Homi R Khusrokhan, the Managing Director of Tata Tea, spent 29 years with the Glaxo Group before joining the Tata family in February 2001. In this interview, he explains how Tata Tea is reinventing itself as the competition intensifies. He outlines Tata Tea's new initiatives. Khusrokhan also talks about his style of management.
First, the market dynamics were very similar. The FMCG market in India is as crowded as one finds in Pharmaceuticals today. Big brands are threatened by small regional brands and by loose tea, exactly like the multiplicity of branded and non-branded generics which threaten the branded pharmaceuticals of major players. Price is a major determinant of volumes sold and manufacturer's margins are shrinking.
Secondly, Tata Tea was getting into "integration mode" with Tetley when I joined - something very familiar to an old pharmaceutical hand like me. It gave me the ability to leverage the knowledge of 3 prior integrations and a link to international operations that I had some familiarity with.
Thirdly, strong corporate values were important in both the organizations that I had the good fortune to work forstrong values and high standards of business ethics. Tata and Glaxo are both trusted and respected names in the corporate world. That also helped.
The root cause of the imbalance between demand and supply in the domestic tea market is that Indian exports are stagnant or perhaps falling and therefore domestic retentions are rising. A growth in exports is the only solution to bring some respite to this industry. The Industry and Tea Board are working on a joint agenda for change in this area.
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