Eveready for some more tea

Tycoon B.M. Khaitan is dividing his 200 million market leader in dry cell batteries and flashlights 8212; Eveready 8212; into two. The fi...

Tycoon B.M. Khaitan is dividing his 200 million market leader in dry cell batteries and flashlights 8212; Eveready 8212; into two. The first part will be managed by his son Deepak and will consist of his FMCG business, which will retain the company name Eveready. While the second part, will be run by his second son Aditya, and will consist of only his bulk tea business, under the name of McLeod Russel.

The tycoon will hold approximately 60 in both companies; the rest will lie with financial institutions, banks and the public. What few know is that about seven years back, Khaitan had joined McLeod and Eveready and now he seems to be undoing that, because of a recent spate of good fortune in tea prices.

Also the present decision to bifurcate was taken by him in 2003. But he couldn8217;t put his plan into action because, his executives hint, of global disturbances like the Iraq War and SARS hitting the world. Strange logic, that.

While the tycoon now says that this bifurcation is for a better shareholding value, our take is that it this is an attempt to insulate the battery business from his tea business. This is because even though the tea prices are at a high at present, the unreliable tea business often affects the overall results of Eveready. Thus in spite of the latter making profits, it would often have to suffer due to the bad revenues of the former.

Khaitan is not ignoring tea. He now wants to boost his packet tea business. It presently sells 4,000 tonnes of tea, which he wants to take upto 10,000 tonnes by 2005-06. The tycoon is also considering making some tea garden acquisitions, which will add to the 29 gardens he possesses at present while contributing in his above objective, as well as help his new company too!

Philanthropist Tycoon

Ratan Tata is clearly in a very philanthropic mood. Not unusual, but happily re-energised these days, because it8217;s also celebration time. The 100th death anniversary of Jamsetji Tata, the Tata Group founder, as well as the 100th birth anniversary of JRD and Naval Tata lie in the months of July and August. As a commercial highlight of these celebrations is provided by the groups decision to launch TCS8217; much-awaited IPO. Approximately Rs 2,300-crore will flow in from the sale of TCS shares, which will be channelised into their telecom business, part to promote new companies, enter into new businesses, and even consider acquisitions.

TCS has had a lot going on while it was busy preparing for its IPO. One of the things keeping it busy was the expansion of its previous relationship with IBM. This will help give a boost to TCS8217; delivery capabilities in portals and security areas among others. IBM in the meantime will gain an opportunity to enter new markets and increase its market share for its hardware and middleware technologies.

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So while his cup of joy brimmeth over, the tattle is that Tata wants to share this joy with his countrymen, by setting up an approximately Rs 120 crore paediatric hospital or an even more expensive adult education centre. Seems the tycoon knows how to win people over; either you concentrate on the health of children, the future of the country, or the levels of literacy of adults, the backbone of the country. Either way the tycoon will win over many hearts! Well done, Tata!

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