New Delhi, April 29, 2009 - IFC, a member of the Word Bank Group, is making its first investment in remote northeast India to help create a tea-growing company with a sustainable business model that will allow many of the company's 30,000 employees to participate as shareholders.
The new company, Amalgamated Plantations Private Ltd, recently acquired 24 tea plantations located in Assam and West Bengal that were owned previously by Tata Tea Ltd. IFC will acquire 19.9 percent of the company, while up to 15 percent will be owned by employees. Tata Tea will remain a major shareholder. IFC is also providing advisory support to help local farmers grow alternate crops to use surplus land and water in tea estates and improve productivity.
“Tata Tea is proud to be partnering with IFC,” said Percy Siganporia, Managing Director of Tata Tea. “We are confident that our combined strengths will be the driving force for a positive change in India’s tea-plantation sector and for Amalgamated Plantations.”
Hardeep Singh, Chairman of Amalgamated Plantations, said: “We welcome IFC as a significant incoming stakeholder, which has a mandate and track record of investing in socially relevant and environmentally sensitive businesses. All stakeholders, including incoming employee shareholders, will benefit from IFC’s participation.”
The tea-plantation sector is central to South Asia’s social infrastructure, as tea estates have long provided housing, education, and health services to the local population. Shifting the production of tea to an employee-owned business model is a new approach to boosting productivity in an industry facing significant competitive pressures.
Oscar Chemerinski, IFC Director for Global Agribusiness, said: “Through this partnership, IFC will contribute to promoting competitiveness in an industry that is vital to the Indian economy, particularly in low-income regions.”