Tata Tea has decided to keep Tata Tetley as a joint venture company in India and will not merge it with its international business.
Tata Tetley became a subsidiary of Tata Tea following the acquisition of Tetley in 2000.
The company was incorporated in 1992 and after the formation of the joint venture between Tata Tea and The Tetley Group, UK, the business of Tetley division was transferred to the venture in 1994.
P T Siganporia, director of Tata Tetley, said the merger proposal was not explored given the costs involved.
"For now, Tata Tetley will continue as a separate joint venture company," he said.
Meanwhile, the group's decision to use Tata Tetley to service the Australian market from India would add 3 million kg of value-added tea to Tata Tetley's bottomline, R K Krishna Kumar, vice-chairman of Tata Tea, said.
The move would more than double Tata Tetley's value-added business. The entire manufacturing operations of Tetley, Australia, located at Yara, are being shut and transferred to the export oriented unit in Kochi.
The factory will source tea from across regions, add value and then market the product.
Tetley sources around 8 million kg from India. In a bid to make Tata Tetley a more focused EOU, the company buried the Tata Tetley brand in the domestic market and wound up its domestic marketing operations.
The company's role in the domestic market is now restricted to that of a tea bag convertor for Tata Tea, which has launched 'Tetley' brand tea bags under licence agreement with Tetley group.
The manufacturing base in Cochin is considered as the most efficient and cost effective unit in the group.
This unit is also capable of producing different kinds of tea bags and packet teas with various pack sizes and the variants of such products ranges up to 40.
Krishna Kumar said the current business of Tata Tetley is around Rs 30 crore (Rs 300 million) and with the move to add the Australian business in its portfolio would result in an increase of business to Rs 80 crore (Rs 800 million) for Tata Tetley.