KARACHI, May 13: Indian tea giant Tata is arriving in Pakistan next October with the UK-based Tetley Tea as its front to begin blending at Hub near Karachi, and marketing in all parts of the country.

The Tatas have gained entry in Pakistani market through Tetley Tea, a UK-based tea company, acquired by Tata Ltd India about two years ago. Tetley has signed joint venture agreement with Colgate Palmolive Pakistan Ltd (CPPL), a strong arm of Lakson Group. The two companies signed a joint venture investment of Rs150-170m a few months back.

A senior executive in CPPL, who declined to be quoted, told Dawn on Tuesday that the joint venture has already established its tea blending plant in Hub, Balochistan, and it “is expected to commence its operations in coming October.” He clarified that the launching of the product Tetley Tea was October and not January 2003 as was indicated by a few market analysts.

“Our plans are well ahead with the schedule and there are possibilities that the production may kick off even before October,” the executive said.

Tetley’s collaboration with a local consumer giant may pose problems to Unilever Pakistan owing to Lakson’s strong and well entrenched distribution network. The company is already giving a tough time to Unilever in various consumer goods segments namely detergents, toothpaste and personal grooming products.

“We are targeting to capture five to seven per cent market share in our first year of operation,” Colgate’s executive said adding that total annual tea sales of Unilever and Tapal valued Rs8.3 billion and Rs4.5 billion respectively.

“We are hoping to take away the sales of Rs800-850 million from the two leading market players,” the executive said.

About pricing he said the company intends to keep the prices at par with those of old market players.

“We have planned to import tea from Kenya and Sri Lanka due to (their) good aroma and taste,” he said adding that the company may also use Indian tea for blending.

Pakistan is the third largest tea importer of the world. It mainly imports tea from Kenya, Bangladesh, Sri Lanka, Indonesia, China and some African countries. In 2002, the country imported 97,827 tons of tea worth $146 million down from 107,000 tons worth $175 million in 2001. Officials of Pakistan Tea Association (PTA) say tea smuggling in 2003 may reach to 40,000 tons. Loose and packed tea have a 45:55 per cent share in the local market.