The Hindu Business Line : Beeyu Overseas mulls buying tea factory in Sri Lanka

According to Mr B.P. Singh, Chairman of Beeyu Overseas, a tea company operating mostly in the international market would survive until it is present in several destinations. As the company is already operating in Tamil Nadu, Sri Lanka is the next favoured destination.

"Moreover, Sri Lankan tea is widely accepted all over the world. If we can judiciously mix and blend Sri Lankan tea with Indian tea then we would have a winning combination," Mr Singh told reporters at a press conference.

At present, there are 800 tea factories in Sri Lanka, of which 400 are bought leaf factories and the rest are in the tea estates. All Sri Lankan tea estates are owned by the Government.

Beeyu Overseas is planning to buy a one-million kg factory and the estimated price of it would be around Rs 2 crore. "We hope to complete the deal by the end of March, " he said.

Meanwhile, the company is expanding its present tea production facility from 3,000 tonnes per annum to 6,000 tonnes per annum, in the first phase, and then to 9,000 tonnes per annum in the second phase.

Out of total capacity, 5,000 tonnes would be for CTC tea and the remaining 4,000 tonnes would be orthodox tea.

With the expanded capacity in place, the cost of conversion from green leaf to tea would come down to Rs 8 per kg from the Rs 12 per kg. The cost of the project is Rs 13 crore.

To fund the project, Beeyu Overseas is coming out with its second public issue.

The size of it would be Rs 10 crore.

The company has already filed its draft prospectus with the Securities and Exchanges Board of India. The issue is scheduled to hit the market in February.The remaining Rs 3 crore would be a term loan from State Bank of India.

"The expanded capacity would make Beeyu Overseas the third largest tea producer of South India," he said.

Equity shares of Beeyu Overseas are already listed at the stock exchanges of Kolkata, Kochi and Coimbatore. It is now in the process of getting listed at the Bombay Stock Exchange.

Beeyu Overseas is currently exporting 4,000 tonnes of tea.

It has no presence in the domestic market.

Once the expanded factory is commissioned, the company would start selling in the domestic market too.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page