Nov 08 (LBO) – Sri Lankan branded tea exporter Imperial Teas may look at setting up subsidiaries in countries like China and even Kenya, to develop its brands and manage its supply chain.
The company commissioned a study by MTI Consulting to develop a game plan for expansion and jumpstart almost stagnant growth over the past three years.
“What we recommended was for the company to look at how they can expand globally and set up operations on a regional basis, rather than a country basis, to develop its brands and also for supply chain synergies,” Sahan Kulatunga, Business Analyst at MTI Consulting said.
“Sri Lankan exporters need to shift from an export mind-set to a brand developing mind-set”..In doing so we need to go international, and to do so effectively Sri Lankan companies need to set-up subsidiaries in global markets with full-time foreign staff to optimize on the global market opportunities.”
Among the suggested regional countries to set up subsidiaries is top tea producer Kenya as well as China in the Far East to source supplies for its value added brands.
Imperial Teas is among a list of top ten Sri Lankan tea exporters, according to the country’s Tea Board, with exports to over 60 countries under its brands “Impra” and “Miad”.
Most of its sales are concentrated in Russia and the Middle East, though the company declined to comment on export volumes or future plans.
Tough competition in the tea industry however prompted Imperial Teas to take this route to plan future expansion, Kulatunga said.
The tie up with MTI also involved suggested changes to the company’s corporate structure to fall in line with the new expansion plan.
Sri Lanka is one of the largest tea exporters in the world, producing over 300 million kilos of black tea a year, though most of this is still exported in bulk form.
Value added teas account for about 36 percent of total exports in the form of tea bags, packets or flavoured teas.
MTI Consulting is an international management consultancy firm with operations in Bahrain, Dubai, UK, India, Austria, Pakistan, Sri Lanka, Mexico and Bangladesh.