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TGBL to transfer its FMCG business to Tata Chemicals

TGBL has been working towards an organisational structure and moving more activities to India in terms of back office and technology-related work.

ET Bureau|
May 15, 2019, 12.23 PM IST
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BCCL
Chandrasekaran-bccl
Chandrasekaran initiated this strategy to reduce overlap between group companies and consolidate businesses sharing similar synergies.
MUMBAI: The boards of Tata Global Beverages (TGBL) and Tata Chemicals are slated to meet today to consider the proposal to merge its consumer products businesses under a single entity. Tata Global Beverages is expected to house the consumer products such as branded edible salt, pulses and spices owned by Tata Chemicals.

This is part of the strategy initiated by Tata Group Chairman N Chandrasekaran to reduce overlap between group companies and consolidate businesses sharing similar synergies and adjacencies within the conglomerate. The impending reorganisation will also result in the rechristening of Tata Global Beverages to a more suitable name to reflect the induction of the new names.

The modalities of the merger have been long drawn out in the group’s foods and beverages businesses, and ET had first reported on September 3, 2018. “There are no final plans yet. Building a single consumer vertical is the biggest challenge compared to other verticals,” a TGBL executive had told ET in September, last year.

“Tata Global Beverages’ ambitious growth plans require us to operate with greater efficiency, reduce our cost base and fully tap the potential synergies across our businesses that operating on a global scale can bring us. There is also a significant opportunity to better leverage technology in service delivery," the TGBL spokesperson had then said in response to ET's query.

TGBL has been working towards an organisational structure and moving more activities to India in terms of back office and technology-related work. The Indian market contributes 45% to the company's business.

The move to consolidate the consumer goods businesses of Tata Chemicals with Tata Global is expected to free the company’s business managers to focus on core activities, bring in agility and spur faster decision-making, as it seeks to become one of the largest FMCG companies in India with a possible merger with group firm Tata Chemicals.

The transition process is expected to be completed by the end of 2018-19, ET had said then.
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