new market entry in russia
DESCRIPTION
Warren tea limited(India) enter in to the Russian tea market by joint venture.TRANSCRIPT
WARREN TEA Ltd. INDIA
New Market Entry In Russia
ByANKUR PATELMBA (IB)AMITY INTERNATIONAL BUSINESS SCHOOL
Company Background
• The Company was incorporated on 31st May 1977 in the state of Assam
• Warren Tea Limited is the flagship of the Warrens group
• Cultivation of tea plantations, manufacture of machinery for processing tea
• 14 tea estates with total planted area under tea measuring about 6,078 ht.
• Carry on the business as warehousemen, shippers and exporters
• Warren Tea Limited produces 16 million kg of tea annually
• The produce of the Company is savoured across 50 countries
• One of the largest bulk tea producers in India and in the world
3
Current International Business
RUSSIATarget
The company exports its products to the United Kingdom, Germany, Ireland, North America, Pakistan, Iran, and the Middle East.
Why Go GLOBAL?
To increase sales, revenues, and
profits
Competitive advantages in new
markets
Excess capacity
Limited or declining home
market
Domestic competition
entering international
markets. “Competitive
response.” Eg: Tata Tea’s entry in to the U.S., China, and other global
markets; J.V. Gokal’s entry in to
the Russian market.
Global consumers' tastes are
converging. Easier to offer a globally standardized product.
Lower costs and higher prices -
opportunities for profit
70% of Russians' income is
disposable vs. around 40% in the
West
Russia: top location for global
retail
Why RUSSIA?
Surging Econom
y
Real GDP
Growth ↑ 8.1% to $1.3 trillion
The fastest
growing economy in the
G8 group
of industrialized
nations
Investors
pouring money
into improv
ed storage facilitie
s, infrastructure,
and logistics
Improving
financial
services, rule of
law, and
banking infrastructure
FDI into Russia reach $58
billion in 2008,
an increas
e of about 16%
compared to the
value in 2007
“Even as the
financial crisis shows
no signs of abating
and deleveraging
continues,
Russian econom
y will remain strong becaus
e of very low
levels of
public debt.”
Political Factors
Government seeking to streamline customs and taxation regimes to
Government focus on expanding manufacturing base and improving
New reforms targeting bureaucracy and corruption
E- commerce, including B2B ecommerce
Supporting the E-Russia program, designed to stimulate growth of
Attract more FDI
Infrastructure development
Opportunities for Indian Tea Companies in the Russian Tea Market
CATEGORIES GLOBAL INDIA RUSSIA
Market size in terms of retail value 23,323 876.4 3,266
Market size in terms of retail volume 1,765 226.04 161.44
Growth rate in terms of retail value (08-09)
4.50% 3.50% 12%
Growth rate in terms of retail volume (08-09)
3.50% 2.60% 2.30%
Per capita consumption (per kg) 0.3 0.7 1.3
Average retail price (in US$ per kg) $13.20 $3.90 $20.20
Growth rate in retail price (2008-09) 0.90% 0.90% 9.50%
Forecast of Tea Volumes by Sub-sectors: 2010-2012
2010 2011 2012230000
232000
234000
236000
238000
240000
242000
244000
246000
248000
239745
243099
245822
235900
239101
241683
Tea Black Tea
Opportunities for Indian Tea Companies inthe Russian Tea Market
Opportunities
Total value of Russian tea imports in 2009
was $308.97 million, which is nearly 14% of the global market
Largest importer of tea in the
world
Retail volume growth rates of 15% and 12% in black standard tea
bags and black specialty tea bags
respectively, in 2009.
Entry mode - Joint Venture
Provides access to government contacts and existing distribution network
Provides local help minimizing problems associated with bureaucracy and corruption
Pooling of resources
Sharing of profits and risks Time-to-Time market advantages
TO Have Joint Venture Between
Warren tea Ltd can enter into joint venture with local Russian tea industry like..
1.Orimi Trade2.MOSCOW TEA FACTORY LIMITED COMPANY
Conclusion
• Business relation between Russia and India are better.
• India tea industry have a great opportunities to enter in russian market.
• Benefited of world largest importer country.
THANK YOU