Digitization and Modernization of the Entire Plantation Value Chain could answer industry woes

 Amalgamated Plantations Private Limited. (APPL), one of the foremost tea manufacturing Company in India, has recently conducted its 13th Annual General Meeting. Considering the current scenario, for the first time the Company provided an audio-visual platform to its shareholders at the estates to participate in the AGM. During the meeting, the shareholders were taken through some of the major developments in the Company/Industry.

Key developments:

The drastic impact of COVID-19 on Indian economy led all industries including tea to go through unprecedented times.  The Governments of India, Assam and West Bengal did their best to support the tea industry.

Total North-Indian production in 2019 – 2020 went up to 1165 Million kg from 1124 Million kg, which constitutes 83% of the annual Indian tea production volume of 1400 Million kg.  While the Regulated Tea Grower prices averaged around Rs. 170 per kg, the Small Tea Grower / Bought Leaf Factory prices averaged in the region of Rs. 120 per kg. The stagnant average price of tea (at Rs. 150) is not favorable for the overall tea industry profitability, a burden of debt and interest continues to cast unprecedented pressure on the finances.

The initiative by Government of Assam to provide Green leaf cess exemption, orthodox production incentives and a 3% interest subvention on working capital and term loans is likely to boost industry profitability in the FY 2021. Along with this, initiative by Government of West Bengal to cash out the ration to workers and merging it into their salary and providing rations under NFSA in FY 19 has also been a big help to the tea industry workers to maintain a sustainable livelihood.

Mr Ranjit Barthakur, Chairman APPL, opined that the tea businesses would move towards creating asset light businesses for investors, especially in the regulated tea industry and pave the way for economic and ecological regeneration in the entire tea management framework.

He also mentioned that adapting to the new normal considering the COVID scenario, the primacy of digitization and modernization of the entire plantation value chain, from manufacturing to marketing as the core concept. Inclusion of digital workstations, smart management information system (MIS) and decision support system (DSS) will be effective to reduce cost of operation and improve value chain productivity. Similarly, digital plantation in terms of crop management, pest and disease control, irrigation management etc. through digital mapping and reporting and use of robotics in activities like plucking, pruning etc. and process parameter optimization, quality standardization and remote operation through digitally controlled manufacturing should be the primary focus. Digital marketplace driven by e-commerce platforms will enable direct delivery from estates to consumers.

Applauding the Prime Minister’s suggestion to make North-East organic, Mr Barthakur highlighted that APPL had conducted an experiment to convert Hathikuli tea-estate,  in the heart of the pristine Kaziranga area ,  into organic a few years back.

During the AGM, Chairman Mr. Ranjit Barthakur also said that “APPL would continue to strengthen its core competencies, focusing on stabilizing production volume, improving the quality of its teas, optimizing cost of production, improving market orientation and opportunities in branded retail. The contributions of this have been very measurable and impactful. The investment in social assets like education, healthcare, sanitation, water, etc. will continue in full swing to improve life and livelihood.”

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