Era ends as Finlay's tea leaves Glasgow

Managing director Rupert Hogg and corporate affairs director Duncan Gilmour are among those confirmed to make the move, and will be joining a newly hired finance director already based in London.

Other members of the 15 staff at Finlay's current headquarters in West George Street are said to be considering whether to transfer or take redundancy packages.

The move is planned for the third quarter of this year. Although details have yet to be confirmed, Gilmour said it was most likely the operation would relocate to Swire House in Buckingham Gate, the UK headquarters of Finlay's parent company, privately owned John Swire & Sons.

Finlay became a wholly owned subsidiary of John Swire in October 2000 when the multinational conglomerate bought the 70% of the business that it did not already own, valuing Finlay at 101m. As a result, shares in Finlay were de-listed after 76 years of trading on the London exchange.

In the years prior to that agreed takeover, operations at Finlay were significantly restructured as the business withdrew from ventures outside its core areas of growing, producing and trading tea. Its last operational business north of the Border - a financial services outfit - was disposed of in 1996.

That left Finlay's remaining Scottish staff of approximately 30 housed in premises too large for the streamlined operation. Following the acquisition by Swire, that property on West Nile Street was sold, with Finlay moving to smaller accommodation in West George Street in 2001.

A spokesman for Finlay said the decision to transfer to London was made for the same pragmatic reasons that led to the move out of West Nile Street. "There isn't anything sinister about this," he said. "It is simply a matter of how the company has evolved over the past 10 years."

As well as removing the costs of maintaining a separate Scottish office, the spokesman said moving to London would also make it easier and cheaper to hold meetings with heads of packaging and other operations located down south.

Founded in Glasgow in 1750, James Finlay has plantations in Kenya, Uganda and Sri Lanka producing 55 million kilos of tea each year. It sold off its plantations in Bangladesh last year, cutting its worldwide workforce from 60,000 to about 45,000.

The eponymous founder set up the firm as a cotton trading venture and the company purchased its first textile mill in 1798 under the leadership of his son, Kirkman Finlay. That mill at Ballindalloch was soon joined by additional mills at Catrine in Ayrshire in 1801 and Deanston in 1808.

In terms of Scottish employment, this period would mark the zenith of Finlay's activities north of the Border, with thousands employed in the labour-intensive mills. Although the works at Ballindalloch were sold in 1844, textile work at Deanston continued until its closure in the mid-1960s. Catrine was shut in the early 1970s.

The company's trading activities expanded, as a number of agency offices were established to act on behalf of manufacturers looking to move their goods between the UK and overseas. One of these destinations was India, where Finlay got involved in the country's burgeoning tea industry towards the end of the 19th century.

By the 1970s, Finlay effectively controlled about 10 different tea operations that had sold stakes in their businesses to Finlay as part of their trading agreements. The Scottish company decided to rationalise these operations by purchasing the plantations outright, making it the largest tea-owning company in the world at that time.

With the mills closed and the business firmly established in the tea trade, Finlay decided to diversify into merchant banking in an effort to smooth out some of the volatility in its main line of business. This saw as many as 60 additional jobs created in Glasgow by the early 1990s, but the venture encountered troubles and was disposed of a few years later.

This reorganisation was led by executive chairman Richard Muir, the grandson of Sir John Muir, who took sole ownership of Finlay late in the 19th century. Although Finlay became a publicly listed company in 1924, the family connection continued until Richard Muir ended his 41 years in the business through retirement a year after the acquisition by Swire.

John Swire & Sons is the parent company of Swire Group, which owns shipping, property, agricultural and other interests across five continents. It also holds a 31% stake in Hong Kong-quoted Swire Pacific, owner of Cathay Pacific Airways. In 2005, John Swire & Sons reported a profit attributable to shareholders of 244m on turnover just shy of 2.7bn.

During that same year, James Finlay saw profits drop by nearly a third to 13m amid a decline in global tea prices.

The spokesman for Finlay declined to comment on the company's more recent trading progress. Accounts for 2006 are due to be lodged later this year.