Calcutta, June 11: Andrew Yule plans to focus more on its tea business over other segments such as the engineering and electrical divisions at a time major tea companies across the country are exploring other options to remain profitable.
“Our standalone net sales were the highest at Rs 398.54 crore in 2016-17, of which 55 per cent comprised tea. In 2017-18, we are targeting over Rs 450 crore and 60 per cent of it is expected to come from tea,” Sunil Munshi, chairman and managing director of Andrew Yule, told The Telegraph.
The standalone net profit of the company for the fiscal ended March 2017 rose to Rs 27.38 crore against Rs 8.35 crore in 2015-16.
Tea output stood at 11.5 million kg for the fiscal ended March 2017, up 4.54 per cent from 11 million kg a year ago. However, the yield of the company’s single estate, Mim, in Darjeeling dipped to 1 lakh kg in the financial year under review from 1.12 lakh kg a year before. The tea entity owns eleven gardens across Dooars, Assam and Darjeeling.
“For the last seven to eight years we have done intensive uprooting and replanting of bushes in all our gardens and hence we are expecting the production to go up steadily,” Munshi said.
A PSU under the department of heavy industries, Andrew Yule is setting up a bought leaf factory on 5 acres of land in Sivasagar district of Assam at an investment of around Rs 15 crore. The plant will be operational by early next year.
“We have already got in-principle approval for the project from the board of directors and we are waiting for the clearance of the detailed project report from the ministry of heavy industries,” said Munshi, adding that the factory is expected to manufacture 1.5 million kg per annum of crushed-tear-curl (CTC) and orthodox tea.
Andrew Yule is also trying to get into a partnership with some small tea growers in Assam to source green leaves.
“We will set the quality parameters for the small growers and our own team will check the quality before buying from them,” he said. A similar project will be started in Bengal next year.
However, tea prices have remained stagnant for the past few years. “The price of tea has been hovering around Rs 120 to Rs 190 a kg, despite the rising cost of production which for us is Rs 175 a kg on an average,” Munshi said.
Last year, the company had set up a green leaf factory at Mim that manufactured 5,000kg last fiscal and another at Dooars that manufactured 31,000 kg. “This year we plan to step up the production to 10,000 kg in Darjeeling (Mim) and one lakh kg in Dooars,” Munshi said.