Tata Tea India is bullish on Watawala Plantations Plc (WPP) despite speculation it was planning to divest the tea business in Sri Lanka, according to a WPP official. "This speculation had originally come because our partners, Tata Tea India had got out of plantations and was concentrating on brands. But the Sri Lanka component in Tetley (owned and marketed by Tata Tea) is supplied by WPP and there is no intention for them to divest from WPP," V. Govindasamy, CEO WPP told The Sunday Times FT.
He said Tata Tea did not 'really' sell the plantations, but has given its North Indian estates to an investment firm and the management of the estates to manage. "Their South Indian estates had a management buyout and the employees bought the shares," he said. He said the Kenyan tea supply issue has helped local tea exports only 'marginally. "There is a definite relationship, but the entire Sri Lankan demand is not due to the Kenyan crisis. All the commodities – tea, rubber and palm oil -- are directly related to the US dollar. When it strengthens, the prices increase," he said. WPP has 5,000 hectares (ha) of tea, 2,000 ha in rubber 2,000 ha in palm oil in Sri Lanka.