Bangalore May 18 Tata Coffee expects a rebound in instant coffee exports over the next couple of quarters following a revival in demand from key markets such as Russia and Europe.
The company’s exports to Russia had collapsed in the second half of last fiscal due the massive devaluation of rouble amidst weak economic conditions. However, high coffee prices had helped Tata Coffee to offset the impact of the decline in exports last year.
“We are seeing definite signs of revival in the current quarter and expect to exceed our targeted exports,” said Mr M.H. Ashraff, Managing Director, Tata Coffee.
Stating that the bounce back in demand was due to the improvement in economic conditions in these markets, Mr Ashraff said, “exports will stabilise over the next two-to-three quarters”.
Tata Coffee is trying to reduce its dependence on its main market Russia, which accounts for about 45-50 per cent of the company’s instant coffee exports. “We are exporting more to Africa and Europe,” Mr Ashraff said, adding that the company was also getting enquiries from Japan and Turkey for the premium freeze-dried coffee.
“Africa is becoming a big market for us and we are quite rapidly increasing our share of exports,” Mr Ashraff said. Africa now accounts for 15-16 per cent of Tata Coffee’s exports as compared to less than 4 per cent last year.
Further, Mr Ashraff said the company is not going ahead with its plans to set up an instant coffee unit in Uganda as land was not made available. “We are not actively pursuing that and are not looking at any other locations,” he said.
Profit figures
Tata Coffee reported a consolidated net profit of Rs 1.88 crore on revenue of Rs 317 crore for the quarter-ended March 31, 2009 as compared with a net of Rs 3.96 crore on revenue of Rs 254 crore in the corresponding quarter in the previous year.
For fiscal 2009, Tata Coffee reported a consolidated net of Rs 21.10 crore on revenue of Rs 1,113.05 crore as compared to a net of Rs 23.88 crore on revenue of Rs 925.24 crore in the previous fiscal. The company suffered a forex loss of Rs 23.12 crore. Eight O’Clock Coffee Company, the subsidiary in the US, recorded a turnover of $173.91 million and a profit after tax of $7.03 million for the year.
Source : Business Line