and
and logistics
logistics
Improving
Improving
financial
financial
services,
services, rule
rule
of law,
of law, and
and
banking
banking
FDIinfrastructure
infrastructure
into Russia
FDI into Russia
reach
reach $58
$58 billion
billion
in 2008,
in 2008, anan
increase of
increase of about
about
16%
16% compared to
compared to
“Even
“Even as
as the
the financial
value
thevalue in 2007
financial 2007
crisis the in
crisis shows
shows no
no signs
signs
of abating
of abating and
and
deleveraging
deleveraging
continues, Russian
continues, Russian
economy
economy will
will remain
remain
strong
strong because
because ofof
very
very low
low levels
levels of
of
public debt.”
public debt.”
Political Factors
Supporting the E-Russia program,
designed to stimulate growth of

Government seeking to streamline

customs and taxation regimes to

Government focus on expanding

manufacturing base and improving

New reforms targeting bureaucracy

and corruption

E- commerce, including B2B

ecommerce

Attract more FDI

Infrastructure development
Private Consumption & GDP
Opportunities for Indian Tea Companies in the
Russian Tea Market
CATEGORIES GLOBAL INDIA RUSSIA

Market size in terms of retail value 23,323 876.4 3,266

Market size in terms of retail volume 1,765 226.04 161.44
Growth rate in terms of retail value 4.50% 3.50% 12%
(08-09)

Growth rate in terms of retail volume 3.50% 2.60% 2.30%

(08-09)

Per capita consumption (per kg) 0.3 0.7 1.3

Average retail price (in US$ per kg) $13.20 $3.90 $20.20
Growth rate in retail price (2008-09) 0.90% 0.90% 9.50%
Forecast of Tea Volumes by Sub-sectors:
2010-2012
248000
246000 245822

244000 243099
242000 241683

240000 239745
239101
238000
235900
236000
234000
232000
230000
2010 2011 2012
Tea Black Tea
Opportunities for Indian Tea Companies in
the Russian Tea Market
Opportun
ities

Retail volume growth

rates of 15% and 12% in
black standard tea bags
and black specialty tea
bags respectively, in
2009.

Total value of Russian

Largest tea imports in 2009
importer of tea was $308.97 million,
which is nearly 14%
in the world of the global market
Entry mode - Joint Venture
Sharing of profits
and risks
Time-to-Time
market advantages

Pooling of
resources

Provides access to
government contacts
and existing
distribution network

Provides local help

minimizing problems
associated with
bureaucracy and
corruption
TO Have Joint Venture Between

Warren tea Ltd can

enter into joint venture 1.Orimi Trade
with local Russian tea 2.MOSCOW TEA FACTORY
LIMITED COMPANY
industry like..
 Conclusion
•• The
The time
time for
for cooperation
cooperation between
between India
India and
and Russia
Russia has
has never
never been
been
better.
better.

•• Plenty
Plenty of
of resources
resources on
on both
both sides
sides to
to be
be taken
taken advantage
advantage of.
of.

•• Have
Have aa clear
clear strategy
strategy and
and an
an end
end result
result in
in mind.
mind.

•• Know
Know the
the process
process and
and requirements
requirements for
for getting
getting to
to that
that end
end result.
result.

•• Rely
Rely on
on experts
experts who
who can
can “bridge”
“bridge” the
the needs
needs and
and wants
wants of
of all
all parties
parties
internationally.
internationally.
THANK YOU