Tata Global Beverages, formerly Tata Tea Ltd, is considering restructuring the company’s operations at various levels and aiming to launch a new nutrition-based beverage, top officials said on Monday.

“We are looking at merging like businesses. Whenever we believe there is scale and size that warrant a merger, we would indeed take it forward,” Ratan N Tata, who is also the chairman of Tata Group, said on the sidelines of the company’s annual shareholders’ meeting

The company is looking to develop a new beverage based on nutrition and wellness, he said, but did not elaborate.

Earlier in his address to shareholders, Tata said that the company is aiming for revenues of $5 billion in the next 5 years, from the present $1.5 billion.

“Over the next 5 years, we are looking to grow our EBITDA levels by 15 percent year-on-year,” he said.

The growth would come from acquired and own brands, product development and acquisition, Vice Chairman R.K. Krishna Kumar told reporters.

Tata Global expects its margins to be under pressure in FY11 on increase in input prices and shortage of production of tea and coffee, Tata said.

The company is also looking at exploring a joint venture with PepsiCo for global distribution for its products, excluding tea.

“Pepsi distribution will enormously help the reach of Himalayan products and the losses would be turned into profits, whenever we start (joint) operations,” he said.

Himalayan, the brand under which the company sells packaged drinking water, suffered losses of 140 million rupees in FY10, according to the company’s annual report.

Last year, Tata Global signed a Memorandum of Understanding (MoU) with US-based PepsiCo Inc to explore the possibility of joint venture.

At 2:14 pm shares of the company were trading up 5.39 percent at Rs 117.30 in a steady Mumbai market.

source: Business standard

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