A STUDY ON VARIOUS FUNCTIONS

OF INDCO TEA,
COONOOR

Final Project Report submitted by

ASHWINI K
14CB01

In partial fulfilment of the requirements for the award of PGDM

JULY-2014

Park Campus, Avinashi Road, Kaniyur,

Coimbatore-641659

Bonafide Certificate
Certified that this project report titledis the bonafide work of
Mr./ Ms..who carried out the research under my
supervision. Certified further, that to the best of my knowledge the work reported
herein does not form part of any other project report or dissertation on the basis of
which a degree or award was conferred on an earlier occasion on this or any other
candidate

Signature of the Student

Faculty Guide

Director

ACKNOWLEDGEMENT
The completion of this project brings a sense of satisfaction, but it is never complete
without thanking the persons who were responsible for successful completion.
I would like to extend my sincere thanks to my faculty guide Prof. Dr. M. A.
RAJKUMAR, Director, PARK Global School of Business Excellence, Coimbatore-59,
for her valuable suggestions, encouragement, timely advice and co-operation to complete this
project successfully.
I am obliged to all the faculty members of PARK Global School of Business
Excellence for their valuable information and guidance.
I am deeply indebted to Mr. SEKAR, HR and all other members of INDCO TEA,
Coonoor for providing necessary data, and for their kind co-operation.
I am grateful to all the staff members of INDCO TEA for their kind cooperation and
sharing of valuable information during the course of the study.
I extend my genuine love and gratitude to my dear parents who have built up my
profession and backed me up in difficulties.

TABLE OF CONTENT

CHAPTER

CONTENTS

NO
1.

ABSTRACT

PAGE
NO
i

INTRODUCTION

2.

1.1 INDUSTRY PROFILE

1.2 COMPANY PROFILE

1.3 ORGANISATION STRUCTURE

10

1.4 OBJECTIVES OF THE STUDY

11

1.5 SWOT ANALYSIS

12

3.

PROCUREMENT DEPARTMENT

15

4.

PRODUCTION DEPARTMENT

22

PACKING DEPARTMENT

31

5.

HUMAN RESOURCE DEPARTMENT

33

6.

FINANCE DEPARTMENT

35

6.

MARKETING DEPARTMENT

38

7.

CONCLUSION

41

ABSTRACT
Tea isnt simply tea in India but it is like a staple beverage here and a day without it is
impossible and incomplete. Indians prefer their steaming cup of tea because for them it acts
as an energy booster and is simply indispensable. This popular beverage has a lot of health
benefits too as its antioxidants help to eliminate toxins and free radicals from the blood.
The modern term Tea is driven from early Chinese word such as Tehai, cha and t,c used to
describe both the beverage and the leaf. Today tea enjoys an unparalleled and enduring
popularity. The story of tea is truly intertwined with the story of Mankind.
INDCOSERVE has, over the years, grown into a formidable organization and has
transformed the economic conditions of small tea grower in the Nilgiris District. The very
existence of Indco Tea Factories has given the Small Tea Growers the requisite collective
bargaining strength and albeit fate has often conferred a gray tinge to the aura of Industrial
Cooperative Tea Factories, these factories continue to be an enigma that traipses past the arc
lights in a last laugh as and when fate obliges. Organization study undergone at
INDCOSERVE is a practical fulfilment of the requirements for the award of the degree of
PGDM.
The general objective of this programme was to gain practical knowledge on the overall
functioning of the various departments of the organization and the various processes that is
being carried out in the tea industry. During the study a lot of practical knowledge has been
gained about the manufacturing process. Report gives an insight about the industry and its
various functional departments, the objectives of the company, how the company tries to
achieve these objectives and effectiveness of training.
This study has proved to be helpful in gaining idea about the various activities undergone in
real business situation. The study also helped me to gain more information about the present
conditions prevailing in the industry and the strategies will prove beneficial for me in future
ventures. The study was a good experience and I gained a lot about the Tea Industry in the
Nilgiris.

5|Page

CHAPTER I
INTRODUCTION
1.1INDUSTRY PROFILE
The History of Tea
Drinking tea plays such a central part in our lives, it is such a universal phenomenon with
millions of people the world over enjoying their tea on a daily basis, that its hard to imagine
a world without tea and yet while the Eastern world has been using tea for more than 4500
years, for most of this time tea was unknown in the Western world. Tea was only introduced
into the West a relatively recent 400 years ago. The modern term Tea is driven from early
Chinese word such as Tehai, cha and t,c used to describe both the beverage and the leaf.
Discovered in China, tea has exerted a profound influence on societies and cultures
throughout the world so that there are unique ceremonies in various cultures and most parts
of the world have social etiquettes concerning the preparation and drinking of tea as well as
social customs regarding how, when and where to drink it. Many myths, legends, poems and
proverbs surround tea and maintain its mystique. Tea has always accompanied and even
influenced the unfolding of key historical events as well as maintaining a presence whenever
economic, technological or cultural developments to k place. Today tea enjoys an
unparalleled and enduring popularity. The story of tea is truly intertwined with the story of
Mankind.
The Discovery of Tea
Legend has it that tea was discovered by the Chinese Emperor, Shan Nong, in 2737 B.C. The
Emperor had a habit of boiling his drinking water. One day while he was in his garden a few
tea leaves fell by chance into his boiling water which then gave off a rich, alluring aroma.
The Emperor, upon drinking this brew, discovered it to be refreshing and energizing. He
immediately gave the command that tea bushes to be planted in the gardens of his palace.
Thus the custom of brewing fresh tea leaves in hot water began and it quickly spread.

6|Page

Since the discovery of tea and over the centuries the tradition of drinking tea brewed from
fresh tea leaves in boiling water has been firmly entrenched in China Until the fifth century
A.D., tea was primarily used as a remedy, due to attributed to it. From this time onwards,
China's upper class adopted the fashion of presenting packages of tea as highly esteemed gifts
and of enjoying drinking tea at social events and in private homes. At around the same time
they began to develop and the tidings of tea began to spread as it reached Japan.
How Tea Arrived In The West
Tea arrived in Europe via Dutch and Portuguese sailors at the beginning of the 17th century.
They had trade relations with China and brought the tea to Britain and Holland at the outset,
where it was sold at auctions and became very popular among the aristocracy and the
wealthy. The beverage's initial high price prevented it from circulating among the western
population at large.
The tea trade was a significant factor in establishing connections between east and west. In
China, tea leaves were used as a substitute for coins. In Europe, tea was used as a symbol of
high status and as a stimulus for many technological developments, for instance, the
development of fast sail boats such as the "Clipper", which shortened the time it took to sail
from China to Europe and made it possible to provide shipments of fresh tea to the west.
British companies established for the importing tea, such as the "John Company" and "The
East India Trade Company" became trade monopolies, unprecedented in size and power, and
were ordained by the royal family and empowered to operate in any way necessary to ensure
the continuous supply of this popular drink. At the beginning of the 18th century, with the
expansion of tea imports to the west and the consequent decrease in its price, tea became a
common product enjoyed by all sectors of the population.
Tea in America: The Boston Tea Party
At the beginning of the 18th century, tea arrived in Northern America, quickly becoming a
desirable drink there as well. In New York and Boston, London-style teahouses started
developing, where the drink was sold to the general public. At around that time, the British

7|Page

Empire decided to place taxes on the tea supply to the colonies of North America who were
under their power. This decision greatly angered the American settlers who decided to
boycott the taxed products in protest. Whenever the British ships arrived at the harbors laden
with tea, the settlers would start demonstrations which forced the ships to leave without
unloading their wares. The most famous occurrence in this regard was named the "Boston Tea
Party", during which a group of settlers boarded one of the ships anchored in the Boston
harbor and started throwing hundreds of crates of tea from its deck into the sea. England
retaliated to this by sending military forces to the harbor and shutting it down. This event
marked the beginning of the American War of Independence.
Tea in The 20th Century
A significant rise in tea consumption resulted from the appearance of tea bags at the
beginning of the 20th century. The inventor of tea bags, a New York tea merchant by the
name of Thomas Sullivan, had a custom of sending tea samples in white silk bags to his
customers, and they were intrigued by this new ground-breaking product. Upon the
appearance of tea bags, the price of tea was lowered. The possibility of drinking tea without
special brewing utensils made tea suitable for mass consumption, turning it into the world's
most prevalent hot beverage.
During the 20th century, the source spread throughout the world, from Japan to Africa and
South America. Towards the end of the 20th century, an additional rise in the western world's
tea consumption occurred and also in evidence was a demand for The rise in tea consumption
in the occident results from three primary reasons:

The rise in popularity of the back-to-nature trend and an aspiration to lead a healthy,
simple life. Tea, as a natural drink with evident health benefits, fits in perfectly with this
lifestyle.

