Andrew Yule & Company Ltd is betting on value addition in its tea business. The diversified PSU is targeting to raise the share of packet tea in the business to over 25 per cent in 2-3 years from 5 per cent.

The company, which produces 12 million kg annually, expects to clock a turnover of Rs 200 crore from its tea division by the end of this fiscal against Rs 183 crore last year.

It has unveiled its online B2C sales portal to cash in on growing e-commerce prospects. As part of its sales strategy, the company is mulling a pan-India launch in select institutional and retail chains. It is already an exclusive supplier to the Tribal Cooperative Marketing Development Federation of India and the Central Cottage Industries Corporation of India.

"The tea industry is at the crossroads. Tea, coffee and cocoa have not done well as far as price is concerned. The operating cost for the industry is going up. One of the way out for an Indian manufacturer of tea is to get into value addition. Our target is to take the share of packet tea to over 25 per cent in 2-3 years from about 5 per cent now," managing director Kallol Datta said.

At an industry level, packets constitute 30 per cent of the domestic consumption of 1,000 million kg. Last year, production stood at 1,200 million kg, while exports were at around 200 million kg. The domestic packet tea market is valued at around Rs 9,500 crore.

Buoyed by the increased demand for green tea, Andrew Yule is planning to start its production in Darjeeling, Assam and the Dooars. It has 15 gardens - 10 in Assam and five in Bengal.

Andrew Yule is also tapping new export markets and has exported value-added tea to the US and eastern Europe.

Datta said the Assam government had shown interest in handing over 15 gardens to the company under the Assam Tea Corporation. "We had initial discussions with them. There are issues in those gardens. We told them we could go phase-wise and begin with three. In Bengal, we gave a proposal to take over two gardens-Pandam and Rangaroon-initially. The Bengal government has now decided to auction five gardens. We are contemplating whether to bid and take part in that auction," he said.

Source:telegraphindia.com