Beeyu Overseas plans to up capacity

The Kolkata-based Rs 37 crore Beeyu Overseas Ltd (BOL), one of the leading tea exporters in India, is seeking to triple its tea manufacturing capacity from 3,000 tonne per annum to over 9,000 tonne per annum by 2006. For this, the company has lined up an investment of Rs 15 crore.

The company plans to tap the capital market with its second public issue of 71,40,000 equity shares of Rs 10 each at a premium of Rs 4.

The capital mobilisation form the public issue is expected to be around Rs 10 crore, while the company has already secured a term loan of Rs 3 crore from the State Bank of India (SBI). The balance amount of Rs 2 crore would be funded from the internal accruals of the company.

The issue will open for subscription on May 26, 2005 and will close on June 3, 2005. The equity shares of the company are proposed to be listed on the stock exchanges of Mumbai, Kolkata, Cochin, Coimbatore and inter-connected stock exchanges.

"The present offer of equity shares is being made to fund the expansion of our CTC and Orthodox tea manufacturing capacity from 3 million kgs per annum to 9 million kgs per annum by 2006. The expansion is being done to meet the growing demand for tea in the international and domestic markets," B P Singh, chairman and managing director, Beeyu Overseas Ltd, told Business Standard.

The company has three factories at Ooty and Tamil Nadu. The fist phase of the company's expansion envisages setting up of one CTC and one Orthodox tea factory, which will become operational in September 2005. This expansion will double Beeyu's total manufacturing capacity from 3000 tonne a year to 6,000 tonne a year.

"The Ooty factory, after the expansion, will be the first of its kind in the country to manufacture 9,000 tonne of tea under one shed. Also, in view of economies of scale, the cost of conversion from green leaf to black leaf will come down to Rs 8 per kg as compared to standard Rs 12 per kg," said Singh.

The second phase of expansion programme, involving setting of another CTC and orthodox factory, will be commissioned in September 2006.

The company, established in 1993, has reported a turnover of Rs 37 crore in the last financial year and plans to close the current financial year with a turnover exceeding Rs 54 crore.