Tata Chem bets big on food retailing

It will soon announce a broader plan to take the business forward through a consumer products division

Chemicals and fertilizers company Tata Chemicals Ltd sees food and farm product retail as a key portfolio in its future businesses. The company, which has made the group's agrochemicals and plant technology firm Rallis India Ltd its majority- owned subsidiary early this year, will soon announce its broader plan to take forward the new busi- ness through a full-fledged consumer products division, said a senior Tata Chemicals executive.

The company kicked off the exercise on Tuesday by launching four variants of India's most commonly used pulses (or lentils) in the retail market. Branded as an extension of its iodized salt brand i-Shakti, these products, according to the company, are the first branded pulses to be sold across the country. Earlier this year, Tata Chemicals had also launched a water purifier--Swach--to tap the growing clean water market.

“With an existing retail net- work that the company has established for consumer products, and also with the agriculture expertise of Rallis India, we will look at adding several farm products to the food re- tail business”, Tata Chemicals managing director R. Mukundan said. Tata Chemicals has two brands of salt and a water purifier in the domestic market launched under a segment called living essentials. The two other segments where the company operates are industry essentials (chemicalls) and farm essentials (fertilizers).

“We will soon announce the broader plan”, Mukundan said, declining to give more details.

The company has set itself a target of selling half a million tonnes of branded pulses in next five years.

“Pulses are not only a rich source of protein, but also the mainstay of every Indian's diet, and India is probably the only nation that depends heavily on pulses as its staple food”, Mukundan said. Over the past few years, the price of pulses has risen with the demand-supply gap widening; farmers, till recently, were not too keen on growing pulses. Currently, India produces 15 million tonnes (mt) of pulses against a demand of 18 mt.

“I-Shakti brands were launched with the mission not only to increase production of pulses in India, but also to pro- vide reliable and hygienic product to Indian house- holds”, Mukundan said.

The company will sell these branded pulses at `85-100 per kilo ramme in the domestic market.

On Monday, Tata Chemicals announced its agreement to acquire the UK-based salt manufacturer British Salt Ltd for `650 crore. This acquisition will mainly ensure a secured supply of raw material to its soda ash manufacturing facility.