Mumbai, June 7 - India's Tata Tea Ltd. is scouting for more acquisitions in Europe and the United States to strengthen its position as the world's number-two branded tea firm, company officials said on Wednesday.
The Kolkata-based company has been exiting its tea plantations in India to focus on its high-margin packaged tea business, and is also looking to buy specialty tea firms abroad to give it a firmer footing in this fast-growing segment.
"The last two acquisitions we made were quite small, but we would potentially look at a much bigger one," said John Nicholas, managing director of developed markets for the Tata Tetley group.
"We've been under-represented in specialty teas and have several firms on our shortlist, but a lot of these firms tend to be family-owned, so the process takes longer," he said.
Tata Tea said last month it would buy herbal and fruit tea maker Jemca in the Czech Republic for an undisclosed sum.
Also in May, Moroccan state-owned tea and sugar company Somathes said it had received an expression of interest from Tata Tea among 25 firms, including Chinese and Moroccan firms. The minimum bidding price has been set at about $51 million.
"Eastern Europe is a hugely exciting market to be in because the economies are growing quickly," said Vijay Singh, managing director of developing markets for Tata Tetley.
"The bulk of the population is in developing markets and even though these are mostly markets for packet tea and tea bags there's long-term potential and opportunity for other segments as there is a large population of young people," Singh said.
Tata Tea, which acquired Britain's Tetley for $432 million in 2000, last year bought U.S. specialty tea brand Good Earth, which makes herbal and fruit-flavoured teas.
It is gearing up to launch Tetley Ice Tea in Britain this year, and is also looking to popularise chai lattes -- flavoured and herbal tea concentrates -- in markets such as Canada, taking the lead from Starbucks' Tazo brand.
On Tuesday, Tata Tea posted a 39 percent rise in group annual profit to 2.99 billion rupees ($65 million). Profit in the year to next March is forecast to rise to 3.24 billion rupees, according to Reuters Estimates, up 8.4 percent.
Its shares, valued at $782 million, have dropped by more than a third this year, while the main stock index has gained 6 percent.
Last year, India's Surrendra group, which partly owns Apeejay Tea Ltd., bought the tea business of Britain's Premier Foods Plc. for 80 million pounds, including Typhoo, the UK's third-biggest tea brand after Unilever's PG Tips, and Tetley.
Indians are the world's largest tea consumers, drinking about 450 billion cups a year. More than half its billion-plus population is below the age of 25, with a growing fondness for flavoured coffees, ice teas and fruit beverages.