A massive immigration of Asians to the west. The Asian immigrants disseminated their
strongly based the tea cultures in the western countries.

Western travelers in the east, who brought with them tidings of tea upon their return.

Today the scope of the tea industry's worldwide economic activity stands at more than three
billion dollars a year. Tea is grown and produced in more than 40 countries worldwide.

8|Page

Every year, more than 2.5 million tons of tea is produced around the world, most of it in
Asian countries.
Flavours of Tea
The company produces many variety of teas like cardamom, chocolate, clove, pepper, vanilla,
lemon, ginger, green tea, masala tea, orthodox tea and specialty teas like silver tips tea which
is unique product made out of only the buds it is hand plucked and naturally sun dried. It has
got a lot of antioxidants and which can be used to increase the humanity power. It is very
good for diabetics, cholesterol, asthma, heart deceases and contains lot of vitamins and
minerals in it.
The various machines available at the company are:

CFM (continuous fermenting machine)

Fluid bed drier

Fibro mate

Shifter (grading machine)

Blending machine

Packing machine

Drinking tea plays such a central part in our lives, it is such a universal phenomenon with
millions of people the world over enjoying their tea on a daily basis, that its hard to imagine
a world without tea and yet while the Eastern world has been using tea for more than 4500
years, for most of this time tea was unknown in the Western world. Tea was only introduced
into the West a relatively recent 400 years ago.
Discovered in China, tea has exerted a profound influence on societies and cultures
throughout the world so that there are unique ceremonies in various cultures and most parts
of the world have social etiquettes concerning the preparation and drinking of tea as well as
social customs regarding how, when and where to drink it. Many myths, legends, poems and
proverbs surround tea and maintain its mystique. Tea has always accompanied and even
influenced the unfolding of key historical events as well as maintaining a presence whenever
economic, technological or cultural developments to k place. Today tea enjoys an
unparalleled and enduring popularity. The story of tea is truly intertwined with the story of
Mankind.
9|Page

Even the export sector of India has experienced an increase in the export of this commodity.
The total net foreign exchange in India is roughly Rs.1847 crores per annum. The tea industry
in India is labor intensive, meaning it depends heavily on human labor instead of machines.
This industry provides employment to more than 1.1 million Indian workers and almost half
the workforce constitutes of women.
There is a wide variety of tea offered by India; from Green Tea to CTC tea to the aromatic
Darjeeling tea and the strong Assamese tea, the range of tea available in India is unparalleled.
Indians take a lot of pride in their tea industry because of the pre-eminence of the industry as
a significant earner of foreign exchange and a significant contributor to Indias GNP.
The three prominent tea-growing regions in India are Darjeeling, Assam and Nilgiri. While
Darjeeling and Assam are located in the Northeast regions, Nilgiri is a part of the southern
region of the country. A visit to these regions is made truly memorable by the endless rolling
carpets of green which are the tea gardens and one cannot but help feeling enthralled and
captivated at the sight of the huge tea estates. Majority of the tea factories are located within
the premises of the tea estates and this is what accounts for the freshness of the tea. The
process of tea production has a series of procedures and processes. The process starts with the
plucking of tea leaves in the tea estates by women employees carrying a basket over the head
and ends with the production of the ultimate tea.

10 | P a g e

There are mainly two ways of producing tea in India namely the CTC production and
Orthodox production. CTC is an acronym for crush, tear and curl. The tea produced by this
method is mostly used in tea bags. The orthodox production method consists of five stages,
namely withering, rolling, fermentation, drying and finally storing. It is not possible to
compare the two varieties because their quality depends on factors such as rainfall, soil, wind
and the method of plucking of tea leaves and both possess a unique charm of their own.
As the primary producer of an assortment of tea, India is the ideal destination for all tea
enthusiasts. Types of Teas
All true tea comes from the Camellia sinensis plant. But the different types of tea stem from
the processing. Main varieties: Black, Oolong, Green, White, Loose teas and Tea Bags.
Black teas are oxidized and fermented during processing, to give them their distinctive flavors.
Black tea has a full, rich taste. This particular variety of black tea is called Keemun.
Oolong Tea is tea that falls between a black and a green tea. It only undergoes a small amount
of fermentation during processing. The variety of oolong tea in this photo is infused
with jasmine
Green teas have undergone less processing than black teas, and have a much lighter flavour.
The health benefits of green tea are seemingly endless. Since the leaves are not fermented,
the taste is pleasantly fresh and herbal.
White Tea comes from the Camellia sinensis plant. But the leaves are picked and harvested
before the leaves open fully, when the buds are still covered by fine white hair. Hence the
name White tea is scarcer than the other traditional teas, and quite a bit more expensive. This
variety of white tea is called Silver Needle.
Loose teas are typically whole leaves or at least large pieces of leaves.
A tea bag is a small, porous paper, silk or plastic sealed bag containing tea leaves for brewing
tea.
Global Competition

11 | P a g e

The major competitive countries in tea in the world are Sri Lanka, Kenya, China and
Indonesia. China is the major producer of green tea while Sri Lanka and Indonesia are
producing mainly orthodox varieties of tea. Kenya is basically a CTC tea producing country.
While India is facing competition from Sri Lanka and Indonesia with regard to export of
orthodox teas and from China with regard to green tea export, it is facing competition from
Kenya and from other African countries in exporting CTC teas.

12 | P a g e

1.2 COMPANY PROFILE

The early 1930s saw a steady increase in the area under tea cultivation in the small tea
grower sector. These small tea growers had to supply their green leaves only to private tea
factories. These small tea growers faced problems such as very low rates for their leaves,
heavy rejection of leaves and manipulations of quantity etc. it was the scenario that
prompted the government to form INDCOSERVE, a guardian of small tea growers in the
Nilgiris district.
The first Industrial Co-operative Tea Factory in India was established in Yedakkadu
Village in the Nilgiris in the year 1958 with 120 small tea grower-members in order to
develop their socioeconomic conditions. As this venture was a great success, it
encouraged the formation of more cooperative tea factories in different areas of the
district, wherever there was concentration of small tea growers.
When the number of factories were on the rise, it was felt necessary to promote an apex
organization to coordinate the activities of all the INDCO tea factories. Accordingly the
Tamil Nadu Small Tea Growers Industrial Cooperative Tea Factories Federation
Limited, briefly called the INDCOSERVE was established in 1965 and is functioning
under the administrative control of the Department of Industries and Commerce,
Government of Tamil Nadu.
Today, there are 15 Industrial Cooperative Tea Factories under regular production
covering about 32,000 acres of smallholdings and 20,000 small tea growers.
The total production of tea, both Orthodox and CTC, of these factories is around 16
million kgs per annum as against the installed capacity of 27 million kgs.

Dual manufacturing facility

Our INDCO tea factories have got dual manufacturing facilities, which gives the
advantage to manufacture tea in consonance with the needs of the market.
World class manufacturing facilities

13 | P a g e

In a dynamic world no manufacturing process can remain static and tea is no

exception. Under the new paradigm, the INDCO tea factories are moving towards
achieving world class manufacturing standards, which is a key to meet the
challenge of the new millennium.
Quality Our Priority
Standard Operating Procedures
Technological and quality upgradation is the order of the day. And more so when
it comes to the field of manufacturing of Tea, there is a myriad of techniques,
approaches and philosophies some already in vogue, some newly to be coined.
INDCOSERVE, with all these, in four decades of its experience and expertise of
deeply rooted knowledge, has been able to meticulously choose the right set of
standards and procedures to produce quality tea to suite the tastes of its customers.
Setting Standards in Safety Health and Environment
With safety, health and environment in mind, among 15 INDCO Tea Factories, 4
factories have already obtained ISO : HACCP Certification and remaining 11
factories are under the way of getting ISO : HACCP Certification and thereby
setting standards in safety, health and environment.
Manufacturing Process
Withering
Through withering Physico-chemical changes at this stage result in increasing
the level of organic acids, which are responsible for flavor and improved
Polyphenol Oxidase (PPO)
Two different ways of rolling
Orthodox Imparts twist and style to the made tea. Produces hi-flavour teas. CTC
(Cut Tear Curl) Imparts liquoring properties. The leaves are crushed in
between the vanes and resistors and discharged through diaphragm. Produces
hi-cuppage, strong liquor teas.
Fermentation
It is an oxidation process by which the Polyphenols in the leaf get oxidized with
the help of indigenous enzyme called Polyphenol Oxidase.
Drying

