INDUSTRY PROFIL

The tea industry in India is about 160 year old. It occupies an important place and plays

a useful part in the national economy. Tea cultivation on commercial scale was first started in

Assam in 1839. There after it was extended to other parts of the country between the fifties

and sixties of the last century. However, owing to certain specific soil and climate requirements

its cultivation was confined to certain parts. In south India, Dr.Christy, experimented tea in the

Nilagiris tea year 1852 and it was in 1889 that tea planting started in Nilagiris.

India has the honor of biggest producer and largest consumer of tea in the world. The

country accounts for 30% of global tea production and a share of 15% of the world’s exports.

The per capital consumption of tea in India is rising steadily and the increase in demand is much

more then the increase in production. Thus unless all the potential areas of tea cultivation is

developed, the country will have to import tea in the near future. This will affect the foreign

exchange of the country, which will have an effect on the overall development. The foreign

exchange of 1997 was RS.1731 corers that are 203 mn. Kg. Both historical circumstances and

general characteristics of the product itself have helped to shape the present structure of the

industry. After the loss by the east India Company in 1833 of their monopoly of china tea trade,

the British turned their attention in earnest to the cultivation of the tea in India on commercial

scale.

Tea industry in India was created to satisfy England’s need for high quality black teas

without dependency on trade with China. First, the British East India Company’s monopoly of

the tea trade and its dominance over India where the Company maintained the largest privet

army in history had to be broken. At the same time growers and tea experts were

experimenting with seeds, paints and cutting secured from China which they believed would

grow in India’s climate. Notably, an indigenous strain of tea plant growing wild in India had

been discovered years earlier. The year 1838 marked the first Indian tea harvest. A mere 350

Ibs, to be auctioned in London. It was greeted with much excitement and high reviews from tea

experts. In 1858 the British East India Company turned its rule over India to Britain. The stage

was set for the rapid expansion of far product. As it turned out the indigenous plants produced

the far superior in quality to the Chinese transplants. So the Indian tea industry was born. Now

India produces more tea than any other country.

Tea is said to be the most important lobour incentive crop that provide employment to

over million workers both man and women. Women are mainly engaged in plucking the leaves

and men do the plucking of the tea bushes, looking after their growth and processing of tea in

the factory. Tea has helped in rural development to a large extent as it provides employment in

the rural area. It provides income to the central and state government through taxes. Tea has

been one of India’s fortes in exports for decades.

According to the report published by the United Planters Association of South

India ( UPASI ) tea is cultivated in 38 countries including India , China , Bangladesh , Malaysia ,

Srilanka , Kenya , Russia and Brazil .

Area under production of Tea in the World.

COUNTRY AREA(hector) TOTAL

PRODUCTION(mn.kg)

WORLD % OF

PRODUCTION

India 507196 846.47 28.16

Srilanka 49195 53.95 1.80

Indioasia 157488 159.35 10.21

China 108900 683.32 22.74

The global tea production stands at 3.2 billion kg annually. Of this, Black tea

accounts from 2.1 billion kg and green tea another 1.1 billion kg.

Green tea

COUNTRY PRODUCTION

China 935

Other 165

Black tea

COUNTRY PRODUCTION

(mn.kg)

India 928

Kenya 329

Srilanka 317

Indioasia 166

Turkey 135

Vietnam 109

Others 116

Indications now are that global tea production is slowing down. Black tea demand is however

growing 3.3 percent annually. So soon will be short fall in the market.

The Indian tea industry is in a consolidation phase. Most branded tea players owning

plantations have been looking at divesting their plantation so as to focus on branding and

marketing. India continues to be the world’s largest producer and consumer of tea. Domestic

production as well as exports has been on a rise. However, due to stiff competition from

countries like Sri Lanka, Kenya, china, Bangladesh and issues of quality, realizations on India

teas have been witnessing a downward trend. India is not only the largest producer of tea but

also one of the important exporters. In 1997, Indian tea accounted for 30.4% of the world

production 18% of the world export. It is estimated that 70% of country’s population comes in

contact with tea in one way or other, including tea drinking, thus rendering tea to play a key

role in India’s economy and society. Overall we can say that tea is the largest consumed

beverage in the country.

India is also the largest consumer of tea. Nearly 24% of the global production and 75%

of India’s total production is consumed in the county. Thus tea plays a key role in India’s

economy and society both directly and indirectly.

COMPANY PROFIL

The Frontier Indco Tea Factory was registered under the section 9(1) of the

Thamilnadu co-operative society’s Act 1961 on 23-06-1981 and started on 27-07-1981, but it

commenced its production from 12-10-1986 because of the lack of a factory building.

Before 1980’s where only coffee plantations in Erumadu & 5000 people under stood

the advantage of the against coffee which gives a regular income than coffee, which gives by

UPASI (Untied Planters Association of South India). But the tea growers had to endure

inconvenience of supplying green leaves to the Indco Tea Factory at Pundallor, where it is too

far from this area. The cultivators become aware of the need their difficulties. They formed an

association and approached the Tamilnadu government authorities in 1981 in order to

implement their ideas.

The Frontier Industrial co-operative tea factories Ltd, was started with 98 members

and have gradually increased and as on date there are 1961 members on roll. As far as the

business turnover of the factory is concerned, the factory commenced its production only from

12-10-86 onward the production and sale details for the past five years are as below;

NO YEARS GREEN LEAF

PURCHASED

LEAF

COST

PAID

PRODUCTION

TARGET

FIXED

PRODUCTIO

N

ACHIEVED

VALU

OF

SALE

SALE

AVARAGE

1 2008-2009 48.09 11.24 12.00 12.00 772.45 66.28

2 2009-2010 62.65 12.28 13.00 14.10 958.84 72.27

3 2010-2011 50.27 8.49 14.00 12.11 706.57 57.21

4 2011-2012 54.20 9.45 14.00 13.16 811.13 60.99

5 2012-2013 56.57 15.24 14.00 13.65 1135.8 85.84

6 2013-2014 42.02 14.03 14.00 10.22 795.94 88.37

The factory is equipped with machinery for dual production of both C.T.C and orthodox

types of teas. The area of the operation of the factory is the confined to Erumadu, Ayyankolly,

kayyunni, Thaloor and Kolappally village. The successful running of the factory is mainly relived

on the patronage of small tea growing members of this area

A typical organization of tea industry shall consist of the green leaf production at the

garden and the made tea production facility at the factory. The third corollary auction centers

where different grade of made tea is transacted in bulk quantities.

TEA INDUSTRY

PLANTATION TEA MANUFACTURING