Indian investors buying Ilam tea factories

ILAM, March 24:

Indian investors have taken over management of 10 of 25 big tea factories in Ilam district.

Investors from the southern neighbor cashed in on the Nepali industrialists´ incapability to run the factories. They have bought seven factories and are looking after marketing of three others.

Nepali industrialists say they were compelled to hand over the ownership of the factories to Indian investors as they could not run the factories on loss.

Balaji Agro, Jayshree Tea and Accord International, among other Indian companies, took over full ownership of tea factories from this season. As the factories go into the hand of Indian investors, farmers and laborers, who are dependent on the factories for their livelihood, are now in the state of confusion.

Somesh Agrawal from Kolkata has taken ownership of Sakhejung based Sakhira Tea, Aitabaare based Ilam Chiyabari Tea, Fikkal based Small Tea, Panchakanya based Siddhibinayak Tea, and Barbote based Mechi Valley Tea.

“It is unfortunate that tea factories are going into the hands of foreigners. This is happening because we are not getting any support from the government,” Uday Chapagai, proprietor of Sundarpani-based Gorkha Tea State, said. “The trend will make long-term impact on Nepali farmers, laborers and traders.”

Indian investors are attracted toward tea gardens and factories of Ilam as Nepali tea is giving a tough fight to internationally acclaimed ´Darjeeling Tea´ in foreign markets.
Govinda Dahal, chairman of National Tea Cooperatives Association, pointed out the need for the government´s positive intervention to stop the trend of tea factories going into the hands of Indian investors. “If the government failed to study the gravity of the situation in time, all tea gardens and factories in the district will fall into the hands of foreign investors,´ added Dahal.

Nepali investors started tea factories one after another when production of green leaves increased significantly in the past. Later, the factories started incurring loss as they could not get sufficient green leaves.

Ilam Tea Producers of Tinghare suffered loss of around Rs 25 million last year.

“When we suffered loss last year, owners of many factories feared that they might have to face similar consequences. That is why they started selling factories to Indian investors,” Devendra Sangraula, manager of Ilam Tea Producers, said. “The government should have bailed loss-making factories out of crisis.”

Chapagain said Indian traders, who used to buy Nepali tea in the past, are now buying Nepali tea factories because they know the quality of Nepali tea.

   

Source: Republica