14 | P a g e

Under this process, the bio-chemical changes are terminated and the moisture is
reduced to a negligible percentage to ensure better keeping quality.
Special Features at a glance
State-of-the-art Duel Manufacturing Facilities (DMF)
Well-defined Standard Operating Procedures (SOP)
Moving towards achieving World Class Manufacturing Standards (WCM) by

obtaining ISO : HACCP Certification

Setting standards in Safety, Health and Environment (SHE)

State-of-the-art warehousing facilities

With the warehouses being centrally located and proximity to the auction centres at
Coonoor, Coimbatore and Cochin and with the state-of-the-art warehousing facilities,
INDCOSERVE has clearly, definitely, redefined Warehousing.
Ooty Tea - The new flavor of success
OOTY Tea is a clear representation of INDCOSERVEs initiation of taking the
Nilgiri Teas to a step forward. It has successfully entered into the packaged tea
market, which has been hitherto dominated by multinationals and other corporate big
wings in India. The ability of the brand to make an impact in its segment within a
short span of time, has laid a strong foundation for further innovative endeavors by
INDCOSERVE. Today, 3.12 million kgs of teas are being sold under the brand name
OOTY TEA.
Future A greener tomorrow
With over 4 decades of success, the organization is looking forward to take the tea
manufacturing to the next level. As the world awakens to the benefits of tea as not
only a beverage but also a medicine for health care, INDCOSERVE aims to globalize
its tea market with the coordination of Tea Board of India.

The following are the grades

Leaf Grade
CTC

15 | P a g e

Dust Grade
BOPL

SFD

BOPS

SRD

BOP

RD

BP

PD

BOPF

GD

ORTHODOXBOP
BOPF
BOPD(S)
BOPD

ORIGIN
Way back in the 19th century, the tea plantations were developed by the British mostly in the
form of Tea Estates, the Normal size being 300-500 Acres. The early 1930s saw a steady
increase in the area under Tea Cultivation in the Small Tea Grower Sector. These small tea
growers used to supply their green tea leaves mainly to the pivate bought leaf factories and
few estate factories.
These small tea growers faced many problems in the form of very low rates for theis leaves,
heavy rejection of leaves, quantity manipulations, etc. In fact they were at the mercy of the
tea factories, which invariably exploited their abysmal ignorance and weak socio-economic
conditions.
The Government of Tamilnadu appreciating the plight of small tea growers of Yedakkadu
Village, the Nilgiris District and decided to promote the cooperative movement among them.
The First Cooperative Tea Factory at Yedakkad was Registered in the name of The Kundha
Industrial Cooperative Tea Factory Ltd., IND No. 259 on 26.09.1958 and commenced its
production on 29.02.1962 and as an off-shoot of the benefits accruing to the small tea
growers, the small tea growers in various regions requested for setting up of a factory for
each of their region as like The Kundha Industrial Cooperative Tea Factory Ltd. Today there
are fifteen Indco Tea Factories functioning all over the Nilgiris district with main object as to
transform the socio-economic conditions of small tea growers in the Nilgiris District
The Tamilnadu Small Tea Growers Industrial Cooperative Tea Factories Federation
Limited (THE INDCOSERVE)
When the number of factories were on the rise, it was felt necessary to promote an Apex
Cooperative Organization to coordinate the activities of all the Indco Tea Factories and act as
a guardian of Small Tea Growers in the Bilgiris District. Accordingly the Tamilnadu Small Ta
16 | P a g e

Growers Industrial Cooperative Tea Factories Federation Limited, briefly called THE
INDCOSERVE was Registered and commenced on 20.03.1965.
INDCOSERVE has, over the years, grown into a formidable organization and has
transformed the economic conditions of small tea growers in the Nilgiris District. The very
existence of Indco Tea Factories has given the Small Tea Growers the requisite collective
bargaining strength and albeit fate has often conferred a gray tinge to the aura of Industrial
Cooperative Tea Factories, these factories continue to be an enigma that traipse past the arc
lights in a last laugh as and when fate obliges.

VISION OF THE COMPANY

To change the image of tea from poor mans drink to that of health promoting beverage.

MISSION OF THE COMPANY

To transform the socio-economic conditions of small tea growers in the Nilgiris District.

OBJECTIVES

17 | P a g e

To strengthen the co-operative movement in the tea sector in the Nilgiris.

To secure better prices for green-leaf for the small tea growers.
To improve productivity of the tea gardens of the small tea grower members
through The Indco Tea Factories with required inputs, to provide warehousing
facilities, and also to help in marketing their teas to the best advantage of the
Indco Tea Factories.
In the four decades of its existence, INDCOSERVE has enabled its 15 member
Tea factories to command 17% of the total production of the Nilgiris by
offering its expertise in technical, managerial, and commercial competence.
To promote the economic interest of the Small Tea Growers / Members of
Indco Tea Factories in the Nilgiris District.

To coordinate and facilitate the purchase of Machineries, Tools, manure,

consumables, etc. required by the Indco Tea Factories.
To render services to the member factories in the area of Legal, Technical,
Financial, Social, Manufacturing, Transport, Marketing, Warehousing, Sales,
etc.
To market branded and un-branded teas, packeted and straight teas, green tea,
Instant Tea in India and Abroad.
To help the growers to get reasonable price for their produce.

FUNCTIONS

18 | P a g e

Supply of Tea to Defence Department.

Sale of Ooty Tea to State Civil Supplies Corporations and Co-operative
Stores under Public Distribution System.
Supply of tea to recognized export houses.

1.2 ORGANISATIONAL CHART

Managing Director
Special Officer
All India Service Cadre

General Manager
(Deputy Director - IC)

Deputy General
Manager
(Asst.Director - IC)

ICO/Manager
(P&A)
I

Office
Administration,
Establishment
and Accounts

19 | P a g e

ICO/Manager
(Factories)
II

Activities of 15
INDCO Tea
Factories

ICO/Manager
(Marketing)
III

Marketing of
INDCO Teas,
Maintenance of
Warehouse &
Supply of
Consumables

ICO/Manager
(PDS)
IV

Sale of Ooty
Tea under
Public
Distribution
System

ICO/Manager
(CBE Warehouse)
V

Warehousing
Activities of
Coimbatore

and Supply of
Tea to
Defence

1.4 OBJECTIVE OF THE STUDY

The following are the specific objectives of this organisation study:

To study about the organization

To get a professional acquaintance from the organization in general.

To study the organization structure of INDCO Tea Factory.

To familiarize with the different departments in the organization and their functioning.

To gather managerial practical experience in an organization.

To get familiarized with the real business situation.

To identify the strengths, weakness, opportunities and threats of the departments.

20 | P a g e

1.5 SWOT ANALYSIS

SWOT Analysis of Indian Tea Industry
Strengths:

Market Leader:
With a value share of 22.6% in November, Tata Tea is now the market leader in the
Rs7,000-crore branded teas market, having overtaken peer Hindustan Unilever (HUL)
which has a value share of 21.3% (Source: AC Nielsen).

Resources & Capabilities:

21 | P a g e

Tata Tea Limited owns approximately 51 tea estates in the states of Assam, West Bengal,
and Kerala in India. The crop at each of these plantations imbibes the characteristics of
the region where it grows. In that respect, tea is much like wine. Having plantations in
varied agro-climatic zones enables Tata Tea to cultivate distinct tealeaves.

Brand Name:
Tata tea Brand is ranked the second most trusted beverage brand in brand equity. The
company's best-selling brand is Agni which caters to the mass segment and other brands
include Tata Tea Gold, Chakra, Gemini and Kanan Devan.

Experience:
Tata Tea has been one of the oldest companies in India and has the advantage of skill and
experience on their side.

Weakness:

No product differentiation:
One of the major problems Tata Tea faces is the lack of much product differentiation
hence loyalty of consumers is a major area of concern.

