Andrew Yule and Company Ltd., a central public sector unit in India, is facing financial instability, putting over 8,000 tea garden workers in Assam at risk. The company has suffered a significant loss of nearly Rs 100 crores in the 2023-24 financial year.
Founded by Scottish entrepreneur Andrew Yule in 1863, the company has a rich history in India. However, its current financial situation is causing concern. Assam Chief Secretary Ravi Kota has written to the Union Ministry of Heavy Industries, highlighting the severity of the situation and the potential for labor unrest and law and order issues in the tea gardens.
In a letter to the Union Ministry of Heavy Industries, Assam Chief Secretary Ravi Kota stated that the ongoing financial instability threatens to trigger labor unrest and escalate law and order issues in the tea gardens owned by the company. Delayed payments and statutory dues have already led to frequent demonstrations by workers in these gardens.
The letter attributed the financial instability to significant crop losses due to fungal and caterpillar infestations, rising wage costs, and a depressed tea market in 2023-24. Despite an infusion of Rs. 83 crores over the past two years, the company's credit rating downgrade has restricted further financial support from banks.
The Assam government has sought the union ministry's intervention, given the potential impact on the state. Andrew Yule and Company Ltd. has 10 out of its 15 tea estates in Assam and operates in several other sectors, including engineering and electrical segments.
Khowang, Hoolungooree, Tinkong, Rajgarh, Murphulani and Desam are some of the prime tea estates of the company located in tea-rich eastern Assam.
According to the annual report, during the financial year 2022-23, Andrew Yule earned total revenue of Rs. 405.79 crore as against Rs. 470.98 crore in 2021-22 i.e. a decrease of 16.06 percent.
Income from operations of Tea division has decreased to Rs.213.72 crore during the financial year 2022-23 from Rs.231.25 crore during the previous financial year thereby decreased by Rs.17.53 crore due to decrease in production caused by inclement weather condition and corresponding decrease in sale.
Andrew Yule launched the company as a managing agency at a time when railways, telegraph, and postal services made a beginning in India. By 1875, the company established a substantial business interest in jute, tea, cotton, coal, and insurance.
The company celebrated its centenary year in 1963. However, the post-1963 era had been a period of dramatic change both in the structural fabric and fortune of the company. The managing agency system was abolished in 1969, coal and insurance were nationalized, jute business was sold in the early 70s, and the group shrunk considerably. There was great deal of uncertainty about the future of the Company. It was in this background that the government of India decided to acquire 49 per cent of foreign shareholdings in the company in the year 1974 to provide stability to the organization. The government subsequently acquired another 2 per cent from the market and thus, Andrew Yule & Co. Ltd., became a public sector enterprise in 1979.
The company's financial struggles are part of a larger trend in India's tea market, which is facing declining production, falling prices, and decreased exports. Many leading tea companies are running huge losses, and some have already sold off their gardens.
Tea estates in Assam had witnessed labor unrest earlier. Sometimes these incidents turn violent with workers attacking tea executives mainly due to not receiving regular salaries. Violence scenes are witnessed mostly prior to the Durga puja celebrations, when tea garden authorities fail to pay the yearly bonus. Durga puja, which is celebrated in the early part of October, happens to be the main festival for tea workers in Assam.
“There will be widespread violence if the laborers do not receive the yearly bonus before the puja celebrations,” a leader of the Assam Tea Tribe Students’ Association (ATTSA) told World tea news. ATTSA is an influential organization of the tea community.
An expert in the tea industry told World Tea News that these developments would hardly have any impact in the market. “The government would not take a chance and would pump in funds to stabilize the Andrew Yule gardens… After all, tea workers are a big vote bank and no political party would take the risk,” he said, while requesting anonymity.
He said that like Andrew Yule, Assam government owned Assam Tea Corporation Limited gardens are running through similar situations.
“Every year, the Assam government pumps in money to pay the yearly bonus to the ATCL garden workers just before the durga puja celebrations,” he said.
ATCL has 15 gardens and all these gardens are running huge losses over the years allegedly due to huge corruption and lack of interest at the top level. “Similar is the case with Andrew Yule owned tea gardens,” he said.
In a related development, The Assam Tea Employees’ Provident Fund Organization (TEPFO) has proposed the sale of tea gardens operated by Andrew Yule & Co. Ltd in the wake of severe financial difficulties faced by the central public sector undertaking.
Vice Chairman of TEPFO, Terash Gowala, while speaking to newsmen a couple of days back highlighted the financial strain on the Andrew Yule tea gardens.
“The gardens are struggling financially, and laborers are not receiving their wages on time. Rumors are also rife about selling these gardens to private entities,” Gowala said.
He further noted that the TEPFO are open to the idea of selling the gardens to private parties, provided it leads to their better management and functioning.
“If the government cannot manage these gardens effectively, it would be better to sell them to someone who values Assam and its tea industry,” Gowala added.
To book your sponsorship or exhibit space at World Tea Expo, or to inquire about advertising and sponsorship opportunities at World Tea News, contact:
Ellainy Karaboitis-Christopoulos, Business Development Manager, Questex
Phone: +1-212-895-8493; Email: [email protected]
Looking for professional tea education, certifications, and more? Visit World Tea Academy and register for courses today!
Also, be sure to stay connected with World Tea Expo on social media for details and insights about the event. Follow us on X, Facebook, Instagram and LinkedIn.