Diversified state-run company Andrew Yule will spend Rs 24 crore on two bought-leaf factories it plans to set up in the tea-growing areas of India's northeast, seeking to cushion the business against capacity constraints in the region's gardens.
The two factories, the establishment of which was announced earlier by the Kolkata-based Andrew Yule, will come up in Upper Assam and the Dooars in North Bengal. Investments in the bought-leaf factories will be spread over two years.
Bought-leaf factories buy green leaves from small tea growers, process the leaves and sell them. Separately, the company reported sales of Rs 449.35 crore from operations and other incomes in FY17, up from Rs 389.98 crore in the previous year. It had a net profit of Rs 27.39 crore in FY17 as compared to Rs 8.35 crore in FY16.
The company has received Rs 18.3 crore from the sale of land for a national highway project, and proceeds of the transaction have been reflected in the profit of the company in FY 17.
Meanwhile, the continuing stalemate in the Darjeeling Hills has affected the sales of Andrew Yule's specialty teas. About 2,000 kg of the company's specialty teas -white, Oolong, and handrolled teas -are lying in its Mim tea estate in Darjeeling since the indefinite lockdown that began June 9.
These specialty teas fetch Rs 5,000-15,000 per kg. However, the company's output from Assam and Dooars gardens have fetched about 5 per cent higher prices this year. The company produces around 10.2 million kg of tea annually.