Healthy Brew: Differently-abled children benefit hugely from the training provided at Tata Tea’s vocational centres (Pic By C.P. Shanmugham)

Banumathi is just one among more than 100 men and women of Kannan Devan hills whom Tata Tea has helped lead a better life. And Aranya is not the only corporate social responsibility (CSR) initiative of the company. It is just one of the many such initiatives taken by the 140-year-old Tata Group that has CSR wired into its DNA. Tata Tea conducts month-long cleaning programmes and soil conservation projects to keep the area plastic free. It also runs Dare School, at Munnar, a school which offers education to differently-abled children below 18 years, after which they are trained in several vocations at the centres.

The produce of these centres accrue to KDHP (Kannan Devan Hill Plantations), the company that now owns and runs the Munnar plantations of Tata Tea. In 2005, Tatas had sold for Rs 9 crore 74 per cent stake in the plantations to the 13,000-strong workerforce, making KDHP a rare instance of a company that is owned and run by its workers. In fact, it is amongst the biggest employee participatory management companies in the world. ICICI Securities had extended debt for the acquisition.

Tea plantations such as those in Munnar and the ones along the Brahmaputra Valley — where too rehablitation centres and other CSR inititatives specific to the region are running — form a negligible part of Tata Tea’s overall business. Tata Tea still fully funds and run them (including those in Munnar) since it feels, “the Tata Group’s heritage of wealth was built on these plantations,” according to its MD P.T. Siganporia. The company is now taking these efforts the next level.

Road To Self-sustenance
Tata Tea wants to develop the various rehabilitation units into independent profit centres that undertake a range of operations — from food processing to papermaking. At the same time, they would also continue to serve as independent rehabilitation centres. “We need to make high-end products where the margins are better,” says S. Swaminathan, director of special projects at Tata Tea. Some of the more-than-a-decade-old rehabilitation centres at Munnar — Shrishti, Aranya and Athulya — have already made some headway. The entire stationery requirement of KDHP is met by the handmade paper unit. The unit makes 150-200 sheets of premium handmade paper a day — that sell for Rs 20 a sheet compared to Rs 3 for the normal variety — for sale in Kochi 135 km away. It supplies 150,000 paper bags every year to Tata Tea for use in selling tea. “Demand has never been a problem,” says Viji Arun, head of the stationery unit. “So, we have not explored marketing seriously.” Started with some ordinary items in 1991, the stationery section now has gas boilers and makes boxes, and boasts of screen printing.

Aranya is using Munnar’s natural wealth — its bountiful flora and fauna — for constructive purposes. Workers here have been trained in ‘shibori’, the famed Japanese tie-and-dye method. “The work has improved a lot and members are learning new techniques,” says Victoria Vijayakumar, who runs the unit. Supervisors and trainers at Tata Tea’s vocational centres encourage the people they train to take up careers outside. While most workers tend to stay on, some, like Mohandas, a differently-abled son of a plantation worker, seek out greener pastures. Trained in printing, he landed a job in Tirupur. A few others in the tie-and-dye section have also moved to processing and garment units in Tamil Nadu. “Every person at the centre should feel that he is making his own profits,” says Swaminathan.

Its biggest contribution to the region is a nearly century-old hospital, the only comprehensive answer to the health care needs of the hill station and a large number of remote areas.

Challenges Remain
Scaling up of the various units remains an issue even in sections with high revenue potential. “We can’t do it commercially since volumes are not high,” admit officials. The scaling up problem manifests itself in education, too.

Admissions to the main school for plantation workers and staff near Munnar (also run by Tatas) are made highly competitive and difficult by the capacity constraints. Workers’ children get free education— 90 seats or 17 per cent of the total strength are reserved for them. That is too little for the 14,000-odd plantation workers in the area. Tata officials admit that expansion of the school is a top priority. Their efforts, however, are hamstrung by the procedures involved in setting up infrastructure in the area’s hilly terrain. The special projects group has begun toying with the idea of starting an international school and using money from the venture to bring more children under the subsidy net.

Tata Tea is also doing its bit to save the environment. The stationery unit, for instance, uses cotton and tea waste, eucalyptus leaves, waste fibre, lemon grass, vegetable and hosiery waste, and even elephant droppings to make paper. “These initiatives have won the company a lot of goodwill among the local populace,” says Sajan George, secretary of the Munnar Environment and Wildlife Society. On the external front, Tata Tea executives visit distributors regularly to conduct quality checks. Old stocks are destroyed instantly. The company also adopts tea shops, conducts welfare audits, patient and parent satisfaction studies. It hires external agencies for audits, scrutinises the findings in detail and takes corrective action.

Since Tata Tea is now largely a beverage brands company, it is replicating its model of self-sustainable CSR projects across its main business. A year and a half ago it launched along with some NGOs a Gao Chalo Andolan across 12,000 villages in Uttar Pradesh. Young rural and largely OBC men and women are selling 100 tonnes of Tata Tea tea a month in these villages, adding Rs 75-100 to their daily earnings. By dealing directly with them, the company has also side-stepped distributors — an example of integrating social responsibility into mainstream business. “I am only approving those CSR projects that have the potential of becoming profitable and therefore self-sustaining,” says Siganporia. Way to go.

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(Businessworld issue 20-26 May 2008)