Branding:
Due to lack of branding activated the organized players and low switching cost of
consumers retaining consumers becomes a challenge as they switchover to cheaper
brands.

Distribution Network:
The distribution network of Tata Tea comprises on 1.25 lakh distributers this is not much
when you compare to HUL who have the strongest dealer network in the country.

Opportunities:

New Product Development:

The Company can integrate into fruit & herbal teas. This segment has not yet been tapped
by any of the tea companies yet and this could give Tata tea the first movers advantage if
they decide to enter this segment.

Rural Market:
There is a large untapped rural market which needs to be exploited. Although Tata Tea has
made it s presence felt in the rural markets this sectors is characterized by a large un
organized sector and local players rule the rusts of the day in these markets.

22 | P a g e

Export Potential:
Tata tea is present in 40 countries around the world. There are a lot more opportunities it
can exploit if they can increase their production capacity to exploit these untapped world
markets all over the world.

Mergers and Acquisitions:

There are more than 1000 tea companies in India. Tata tea can increase its market share
and penetration by acquiring these small companies and also forming mergers with other
big MNCs like it did for Tetley Tea, Good Earth etc

Threats:

Low Barriers:
There are not too many entry barriers put by policy makers this makes the Indian Tea
market extremely fragmented and unorganized. There are many regional players who
hold small chunks of markets. By imposing Entry barriers the existing players will be in a
better position to exploit the existing situation.

Globalization:
India is opening it s doors to MNC s and with that comes the threat of globalization of the
economy. The small and regional players will face intense competitions from big MNC s.

Company SWOT Analysis

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

Climatic conditions

23 | P a g e

High quality specialty teas

Strong production base

Competent managerial manpower

Availability of modernized and upgraded manufacturing facilities

Weaknesses

High cost of production mainly due to low productivity, high energy cost and high social
cost burden.

Diminishing availability of workforce

Poor infrastructure approach roads to gardens and inadequate warehousing

Opportunities

Good awareness level world over as to the health attributes of tea leading to growing
demand for good quality teas and specialty teas such as organic teas, green teas.

Narrowing down of the gap between supply and demand

Threats

Round-the-year production in countries such as Sri Lanka, Vietnam

Low cost of production of teas from Kenya, Vietnam and Indonesia etc.

Consistency in quality and high service quality perception of exporters of other countries

24 | P a g e

Better developed packaging and bagging capacity of Sri Lanka

CHAPTER II
PROCUREMENT DEPARTMENT
Field cultural practices

Use of high yielding clonal planting materials like UPASI 2, UPASI 3; UPASI 8;
UPASI 9; UPASI 10; CR 6017; TRI 2024 & 2025, for replanting, to replace the
existing old yielding old china fields, in a phased programme.

Proper nutrition management, by putting out the soil application of fertilizer in six splits
besides, monthly foliar application.

Adoption of four year pruning cycle to harvesting quality raw material by maintaining
closer plucking interval and harvesting only 2 3 leaves and a bud.

All the replanted young tea areas are under drip irrigation and manure tea under sprinkler
irrigation by making use of the abundant supply of water available in the estate.

Plucking Style
Light plucking

Leaving the mother leaf (big leaf) on the bush

Also called as mother leaf plucking or step up plucking

Advantages

Axillary bud grows faster

Weight of the pluck is more

No die back of axillary buds

Ensures addition of maintenance foliage

Disadvantages

25 | P a g e

Loss of crop

Bush height becomes unmanageable

Low plucking average

Self shading of the foliage

26 | P a g e

Hard plucking: Plucking below the mother leaf.

Level plucking: plucking to any leaf on the level (mattam)
Advantages

Higher plucking average

Low increase in the height of bushes

Disadvantages

No addition of maintenance foliage

Affects bush health

Delay in shoot development

Reduction in shoot (pluck) weight

Die back of axillary buds

More banjis and crows feet formation

Method of Plucking
January March

Mother leaf plucking

To add one tier to maintenance foliage

Sustains health and vigour of bushes

Practicable in view of low crops

Better photosynthesis during summer months

April December

Level plucking

Plucking to the newly established level

Helps in effective harvesting and

Maintaining manageable height of bushes

27 | P a g e

Bush Height Depends On

Jat/ clone of tea

Altitude of the garden

Pruning and tipping heights

Length of pruning cycle

Plucking system

Leaf Standards
Fine: 2 leaves and a bud or single leaf banji
Medium : 3 leaves and a bud or 2 leaves banji
Coarse :More than 3 leaves and a bud
Acceptable composition of green leaf
Three leaves and a bud/+ soft banji with one or two leaves - 90%
Coarse leaf

- 5%

Immature shoots

- 5%

Plucking of immature shoots results in crop loss and affects plucking average
Leads to wide fluctuation in crops
More coarse leaf indicates extended plucking rounds
Affects the yield and quality of tea
Frequency of Plucking
Plucking interval influences yield, quality of harvested leaf and plucking average.Should be
in tune with the growth pattern.
Programme plucking based on Leaf Expansion Time (LET)
Growing season

: 7 10 days

Lean season

: 12 15 days

Number of rounds per annum 28 to 6 rounds depending on elevation, weather conditions and
age from pruning

28 | P a g e

Schedule for Plucking

Month
January
February
March
April
May
June

No of rounds
2-3
2
2
2-3
3-4
3-4

Month
July
August
September
October
November
December

No of rounds
2
2
2-3
3-4
3-4
2-3

No. of rounds - High elevation hand plucking: 28 32

Integrated shear harvesting
Programme: 20 22
Mid elevation hand plucking: 32 36
Integrated shear harvesting
Programme: 24 26
Pruning
Pruning is one of the most important operations, next to plucking, which directly determines
the productivity of tea bushes. It is a necessary evil in the sense that it has to be carried out
periodically in spite of huge crop loss it results. If pruning is delayed, in other words as the
age of wood from pruning increases, the size and weight of growing shoots on plucking
surface decreases. There is preponderance of banji shoots on plucking table as more and more
buds fail to grow with loss of vigour of growing apices. Therefore, to maintain the vegetative
growth, pruning is necessary. The objectives are:

To renew the wood.

To provide stimulus for vegetative growth.

To divert stored energy to production of growing shoots.

To correct past defects in bush architecture.

To maintain ideal frame height for economic plucking.

To improve bush hygiene.

To reduce the incidence of pests and diseases.

To regulate the crop.

To facilitate consolidation by infilling of vacancies.

Types of pruning:
Light Prune
29 | P a g e

Tea bushes are usually pruned every 3 or 4 years at 4 -5 cm above the last pruning cut. This
type of pruning is called light prune (LP). The time period from one light prune year to
another is called one pruning cycle and LP is a thus, natural sequence given at the end of a
pruning cycle. It helps to renew the wood, regulate crop distribution, reduce pests and
diseases and maintain ideal frame height of the bushes.
Height Reduction Prune and Medium Prune
However, when the tea bush grows tall and plucking becomes difficult, they are brought
down to an optimum height by height reduction prune (HRP) at 60-70 cm, or medium prune
(MP) at 45-60 cm above ground. Both HRP and MP help in rejuvenating the tea bushes that
have become old and their yields have started declining. MP removes the knots and
unproductive excess woods and facilitate consolidation by infilling of vacancies. Medium
pruning thus provides opportunity for taking many corrective measures for improving the
health and production capacity of old tea sections. Such sections are brought back to the
normal 3-4 year pruning cycles in about 4-5 years.
Heavy prune
Heavy prune (HP) is given at 15-45 cm for complete renewal of frame. In collar prune, all
above

ground parts of the tea bushes are cut down and this operation is carried out only

when the root system is considered strong enough to withstand the shock and initiate new
growth. In practice however, very low pruning is generally avoided now a days as it results in
heavy mortality, particularly in Assam jats growing in poorly shaded sandy soil. In between
two successive prune (LP) years, tea bushes are given lighter forms of cuts which are termed
as deep skiff (DS), medium skiff (MS), light skiff (LS), level of skiff (LOS) or untouched
which is called unpruned (UP).
Deep Skiff
Deep skiffing (DS) of tea bushes is done normally between 12-15 cm above the last LP mark.
The DS helps to regulate crop distribution and to reduce the ill effects of drought, excessive
creep and the height of plucking table.

