Tata Global Beverages, the world’s second largest branded tea company, has reorganised the regional president structure it had created around three years ago as it aims to cut costs and exploit synergies to conserve capital and invest behind its power brands.

Ajoy Misra, deputy CEO, Tata Global Beverages, confirmed the company had disbanded operating structure of six regional presidents first announced in 2009. The earlier structure aimed for decentralised operations with business heads given a mix of markets where the firm had strong distribution and others where the company had a relatively marginal presence. The presidents were only responsible for sales, marketing, advertising and promotion by focusing on the customer. Manufacturing and factories were managed separately.

“Instead of the six regional presidents earlier, we now have three, Steve Rice, regional president Canada, America and Australia; Nigel Holland, regional president, UK, Middle East & Africa and Sanjiv Sarin, regional president, South Asia,” said Misra. Rice and Holland are also part of Tata Global’s five member executive management team which runs its global operations. Earlier, the six regional presidents were Holland, Garry Nield, Barbara Roth, Rice, Sangeeta Talwar and Pradeep Poddar in charge of Asia Pacific. Talwar left the company in August 2010 to join NDDB Dairy Services. “Post the restructuring of the regions, Roth and Nield too have left services of the firm. Poddar remains MD and CEO at Mount Everest Mineral Water, an associate of Tata Global,” said a top company official familiar with the developments.

“We consolidated regions to avail of synergy benefits by deploying a common approach to marketing and advertising and rationalising manpower. After two to three years of earlier structure, we felt we should be measuring performance over a larger territory. The larger regions also allow products and processes successful in one part to be deployed in a speedier manner elsewhere,” said L Krishnakumar, group CFO at Tata Global Beverages.

The firm has reduced its debt levels by paying back high cost dollar and pound denominated debt which has helped reduced consolidated interest costs to almost a fourth year-on-year, to Rs 3.92 crore as of end December 2011. The firm saw its consolidated group net profit in quarter ending December 2011 dip 10.94 per cent to Rs 64.06 crore despite net sales rising 11.9 per cent to Rs 1,793.2 crore.

ypitalwalla@mydigitalfc.com