Corporate Sustainability- Tea Industry

SECTION F Group 3

TEA INDUSTRY
Tea Industry in India has a 170 years old. Most popular Drink in India. One of the oldest organized firm sectors with a large network. Indias large tea plantations are mostly concentrated in Assam and North-Bengal. Assam alone produces 51 percent of the national production. Second largest employer in the organized sector after Indian Railway- Mostly Women.

PROBLEMS
Tea industry of India is going through a crisis phase since 1990s. Emergence of small tea growers. Introduction of bought leaf factories . 20 estates in Kerala, 30 in West Bengal, about 70 in Assam have close down since the late 1990s(2007). More than 60,000 plantation workers have lost their jobs since 2002. Job cut, tougher picking demand, job insecurity and the casual work, appalling living and working condition. In 2005, Many player such as TATA HUL withdrew from Production and Started with only packaging.

REASONS
Poor yield arising out of poor condition of the gardens. Defective auction mechanism. Poor garden management/Frequent Changes. Excessive reliance on bank-debts with negligible fresh equity infusion. Ownership disputes and diversion of funds. Rising competition at domestic as well as international. Bad Pricing.

HOW to Go AHEAD and OBTAIN SUSTAINABILITY

Vigorous Marketing campaign in order to develop trust of Indian Brand in foreign Market. Factory modernization and/or process automation are essential. Provide support to small tea growers through technical, financial and marketing assistance for market access and quality improvement. Enable and facilitate sustainable tea production at supplying smallholders by paying higher prices and engaging in long-term buying commitments with producers that produce tea sustainably.

HOW to Go AHEAD and OBTAIN SUSTAINABILITY

Companies like HULs and TATAs should Conduct multi-stakeholder monitoring and verification of the social and environmental standards on the tea estates from which tea is procured. Government should Provide credit schemes and debt management services to the plantations. Train small-scale tea growers on social, economic and environmental aspects and improve their understanding of the tea value chain.

HOW to Go AHEAD and OBTAIN SUSTAINABILITY

HUL- Sustainable sourcing not only helps us manage a key business risk, it also presents an opportunity for growth, allowing our brands to differentiate themselves to the growing number of consumers who choose products based on their sustainability credentials.

THANK YOU