30 | P a g e

Medium Skiff
Medium skiff (MS) is normally given at 5 cm over last Deep skiff mark. The objective of MS
is to regulate crop distribution, reduce the ill effects of drought, reduce the incidence of
excessive banji formation and reduce the height of plucking table.
Level of Skiff and Light Skiff
Level of Skiff (LOS) is given 4-6 cm above the tipping mark mainly to level the plucking
surface. Light Skiff (LS) is usually given up to 1 cm above the previous tipping height.
Time of pruning and skiffing
In general, pruning is carried out when the tea bush is dormant and there is a good reserve of
root starch. In draughty areas of Northeast India, pruning is done in mid-December to midJanuary avoiding shoot initiation during drought. Medium pruning can be carried out in midDecember to end of January. Skiffing is performed at anytime between mid-December and
end January; deeper the cut earlier is the skiffing time. In Darjeeling, pruning can be started
as early as November. The best time for pruning may differ with cultivars, which can be
ascertained by root starch reserve test.
Resting before pruning
For LP generally resting is not required. However, if there is inadequate foliage, the tea
bushes are given rest by stopping plucking from 3 weeks before pruning. Very weak tea
plants and those due for MP should be rested 5-8 weeks prior to pruning. Vigorously growing
well-shaded tea bushes are pruned first. For MP/HP in the year of prune additional doses of
potash and phosphate are also applied and in inadequate shaded areas, temporary shade of
Indigoferateysmanii at 3-4 m apart should be planted a year before pruning.
Tea plucking
A small bud forms at the end of each stem and quickly becomes a young shoot. This end
leaf is usually curled and forms the bud. Other leaves are found on the stem and their number
below the bud will determine the quality of the plucking: the more are removed, the lesser
quality plucking.

31 | P a g e

There are three types of plucking:

The

imperial plucking: the bud and the leaf that directly follows.

The

fine plucking: the bud and the two leaves that follow. This is a harvest of excellent

quality.
The

average plucking: the bud and the three leaves that follow. This gives a lesser quality

tea than the previous two but it allows the tea plant to grow better.
The leaves are never plucked separately: the part of the stem that unites the young shoot and
the leaves is always plucked as a whole. In order to obtain some much sought-after teas, the
4th and 5th leaves, also called Souchong, are picked. These are usually to be found in smoked
Chinese teas. After a certain period of time the tea plant will have stems with no young
shoots. This marks the resting period. The end bud is formed of the "deaf" leaf which is then
removed in order to allow the stems to recover.

32 | P a g e

CHAPTER III
PRODUCTION DEPARTMENT
Production Process and Quality Control
Tea manufacturing is normally carried out in two ways, (i) CTC and (ii) orthodox. CTC refers
to the Crush, Tear & Curl process where the withered green leaves are passed in-between two
rollers rotating in opposite directions. There is complete maceration of the leaves and the
resulting powdery material is referred to as "cut dhool". Enzymatic action is maximum in the
CTC type of manufacture. In orthodox type of manufacturer, the withered leaves are rolled on
specially designed orthodox rollers which twists and crushes the leaves thereby rupturing the
cells. The maceration is less as against CTC processing. But this process results in teas with
good flavour and taste.
Improvement in production and productivity
The Company has formulated new schemes, to step up productivity, by supplementary
irrigation and improving soil health and moisture regimes of different divisions. The adoption
of soil conservation measures and intercropping pepper over an area of 90 hectares are other
measures which are improving the production and productivity of Karumbalam Tea estate
plantation areas.
CTC Tea
Steps in CTC Tea Manufacture
Withering
Green leaf sifting
Reconditioning
Rolling
Fermentation
Drying
Grading and sorting
Packing

Withering
Is the first and foremost step involved in tea manufacture. The evaporation of moisture in the
green leaf is brought about by blowing or moving air over the leaf in the withering trough.
The current of air performs a two functions viz., Conveying heat from the leaf as well as
33 | P a g e

carrying away the water vapour through a bed of green leaves to achieve physical withering.
Whenever the hygrometric difference is below 3 C, hot air is mixed in suitable proportion or
heat energy is supplied to increase the hygrometric difference with the concomitant rise in the
dry bulb temperature of air. But the dry bulb temperature of air after mixing should not
exceed 35 C.
So, in a well designed, balanced factory, an optimum load of 30kgs per meter square for a
peak crop anticipated in a single day has been the basis for the design of trough capacity. The
good essence of withering is well ventilated withering lofts and access of drawing large
volumes of air by the trough fans. The ideal qualities of air required for withering are low dry
bulb temperatures and high hygrometric differences with ample supply. The upward passage
of air through the bed of leaves usually results in the bottom of the bed being withered first
and the upper leaves last. To achieve a more even wither turning over the leaf carefully once
or twice is suggested. However, turning over maybe practically difficult in wider open
troughs. To achieve a more even wither turning over, reversible air flow systems have been
practiced.
It is important that pressure inside the plenum chamber should be constant throughout the
length to have a uniform air flow rate. However, in the conventional troughs the pressure
varies over the length for constant thick spreading. A tapering cross section decreases the area
towards the end and equalizes the pressure inside the plenum chamber.
The method commonly employed to heat the air for withering are as follows:
Direct use of hot air from the drier when it is empty. Hot air ducting to each trough with
damper control from a separate heater. Hot water or steam based insitu radiators in each
withering trough using exhaust air from the drier.
The following two conditions are essential for good withering: storage of fresh leaf for a
minimum period of nine hours is absolutely essential to allow chemical changes to take place
whether a physical wither is desired or not, to make a product with required characteristics,
this is referred to as chemical wither. Physical wither is necessary for good fermentation.
Green Leaf Sifting
Extraneous matter such as stones, sand or metal pieces may find their way in the leaves
brought into the factory; if such materials are fed into the fine-tuned, continuous machines,
34 | P a g e

the moving parts will be severely damaged. Similarly if the leaves were not fed evenly into
these machines, they could become jammed or would not function efficiently. Hence green
leaf sifting is essential prior to processing.
The green leaf sifter is essentially a device for introducing a continuous even flow of
withered leaf to the CTC processing section. It is a vibrating tray, which is perforated with
holes or is of a wire mesh. Powerful magnets have been provided in the green leaf sifter to
remove any iron pieces present along with the leaf.
Reconditioning
In South India, secondary grades and other residues which are obtained while cleaning the
primary grades are ground and recycled with the withered leaf. This process is known as
reconditioning. The primary objective of this practice is to produce grainy grades as well as
tea of high density. It also helps to minimize or eliminate secondary grade teas.
The quantity of recycled material, known as recondition dust, varies from factory to factory,
it depends on the quality of green leaf, the moisture content of the withered leaf and the
standard of machinery available. The percentage of RC is mostly expressed on the weight of
green leaf or made tea basis. However, there is a wide variation in the moisture content of
green leaf and thereby the quantity of made tea produced. So quantifying the amount of RC
material for the made tea to be produced depending upon the green leaf conditions is difficult.
The best practice is that the amount of RC should be calculated on the withered leaf weight
basis.
Leaf Condition
The leaf shredder and rotor vane combination has been found to be ideal to pre-condition the
leaf for CTC processing. The output of both these machines should match with the CTC as
well as Drier capacities.
The leaf is distorted and shredded as it moves along the cylinder and cut into small pieces by
the revolving cutter through which it must pass before it can leave through the apertures of an
iris diaphragm. For good results the rotor vane should crush the leaf along with the RC dust at
the maximum possible pressure. The 8" rotorvane exerts a much higher pressure on the leaf
than does the larger machine, consequently the leaf is much more damaged when passing
35 | P a g e

through it. In the larger rotorvane, a cone end plate is attached at the discharge end to increase
the pressure; the leaf is discharged between the gap of the cone and cylinder.
Rolling
After preconditioning, the leaf is passed through four or five CTC machines arranged in
tandem. The CTC machine essentially consists of two contra-rotating toothed rollers of equal
diameters (20.3 cm or 8"). Depending upon the processing capacity required, rollers with
different width are used i.e. 61 cm (24"), 76.2 cm (30"), 91.4cm(36"). The two rollers rotate
at different speeds. A slow speed roller; high speed roller ratio of 1:10 with speeds between
70:700 rpm and 100:1000 rpm has good effect. The slow speed roller act initially as a
conveyor apart from providing a surface for cutting. In order to derive the maximum benefit
of a good cut, the drop point should be adjusted behind the crown of the slow speed roller, so
that the leaf is conveyed into the cutting area. Otherwise, a portion of the leaf gets thrown
over

the

high

speed

roller

thereby

losing

the

benefit

of

cut.

