Indian Tea Industry
Indian tea industry: A SWOT analysis
Strong domestic market
Monojit Dasgupta
With tea prices rising, the tea industry is on the upswing again after several years and the expectation is that the trend will persist. But the industry is not without its challenges. The following is the SWOT analysis.
Strengths
The diverse agro-climatic conditions prevailing in the tea growing areas of India lend themselves to the production of a wide range of teas – black, (CTC, orthodox), green teas and organic teas.
A one-stop-shop for high quality specialty teas e.g. Darjeeling, Assam, orthodox, high range Nilgiris, etc.
Strong production base with 75 per cent of the production being accounted for by organised sector covering 1,600 gardens owned by nearly 1,100 entities.
Competent managerial manpower.
Strong research backing from well established research institutions. Availability of modernised and upgraded manufacturing facilities.
Labour welfare laws protecting workmen.
Emerging small grower sector with young plantation profiles. Availability of training facilities for plantation managers, supervisory staff and workers for continuous upgradation of their skills. Strong domestic market – by accounting for nearly 80 per cent of production offering demand cushion for the tea industry.
Weaknesses
Old age of the tea bushes – nearly 38 per cent have crossed the economic threshold age limit of 50 years and another 10 per cent on the verge of crossing this limit shortly. High cost of production mainly due to low productivity, high energy cost and high social cost burden.
Diminishing availability of workforce particularly in South India. Remote location of the plantations and transportation of teas over long distances from tea gardens to sale points. Poor infrastructure – approach roads to gardens, inadequate warehousing at ports, constrained availability of containers, placements of vessels and high ocean freight charges (due to feeder–mother vessel transfers).
Strong domestic market
Monojit Dasgupta
With tea prices rising, the tea industry is on the upswing again after several years and the expectation is that the trend will persist. But the industry is not without its challenges. The following is the SWOT analysis.
Strengths
The diverse agro-climatic conditions prevailing in the tea growing areas of India lend themselves to the production of a wide range of teas – black, (CTC, orthodox), green teas and organic teas.
A one-stop-shop for high quality specialty teas e.g. Darjeeling, Assam, orthodox, high range Nilgiris, etc.
Strong production base with 75 per cent of the production being accounted for by organised sector covering 1,600 gardens owned by nearly 1,100 entities.
Competent managerial manpower.
Strong research backing from well established research institutions. Availability of modernised and upgraded manufacturing facilities.
Labour welfare laws protecting workmen.
Emerging small grower sector with young plantation profiles. Availability of training facilities for plantation managers, supervisory staff and workers for continuous upgradation of their skills. Strong domestic market – by accounting for nearly 80 per cent of production offering demand cushion for the tea industry.
Weaknesses
Old age of the tea bushes – nearly 38 per cent have crossed the economic threshold age limit of 50 years and another 10 per cent on the verge of crossing this limit shortly. High cost of production mainly due to low productivity, high energy cost and high social cost burden.
Diminishing availability of workforce particularly in South India. Remote location of the plantations and transportation of teas over long distances from tea gardens to sale points. Poor infrastructure – approach roads to gardens, inadequate warehousing at ports, constrained availability of containers, placements of vessels and high ocean freight charges (due to feeder–mother vessel transfers).