Diversified PSU Andrew Yule would set up two bought leaf factories in Assam and north Bengal to raise production, an official of the company said.
"The company board has decided to set up two bought leaf factories in Assam and North Bengal", outgoing chairman of Andrew Yule Sunil Munshi told PTI.
Munshi said that earlier, "We used to buy bought leaf from others. But due to intense uprooting and replantation in the gardens, production of tea has increased substantially and touched an all-time high."
So there was no surplus capacity in the gardens and hence the decision to set up the factories, he said.
The first factory would come up at Assam's Sibsagar district followed by north Bengal, Munshi, instrumental in reviving the tea business of the PSU, said.
Both the factories would have a production capacity of one million kilos per annum, he said.
New CMD of Andrew Yule Debasis Jana said, since the company is run by the government, there are many restrictions on operations.
"It is the easiest way to raise production without acquiring gardens. Straightaway, production would increase by two million kilos which would add both to the topline and bottom line.
The present production capacity is 12 million kilos.
He company had already got the land in Assam and tendering process was underway, Jana said.
The Assam factory would be completed by the end of the current financial year, following which work on the Bengal unit would start.
The tea division of Andrew Yule contributed to 55 per cent of the total company turnover and stood at Rs 207 crore.
The target is to take it to Rs 225 crore next fiscal, he said.
Jana said, a production of one million kilos would add Rs 15 crore to Rs 20 crore to the top line.
The other two divisions were engineering and electrical.
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