The speed of the high speed and low speed roller in conventional CTC roller will be 700 to
750 and 70 to 75 RPM, respectively. For Senova (13" dia) roller, the speed will be 560 to 600
and 56 to 60 RPM. The deviation in the speed of a few rollers will result in erratic High
Speed Roller (HSR), Low Speed Roller (LSR) ratio.
The linear speed difference between the rollers should be checked periodically to enhance the
appearance of made tea and to improve the recovery percentage. Difference in the diameter of
rollers leads to different speed in rollers. The pulley size also influences the speed. To achieve
10:1 ratio, proper matching of equal diameter rollers is essential.
Fermentation
It is the practice in south Indian CTC factories to pass the CTC, 'dhool' through a large
revolving drum for 60 - 90 minutes with conditioned air. Rotation of the fermentation drum
facilitates granulation of the tea particles and increases the bulk density which is desirable for
South India CTC teas. In drum fermentation, the whole process is dynamic and the leaves are
constantly rotating. Every bit of tea that is being fermented is constantly layered and exposed
to the fresh air or conditioned air. Rubbing of leaf against leaf takes place and the juices
present in the micro cells of leaf are evenly coated on the exterior of the tea leaf. Drum
fermentation produces blacker teas as compared to floor fermentation. These teas are usually
brisker due to better aeration.
36 | P a g e

Another new and promising aid to fermentation is ultraviolet radiation. Ultraviolet rays have
two functions. (1) It kills external bacteria and other micro organisms (2) it triggers the
activity of polyphenol oxidase and thereby hastens the biochemical reactions. Bright
infusions are obtained by passing conveyor racks which contain fermented dhool through a
UV chamber. It is practically impossible to fix UV bulbs inside the fermenting drum.
However, UV lamps could be easily installed in continuous fermenting machines (CFM).
CFM gives closer control of the entire fermentation process resulting in tea with improved
quality. Leaf spread and run through time are infinitely variable within a selected range to
ensure optimum fermentation under different climatic conditions.
A post fermentation ball breaker is essential. This, while ensuring minimum ball formation
will also increase in the percentage of dust grades.
Drying
The objectives of drying are to:
Arrest fermentation. Remove moisture and produce tea with good keeping qualities
Drying is the most expensive process in the manufacture of tea. The capital investment on the
driers

is

also

the

highest

among

the

different

processing

machines.

Conventional Drying
The principle involved in the conventional driers is that fermented leaf is subjected to a blast
of hot air in such a manner that the hottest air first comes in contact with the tea having the
least moisture content. In these driers, the fermented leaf falls on a series of moving
perforated trays on which it is passed and repassed through a moving stream of hot air.

37 | P a g e

The optimal inlet temperature for CTC processed leaf is 100 5C. The exhaust temperature
should be maintained at 54.4 2.7C (1305F). If the exhaust temperature is less than 49C
(120F), the post fermentation process will continue for a considerable time and will soften
the liquor. This condition is referred to as "stewing".
If the exhaust temperature is greater than 57.2C (135F) the rate of moisture removal is too
rapid and results in case hardened tea in which the particles are hard on the outside but
incompletely dried within; such teas yield harsh liquors and do not keep well. So it is of
paramount importance to ensure that temperatures are kept under control to the extent
possible.
Fluidized Bed Drying:
The tea industry presently enjoys a variety of fluidized bed drying equipments like vibrobed,
five zones and three zones cross flow fluid bed driers. They strive to get increased fuel
economy without affecting quality.
When a fluid flows upwards through a bed of granular particles, the pressure drop is initially
proportional to the rate of flow: At a certain increased air velocity, the frictional drag on the
particles becomes equivalent to the apparent weight and the bed begins to expand. This stage
is known as the onset of fluidization or incipient fluidization.
Further increase in velocity causes the individual particles to separate from one another and
float. Under these conditions the system is said to be fluidized. In fact the relative movements
of the individual particles in the air stream acquire many properties of liquid and have
analogous flow characteristics. Hence the term 'fluidized bed'.
When the fermented leaf enters the drying chamber, it has very high moisture content which
is rapidly reduced in the first zone. At this point, maximum volume of air is introduced since
rapid evaporation is required. As the moisture loss takes place, density of the material is
reduced. This material tends to move away from the feed end as it is being displaced by fresh
materials which contain more moisture and hence have high density.

38 | P a g e

The movement of the tea particles within the drying chamber is governed by the principle of
displacement. When the material is fully dried, it is expelled into a cooling chamber wherein
ambient air is introduced by a forced draft fan.
The desirable inlet temperature ranges from 140 to 150C. Firing at this temperature resulted
in improved leaf appearance and better bloom. The exhaust temperature has to be maintained
at 71.1C (160F) to 76.7C (170F) in the third section. In some driers, exhaust temperature
is measured at the centre of the drying zone along the length, and kept at 57.2 2.8C(135
5F).
Air Heater
The air heater basically exchanges the heat, released from the combustion of fuels, indirectly
to raise the temperature of ambient air for drying purposes. Tea drying is a high thermal
energy consuming operation. Hence, it is essential to know the basis of combustion for the
efficient operation of heater or stove.
Air heaters commonly used in South India are of two types. In the first type, the hot flue gas
from the combustion chamber passes through the tubes of a heat exchanger. In the other type,
it flows outside the multitubular heat exchanger. The former is most common and suitable for
fluidized bed driers.
The selection of the stove should be based on the compatibility with the drier in regard to
heat requirement as decided by the fan characteristics such as air volume and total pressure.
Any under rating of the air heater implies burning more fuel than the stipulated quantity and
results in higher flue temperatures. The efficiency of the heater is mainly determined by the
heat transfer area, insulation, type of fuel used, combustion control and design of the furnace
itself.
Grading and Sorting
Sorting is the operation in which tea particles of the bulk are separated into various grades of
different sizes and forms confirming to trade requirements. In other words, it basically
converts the bulk into finished products.

39 | P a g e

The process of sorting has two objectives (i) to enhance the value (ii) to impart quality.
Grading of the manufactured bulk is therefore, undertaken to improve its marketability and to
obtain the premium that different buyers are willing to pay for the size of their preference.
Cleaning of fiber is also part of the sorting procedure which is directly related to value
enhancement.
Sorting enhances the appearance and quality of liquor; at the same time it can also deteriorate
the quality. The presence of fibre or flakes of coarse leaf in a primary grade causes harshness
and their removal makes the liquor mellow. The cleaning of fibre also improves the black
appearance of tea which is desirable.
Bloom is indicative of liquor character; over sorting and over cleaning can result in loss of
bloom. Usually a tea which has not been well fired loses bloom more quickly. If tea absorbs
moisture during the cleaning process, liquors can deteriorate and its keeping quality reduces.
Sorting of bulk has to be done in three stages.

Cleaning of fiber

Grading

Winnowing

Currently, PVC rollers are being widely used to remove the fibres as well as flaky teas from
the rest of the bulk. The principle involved here is that PVC rollers are (static) electrically
charged by the contact of a sponge like material known as felt. Fibre and flaky teas differ in
many characters like moisture content and density from the rest of the tea.
These electrically charged rollers preferentially attract the fibre and flaky teas which are
higher in moisture content and thereby, they are removed from the bulk. If teas are exposed
for longer time in the humid conditions, the difference of moisture content between fibre and
rest of bulk narrows down; this reduces the efficiency of the removal from the bulk.

