Indian Tea Industry Essay Example

Indian Tea Industry Essay Example Indian Tea Industry Essay Indian Tea Industry Essay Indian tea industry: A SWOT analysis Strong domestic market Monojit Dasgupta With tea prices rising, the tea industry is on the upswing again after several years and the expectation is that the trend will persist. But the industry is not without its challenges. The following is the SWOT analysis. Strengths The diverse agro-climatic conditions prevailing in the tea growing areas of India lend themselves to the production of a wide range of teas – black, (CTC, orthodox), green teas and organic teas. A one-stop-shop for high quality specialty teas e. g. Darjeeling, Assam, orthodox, high range Nilgiris, etc. Strong production base with 75 per cent of the production being accounted for by organised sector covering 1,600 gardens owned by nearly 1,100 entities. Competent managerial manpower. Strong research backing from well established research institutions. Availability of modernised and upgraded manufacturing facilities. Labour welfare laws protecting workmen. Emerging small grower sector with young plantation profiles. Availability of training facilities for plantation managers, supervisory staff and workers for continuous upgradation of their skills. Strong domestic market – by accounting for nearly 80 per cent of production offering demand cushion for the tea industry. Weaknesses Old age of the tea bushes – nearly 38 per cent have crossed the economic threshold age limit of 50 years and another 10 per cent on the verge of crossing this limit shortly. High cost of production mainly due to low productivity, high energy cost and high social cost burden. Diminishing availability of workforce particularly in South India. Remote location of the plantations and transportation of teas over long distances from tea gardens to sale points. Poor infrastructure – approach roads to gardens, inadequate warehousing at ports, constrained availability of containers, placements of vessels and high ocean freight charges (due to feeder–mother vessel transfers). Difficulties in introduction of mechanisation of field operations due to topographical and quality limitations. Unorganised nature of small growers with fragmented small and scattered holdings leading to production of poor quality teas mainly due to non-availability of technical know-how at the doorstep – weak extension service. Lack of quality monitoring mechanism for teas particularly sold through private sales. Opportunities Good awareness level world over as to the health attributes of tea leading to growing demand for good quality teas and specialty teas such as organic teas, green teas. Narrowing down of the gap between supply and demand due to increased growth rate of consumption in the major producing countries. Producing countries reaching an agreement for forming an exclusive forum for resolving their differences over common issues. Positive response by the tea industry responding to the Government towards renovation of fields and processing factories. (Special purpose tea fund and quality upgradation initiative). Increasing strength of small growers and showing good response to the suggestion of Tea Board for collective approach towards adopting GAP and GMP. Threats Round-the-year production in countries such as Sri Lanka, Vietnam. Low cost of production of teas from Kenya, Vietnam and Indonesia etc. Younger age of bushes (better quality of tea) of other producing countries. Consistency in quality commitment and high service quality perception of exporters of other countries. Better developed packaging and bagging capacity of Sri Lanka. thehindubusinessline. com/2010/10/01/stories/2010100151752100. htm