Wednesday, December 30, 2015

Tata International plans to widen agri-business in Africa

Tata International, the unlisted trading and distribution arm of Tata Group, is betting big on agriculture business in Africa and planning to set up cleaning and processing units in that continent.

The company, which has presence across 12 countries in the Africa continent, is also looking to expand footprint to two more countries.

Nearly 18 months ago, the company through a step-down subsidiary – Tata Africa Holdings (Tanzania) Ltd – began sourcing and exporting commodities to countries including India, China, Myanmar and certain European countries. “This will be one of the major growth areas for us in Africa and will bring in additional revenues,” said Ajay Mehra, Executive Director of Tata Africa Holdings (Tanzania), but did not reveal the expected increase in revenues.

Now, the company intends to set up its own establishments such as collection points across the African nations to source the farm produces, and cleaning and processing units, ahead of the forthcoming harvest season.

“Initially, we were buying from aggregators…. Now, we intend to deal directly with farmers,” Mehra, who is also the country head for Tata International in Tanzania, said.

He, however, did not provide a investments required to set up its own establishment. The company has made a “significant” investment in terms of working capital, personnel and infrastructure, he added.

At present, the company sources commodities such as pulses (from Tanzania, Kenya, Malawi and Mozambique), sesame seeds (many of the African countries including Tanzania, Nigeria, Kenya), cashew nuts (Tanzania) and coffee (Uganda). The company has already exported about 5,000 tonnes of pulses (thur daal, green moong and chick peas) and 1,000 tonnes of cashew.

Tata International, which also trades in chemicals, healthcare and general trading, had posted revenues of $2.2 billion for the financial year ended March 31, 2015.

Angola and Ethiopia

The company is also looking to expand its footprint to two more countries – Angola and Ethiopia - in the continent.

At present, the company has presence across 12 countries (Kenya, Tanzania, Uganda, Zambia, Malawi, Mozambique, Zimbabwe, South Africa, Ghana, Nigeria, Ivory Coast and Senegal).

The company’s experiment ‘Grow More Pulses’ jointly with another group company Rallis India and Selian Agricultural Research Institute of Tanzania would benefit India, a large consumers of pulses in the world.

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