40 | P a g e

Grades in CTC Teas

Brokens

PEK
BP
BOP
BPS
BP1
FP1
Fannings OF
PF
PF1
BOPF

Dust

41 | P a g e

PD
D
CD
PD1
D1
RD
FD
SFD
RD1
GD
SRD

Pekoe
Broken Pekoe
Broken Orange Pekoe
Broken Pekoe Souchong
Broken Pekoe 1
Flowery Pekoe
Orange Fannings
Pekoe Fannings
Pekoe Fannings One
Broken
Orange
Pekoe
Fannings
Pekoe Dust
Dust
Churamani Dust
Pekoe Dust One
Dust One
Red Dust
Fine Dust
Super Fine Dust
Red Dust
Golden Dust
Super Red Dust

CHAPTER IV
PACKING DEPARTMENT
Teas are packed in airtight containers in order to prevent absorption of moisture, which is one
of the main causes for loss of flavour during storage. Packing chests are usually constructed
of plywood, lined with aluminium foil and paper, and sealed with the same material.
Corrugated cardboard boxes lined with aluminum foil and paper sacks lined with plastic are
also employed. Jute bags lined with BOPP liners are extensively used for the packing of tea
in the Industries. As timber is becoming scarce and consequently expensive, the multi wall
paper sack proved to be suitable alternative and is being widely adopted in the tea industry.
Grades in Orthodox Teas
Whole leaf FP
Flowery Pekoe
FTGFOP Fine Tippy Golden Orange
Pekoe
TGFOP Tippy

Golden

Orange

Pekoe
TGFOP1 Tippy

Golden

Orange

GFOP

Brokens

42 | P a g e

Pekoe one
Golden Flowery Orange

Pekoe
FOP
Flowery Orange Pekoe
OP
Orange Pekoe
BOP
Broken Orange Pekoe one
GFBOP Golden Flowery Broken
BPS
GBOP

Orange Pekoe
Broken Pekoe Souchong
Golden Broken Orange

FBOP

Pekoe
Flowery Broken Orange

BOP
Fannings GOF
FOF
BOPF

Pekoe
Broken Orange Pekoe
Golden Orange Fannings
Flowery Orange Fannings
Broken Orange Pekoe

Dust

Fannings
Orange Pekoe Dust

OPD

OCD
BOPD

Orange Churamani Dust

Broken Orange Pekoe

Dust
BOPFD Broken Orange Pekoe Fine
Dust
FD
Fine Dust
D-A
Dust - A
Spl.Dust Special Dust
G. Dust Golden Dust

CHAPTER V
HUMAN RESOURCE DEPARTMENT
Labour Welfare

Continuous gainful employment

Free housing

Free education

Free Medical Treatment

Creche facilities

43 | P a g e

In addition to salary/wages, the workers benefit welfare means uses like rent free
accommodation, free water supply, free medical attendance, primary education, maternity
benefit, leave with wages, sickness benefit, holiday wages, supply of warm clothing, free
supply of liquid tea at work spot, family planning incentives, bonus, incentive for tea leaf
plucking and job differential to skilled workers.
Labour Statistic
Permanent workers

- 250

Casual workers

- 150

Total

- 400

Wage Rate

- Rs. 116.85 per day/per worker

Wages to the workman

Basic wage

- Rs.78.00

Dearness Allowance

- Rs.38.85

Total wage

- Rs.116.85 per day

In addition to that, the following job differentials are being allowed to the following category
of allowance.
a) Factory workers.

- Rs. 2.10 per day.

b) Pruners

- Rs. 1.90 per day.

c) Sprayers (Power).

- Rs. 1.75 per day.

d) Sprayers (Knapsack).

- Rs. 1.35 per day.

e) Watch & ward work

- Rs. 1.45 per day.

f) Sweepers.

- Rs. 1.60 per day.

g) Creche Cook.

- Rs. 1.35 per day.

h) Office Boys/ Tapalman

- Rs. 4.75 per day.

i) Carpenters.

- Rs. 5.00 per day.

j) Plumbers/ Pipe Fitters.

- Rs. 3.75 per day.

In the Tea Factory the workmen who are working during the night shift (i.e.) 10.00 pm to
6.00a.m are entitled to Night Shift Allowance of Rs.1.50 per day.

44 | P a g e

Statutory Benefits
1. Rent free accommodation (Housing),
2. Provision of Drinking water,
3. Free Medical facilities,
4. Maternity leave with wages for 84 days,
5. Leave with wages for 15 days,
6. Sickness Allowance for 14 days in a year at 2/3 wages,
7. National and Festival Holidays for 9 days (with wages in a year),
8. Supply of protective clothing, field crumbly and Rug
Other Benefits
1. Employment Assistance to the dependents of permanent workers
2. Free Liquid Tea at work spot.
3. Family Welfare Incentive rates paid to men and women workers

CHAPTER VI
FINANCE DEPARTMENT
To acquire, purchase and take over estates that are offered for sale from time to time in and
around Karumbalam which the company considers profitable with all or any of its fixed and
floating assets, goodwill, rights, licences, quota rights etc and to pay for the same and to carry
on the said business in such manner and on such scale as may be considered desirable from
time.
To carry on the businesses of planters, cultivators, sellers and dealers in tea and other
45 | P a g e

commercial crops of every description and to manufacture, dispose of, sell and deal in
products of such crops inside and outside the State of Tamil Nadu. To purchase; lease or
otherwise acquire, hold sell, develop, manage, work, exchange, make advances upon, turn to
account, dispose of and deal in or in any interests in, lands, concessions, estates, plantations
and agricultural lands, and to cultivate, grow, cure, prepare, for the market, manufacture, sell
and deal in tea in all its forms and generally to carry on the business of small planters and
growers of and dealers in produce and merchandise.
Project Components and their Tentative Cost
Land and Land Development

(Rs. in lakhs)

Cost of Land (14,000 sq. metres)

5.00

Cost of Leveling/Development

4.00

Cost of Approach Road

6.00

Cost of Boundary Wall & Fencing

5.00

TOTAL

46 | P a g e

20.00

Civil Works

Main Factory Building(1500 Sq.M)

90.00

Trough House (800 Sq.M)

75.00

Trough House (1000 Sq.M)

35.00

Water Tank (Overhead)

4.00

Water Tank (Underground)

3.00

Genarator Room & Workshop

3.00

Civil Work for Weight Bridge

2.00
TOTAL

212.00

Plant & Machinery

Processing Capacity 30 lakh kgs. of green tea leaves

Excise Duty & other Taxes

25.00
TOTAL

Miscellaneous Fixed Assets

Office Furniture & Fixtures
Computer
Electrification for the Factory & Water Dist.
Fire Fighting Equipments
S.E.B. Deposit, Transformer Etc.
D.G. Set
Air Compressor
Vehicle (Truck)
Other Machineries Tools & Tackles
Total
Pre-operative Expenses

47 | P a g e

160.00

185.00

2.50
0.50
13.00
1.00
7.50
10.50
1.50
10.50
3.00
120.00
48.00

Margin Money for Working Capital requirement for one month.

Total

Raw Material
Electricity Charges
Salary& Wages
Stores & Spares
Overhead & Packing
Stock Of Finished Goods
Stock Of Goods In Process
35.00
Total Project Cost

5.00
5.00
4.00
0.20
0.80
18.00
2.00
-

620.00

Comparative statement for the past few years

S.N
o
1

2
3
4

Particulars
Members
i. No of Members
ii. Share Capital
iii. Thrift Deposit
Loan Funds
Investments
Green Leaf
i. Purchase of Kilo grams
ii. Total purchase of Cost

201011

2011-12

2012-13

2013-14

732
4638875.66
666807.86
7652993.18
1265476.00

732
4638875.66
748415.11
5752279.41
1914563.00

933
4661205.66
820561.61
3649875.41
1475882.00

935
4662205.66
910853.51
4688225.34
1730184.00

1701000

1917869

18697993

2353946

kgs
kgs
kgs
13384887.0 15894613.7 27792006.0

0
iii. Average cost of Green leaf 7.87
5

per kilo
Made Tea Production
i. Production in kilos
ii. Cost of Production
iii.

