Agri Business

Covid-19 crisis: Bought leaf tea factories seek time to pay dues

PS Sundar Coonoor | Updated on March 25, 2020 Published on March 25, 2020

Teas worth ₹30 crore stuck at warehouses and factories waiting to be transported

In the wake of their production coming to a halt in the private small-scale tea factories, popularly called bought leaf factories, manufacturers in The Nilgiris have appealed to the State and Central Governments for time extension to pay their statutory dues.

“Respecting the need for our workers to stay at home to fight against Covid-19, we have stopped production,” L Vairavan, Secretary, The Nilgiri Bought Leaf Tea Manufacturers’ Association, told BusinessLine.

“Corporate and co-operative factories have also stopped manufacture. Collectively, this means stoppage of manufacturing about 10 lakh kg of tea per week,” he disclosed.

In any case, auctioning of the manufactured teas has come to a standstill. Factories complain that they have not received the payment for the teas already sold at the auctions.

“Following the restrictions imposed to fight against Covid-19 pandemic, nearly 25 lakh kg of teas are waiting for transportation at the warehouses and even the factories. This means a blockage of about ₹30 crore worth of teas so far,” Vairavan said.

“So, to ease the strain, we have appealed to the authorities to allow the movement of these already manufactured teas, subject, of course, to the safety norms of Covid-19 action,” he said.

“This becomes important as the shelf life of the manufactured teas is only about three months. Besides, with tea known to have anti-oxidant properties, it is good for the consumers at this testing time to boost their immunity but to make the tea available to them, transportation is necessary,” he noted.

“We have also appealed for extending the time by two months for payment of our statutory dues for electricity, payment to the growers and crediting of provident fund share so that we can clear them once we get the sums due to us,” he said.

Published on March 25, 2020

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