The Hindu Business Line : Beeyu Overseas plans to buy tea factory in Lanka

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

"Moreover, Sri Lankan tea is 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 said at a press conference.

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

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

Meanwhile, the company is expanding its present production capacity from 3,000 tonnes to 6,000 tonnes a year, in the first phase, and then to 9,000 tonnes a year, in the second phase.

Of the total capacity, 5,000 tonnes would be for CTC and the rest (4,000 tonnes) would be orthodox.

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

To fund this project, Beeyu Overseas is coming out with a Rs 10-crore public issue, its second, probably this month. The company has already filed its draft prospectus with the Securities and Exchanges Board of India.

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 in South India," he said.

Equity shares of Beeyu Overseas are already listed at the stock exchanges of Kolkata, Cochin 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.

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