Average

Cost

Production per kg
iv. Percentage if Out turn
Made Tea Sales
i. No. Of Kilos Sold
ii. Total Sales

iii. Sale Average

Tea Trading Account

48 | P a g e

5
8.28

0
14.86

459210 kgs 513115 kgs 514385 kgs

22035033.6 23020247.3 36699095.1

kgs
30998494.9
0
13.16

650500 kgs
44854182.3

0
of 47.98

5
44.86

4
71.35

0
68.95

27.07

27.24

27.45

27.83

528257.50

606218.50

458124 kgs 547725 kgs

kgs
21626767.7 27254591.2 41908389.0
5
47.21
-852588.37

5
0
49.75
79.33
+2298732.8 +3123671.7

kgs
43484328.5
0
72.40
-

10
11
12

Gross Profit/Loss
9
5
Expenses
i. Green Leaf Collections and 7850099.10 9555663.07 35583207.4

1356337.83

Manufacturing Expenses
ii. Tea Trade Charges
iii. Establishment and

9
2443638.00
1482148.90

6
1326253.75 1722908.74 1930075.89
1438392.52 1589500.17 1723352.47

Contengencies Paid
iv. Interest
666728.00 1224651.00 610381.00
Income
i Miscellaneous Income
43643.00
3050716.43 152663.36
ii. Rebate and Subsidy 3840000.00 2900000.00 800000.00

12510201.0

476107.00
151999.35
3300000.00

received
Net Profit/Loss

+231134.91 +1922315.6 +430129.20

Cumulative Loss

0
16749888.3 14827572.7 14438361.5

2174171.42
16612532.9

Audit Classification

7
C

9
C

49 | P a g e

7
C

7
C

CHAPTER VII
MARKETING DEPARTMENT
As per government of Indias direction, 75 % of the tea production has to be sold only
through auction sales. Karumbalam INDCO tea factory is sending its made-tea to various
auction centres, namely Bangalore, Cochin, Coimbatore, Coonoor and Kothagiri.
Sales Promotions
Upgrade powders and a quality of a powder is the mostly used product to promote to
sales of the factory. To promote a sale the factory is maintaining a proper relationship with
quality with quality customers. The regular customers will be treated in well manner.
Pricing Strategies
The price will be fixed based on the grade levels. First grade, second grade and third grade
for a first grade the factory will fix a rate based on season. In well setting time the price will
increase when it comes for a normal stage the price rate also will change.
Last year pricing strategy
First grade

- for 100kgs

= Rs. 27,000

Second grade - for 100kgs

= Rs. 23,000

Third grade - for 100kgs

= Rs. 15,000

Some time a company will go for auction sales. In auction base sales the factory will see the
rate and profit for a factory. And also they will sell the product
Raw Material Purchasing
The company will fix a price for raw materials also. For a young leaf for 100kgs Rs 7,000 is
fixed. The company is maintaining a credit base purchase, mostly based on weekly, monthly
from the sellers. The credit purchasing amount is settled in 2 weeks from the date of
purchasing. The regular purchase the sellers allow for credit purchase and for a new customer
they have to pay the full payment.

50 | P a g e

Price Fixation Technique

In the creation of the demand for the product at the seasonal time the high prices is fixed. In
the off seasonal time some of the product cant move successfully so the price may be change
to reduce.
Customer Feedback
Mostly feedback will not be collected from all customers. When a regular customers have any
idea to give a feedback. The factory will go for the feedback measures at that time all dos
and donts will be measured. To motive the sales the factory is giving some discounts to
regular customers and maintaining a proper relationship with all regular customers. There is
no market analysis.
Intermediarys
Mostly brokers will work for a commission. The commission percentage between 5% to
10%. The brokers will work for all factories.
Fore Casting
Mostly fore casting depends on production. When a demand increases, that will be known
easily by the factory before it rises. Increasing the raw materials purchase all the fore casting
techniques maintained by the company.
Quality Management
The factory is maintaining a quality management technique. Weekly testing, daily testing is
done before selling the tea powder and the quality will be tested. The factory is differentiating
their product based on the quality and brand.
Sales Return
Mostly this factory is not going for any sales returns. When a product returning back to
factory they will go for a reprocessing after a reprocess they will sell it to another customer.
Payment Systems
All types of customers will not go for any credit purchases some regular customer will use
this credit purchase. The credit sales are permitted to 15 days payment, monthly payment and
weekly payment both for raw materials and also for the product (tea powder).
51 | P a g e

Presentation
Presentations are given by showing demo for customers about a product when a bulk sale
takes place. They will show a demo to customers to show their quality (strong of tea) and
explaining about their product how its different from others. The company is not going for
any out sourcing activities.
Target
The company is having some target achievement it differs from one year to another year.
Mostly how much kg tea powder must be sold that will be marked by the management and
produced based on it.
Urgent Orders
When an urgent order comes they will go for some over time activities mostly raw materials
will be stocked so the factory is not worrying for an urgent order.
Procurement
Through auction the raw materials will be purchased because the factory is maintaining a
proper relationship with all the sellers.
Exporting
The factories are exporting the products to the abroad countries.

52 | P a g e

TEASERVE
TEASERVE The Worlds first Electronic Tea Auction Centre

In acceding to the representation made by the Small Tea Growers of the Nilgiris District, the
Government accorded permission for setting up of an Electronic Tea Auction Centre vide
G.O. MS Mo.36, Small Industries Department, dated 16.07.2002. accordingly the new Tea
Auction Centre under Cooperative sector in the name of TEA MANUFACTURERS
SERVICE INDUSTRIAL COOPERATIVE SOCIETY LIMITED, shortly called as
TEASERVE was Registered on 28.08.2002 and started on 13.09.2002 at Coonoor in the
Nilgiris District. The TEASERVE commenced its Electronic Auction proceedings with effect
from 01.10.2003.
TEASERVE A Cooperative Federation of Small Tea Growers

As the entire Auction proceedings of the TEASERVE are computerized, the exploitation of
middleman is avoided and registered buyers alone could participate in the electronic auction
proceedings.
Membership and Share Capital
Seller Members
The TEASERVE has 168 Seller Members on its roll with a paid up
capital of RS.13.35 Lakhs, which includes the Government Share
Participation of Rs.5.00 Lakhs.
The details of the sector-wise tea factories enrolled as Seller Members
in TEASERVE are as follows:
I
Indco Tea Factories
16
II Private Bought Leaf Tea Factories
133
III Private Estate Factories
16
IV TANTEA
1
V
Government of Tamilnadu
1
Total

167

Registered Tea Buyers

176 Tea Buyers & 428 Interstate Buyers have so far been registered in
TEASERVE as on date.

ADVANTAGES WHEN COMPARED TO OTHER AUCTION CENTRES

LESSER TRANSACTION TIME

53 | P a g e

OTHER AUCTION
TEASERVE
Catalogue Closing Time
Buyers Prompt
Sellers Prompt
Total Transaction Time
Days

11 Days
14 Days
2 Days
27 Days

9 Days
12 Days
2 Days
23

While the other auction centre are allowing a drawl of sample at 3 kgs per lot, TEASERVE is
drawing only 1.5 kg per lot

54 | P a g e

EXECUTIVE SUMMARY

There are 15 Indco Tea Factories with an annual installed capacity of 14 Million Kgs
of Made Tea.
Accounts for 20% of the tea production in the Bought Leaf Factories in Tamilnadu..
Accounts for 10% of the Total Tea Production in Tamilnadu. Over 40% of the small
growers (i.e. 21,500) are under its fold.
It has got first ISO 9001:2008 certification from DNV The NETHERLANDS for Tea
Warehousing Services in Tamilnadu.
It has got ISO 9001:2008 certification from DNV The NETHERLANDS for its
Marketing, Blending and Packeting activities.
Sale of an average 250 Metric Tones of packeted Tea per month under the brand name
OOTY TEA through Tamilnadu Civil Supplies Corporation and Cooperatives
Whole sale Stores throughout Tamilnadu to the general public through the Public
Distribution System.
Within 3 years captured 10% of the market share in Tamilnadu in Tea Sales.
Moving towards achieving self-reliance.

55 | P a g e

CHAPTER VIII
CONCLUSION

My stay at INDCO was indeed very beneficial to me as it was more of learning than
just working. I got very good co-operation from all the employees at INDCO plant during my
organizational study.
The project study was successful in identifying the process and sub process existing in
the organization under study with reference to their inter-functional implication and
dependencies. The project study has also brought into light the working methodology of some
key functions of Production, Finance, marketing, HRM etc. The organizational completeness
is visible through the study. This study as ascertained that the organization is functioning
successfully because of micro and macro level of management principles in practice. This
study is also successful growing at with various management techniques that are visible in the
organization under study by which new principles can be derived for continuous
improvements, survival and growth to achieve the desired level of excellence in the
competitive scenario of industrial management.
The high performance of INDCO is the effort of the management and the worker in
the organization for its high growth and increased sales and with effective operations
management.
Every organization makes sure that its employees are satisfied and are happy working
in the organization. Every working person expects some benefits from its organization apart
from the basic salary paid to him for his work. An employee tends to be more satisfied from
the additional benefits that he obtains from the organization. INDCO one of those
organizations who provides excellent benefits to its employees and makes sure that its
employees are satisfied and contended working in the organization.
With the financial stability already achieved and the technical knowhow, the company now
stands well to meet challenges of future with confidence.

56 | P a g e

57 | P a g e