Bought Leaf Factories Dibrugarh
Bought Leaf Factories Dibrugarh
Bought Leaf Factories Dibrugarh
Abstract
Assam is the most noteworthy tea creating state in India and involved special spot by delivering in excess
of half of all out yearly public creation. In the year 2015-16, Assam created 653 Million kg of tea which is
53 percent of public creation in that year. All out tea ranch zone in Assam is about 3.22 lakh hectares
which is the greater part of the nation's all out zone under tea. More than 6.86 lakhs individuals in the
Assam, which is around 50% of the complete normal every day pursued worker in the India, are occupied
with tea industry of the state. This industry expanded biggest help by producing most elevated business
openings in the province of Assam. Tea Industry additionally helps in giving roundabout work in various
areas like street development, manures, bug sprays, transportation, , paper, card board, aluminum foil,
tinplate, metal fittings, pesticides, iron, stockrooms, assembling of compressed wood, tea chest steel, coal,
and so forth The development pace of creation of tea in Assam in late past isn't up to the desire. Assam
Tea which has name and acclaim in the unfamiliar market is likewise going somewhere near quality.
Bought-leaf factories are units that buy these tea leaves and convert them into the processed tea. An
endeavor has been made in this paper to locate the current situation of tea creation and operation of
BLFs in Assam in setting to India. This paper highlights the operation of Bought leaf Factories in
Dibrugarh District.
INTRODUCTION
Bought-leaf factories are units that buy these tea leaves and convert them into the processed tea.
Generally, 6000 tea bushes can be planted in an acre of plot. These 6,000 bushes can produce 10,000 kg
of green leaf. The cost of production varies between Rs 8.50 - Rs 10.50 per kg.
BLFs are an integral part of small tea cultivation. As the name goes, these are factories that purchase
green leaf from external sources for manufacture of tea. According to the Tea Board, BLFs are tea
factories, which purchase 75 percent of the green leaf requirements from sources other than their own.
Apart from purchasing green leaves from the growers, BLFs were also reported to have provided
financial assistance in the form of advance payment in the beginning of the season to small tea growers.
The existence of BLFs is a special feature of the tea growing states of South-India particularly Tamilnadu
and Kerala. These factories in the nature of partnership or public limited firm came into existence after
1963-64 in South India (as per Tea Board)
In Dibrugarh district, the bought leaf factories purchase green leaves either from the small gardens
directly or from their appointed local agents. There are at present 53 bought leaf factories in Dibrugarh
district according to the record of the AASTGA of Dibrugarh district. According to General Secretary of
AASTGA of Dibrugarh district, small tea growers of Dibrugarh district is not getting better price of
green leaf from the bought leaf factories and they had planned to establish co-operative tea processing
factories in different parts of the Assam. The Secretary felt that this would help the small tea growers to
get better price of green leaves. The small tea growers have already established co-operative tea
processing factories in the name of “Lahdoi Tea Manufacturing Company (Pvt). Ltd” at Borhat of
2721
ISSN: 2005-4289 IJDRBC
Copyrightⓒ2020 SERSC
International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 2721–2733
Sibsagar district with 47 members of small tea growers. But till now this factory is not started for
production of tea.
The state industry‟s department has done an extensive survey on this and suggested certain criteria for
setting up the BLTFs. There is now decision to categorize the BLTFs into two groups – one comprising
those who do not have their own plantations and the other comprising the ones having their own
plantations of at least 100 acres of land. On an average, 500,000 kg of green tea leaves
is produced on 100 acres of plantations in a year. Several BLFs do not have efficient technicians. This
has led to the flooding of inferior quality tea in the domestic market. About 361 million kilograms of tea
was produced in bought leaf factories in the northern parts of India in fiscal year 2017. However, the
southern region of the country produced about 77 million kilograms of tea.
14 million kg of tea per annum is the present capacity figure for MJB Group, making us one of the
major players in the tea beverage industry. The factories are Brojendra Plantation Pvt. Ltd, Suman
Mfg. Works Ltd, Mars Tea (India) Pvt. Ltd, Sarodamoni Tea Company Pvt. Ltd, Sanyasihat Tea
Processing Pvt. Ltd. and New Leaf Tea Plantation Pvt. Ltd. 100% fully automated, simultaneously
operating and supervised by experienced industry personnel, creating the most premium teas in our brand
portfolio.
The major client‟s list span a mile including Tata Tea, Hindustan Unilever Ltd, Wagh Bakri Tea, Mohini
Tea, Jayashree Tea, and various other national players.
2722
ISSN: 2005-4289 IJDRBC
Copyrightⓒ2020 SERSC
International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 2721–2733
SUMAN MFG. WORKS LTD. -One of the largest Bought tea leaf factories in Dist. Jalpaiguri, W.B.
BROJENDRA PLANTATION PVT.LTD. - 4 line CTC Bought Leaf Tea Unit in Dist. Darjeeling,
W.B.
MARS TEA (INDIA) PVT.LTD. - 6-line CTC tea factory located in Bidhan Nagar, Dist. Darjeeling,
and W.B.
SANYASIHAT TEA PROCESSING PVT.LTD. - 5 Line CTC setup located in Dist. Jalpaiguri, W.B.
SARODAMONI TEA COMPANY PVT.LTD. -5 line CTC tea factory located in Dist. Jalpaiguri, W.B.
NEW LEAF TEA PLANTATION PVT.LTD. - 5 Line CTC Bought Tea Leaf unit located in Dist. Uttar
Dinajpur, W.B.
MB GROUP
\
Aryan Tea Plantation Pvt. Ltd.
Largest Bought Tea factory in Jalpaiguri, West Bengal
Swarnalaxmi Mercantile Pvt. Ltd.
2723
ISSN: 2005-4289 IJDRBC
Copyrightⓒ2020 SERSC
International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 2721–2733
OBJECTIVES OF STUDY
The scope of the study is to know about the Operation of BLFs under Dibrugarh district. Dibrugarh
district occupies an area of 3,381 square kilometers (1,305 sq mi). It is bounded by Dhemaji district on
the north, Tinsukia district on the east, Tirap district of Arunachal Pradesh on the south-east and Sibsagar
district on the north and south-west. The area stretches from the north bank of the Brahmaputra, which
flows for a length of 95 km through the northern margin of the district, to the Patkai foothills on the
south. Tea and oil are the major revenue earners for the district. Beside these many rice and oilseed mills
2724
ISSN: 2005-4289 IJDRBC
Copyrightⓒ2020 SERSC
International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 2721–2733
exist. Also there are some coal mining and petroleum production industries. The majority of the
population are occupied in farming of rice, sugar-cane, pulses, and fish farming.
Dibrugarh has the world's largest area covered by tea gardens. The entire district is surrounded
by tea plantations and has tea factories. Many tea gardens are more than 100 years old.
The Administrative System is divided into:
1. Village (1361)
2. Block (7)
3. Gaon Panchayats (93)
4. Zilla Parishad (1)
METHODOLOGY
In order to achieve the objectives of the study both primary data are collected from different Bought
Leaf Factories of Dibrugarh district through questionnaire. Apart from the questionnaire, personal direct
interview of the respondents were also taken into account during the study. Secondary data are collected
from different web sites, reference books, Annual report and news bulletin.
The Bought Leaf Factories (BLFs) have a major role in controlling the mechanism of price determination
and quality of tea. BLFs do not have their own tea plantations and depend on small farmers for green
leaves to produce made tea. BLFs have direct linkage to the wholesalers, up country buyers and foreign
market. Several BLFs have mushroomed in West Bengal and in South India in recent years.. Market
analysts say that the poor quality tea produced by these players not only affects domestic price levels, but
also damages the quality perception of the Indian tea in export markets. Today 40% of the total tea
produces by the BLFs in Assam. There has been a steady growth in the numbers of private tea
manufacturing factories in India in the post 90‟s.
Table-1 Growth of BLFs in India
Region 2012 2013 2014 2015
No. Production No. Production No. Production No. Production
(in mn.kg) (in mn.kg) (in mn.kg) (in mn.kg)
Assam 119 43.0 139 53.29 151 65.32 162 77.6
WB 40 24.6 56 33.44 69 37.74 79 49.59
Others 4 0.5 4 1.67 8 2.78 9 3.04
North 163 67.5 199 88.4 228 105.8 250 130.23
India
2725
ISSN: 2005-4289 IJDRBC
Copyrightⓒ2020 SERSC
International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 2721–2733
Analysis: Table 1 indicates that there were 331 BLFs in India registered under the Tea Board in 2012 out
of which163 numbers of BLFs in North India. The estimated productions of the BLFs in India and North
India were 135.2 million kgs and 67.5million kgs of tea respectively in 2012. Table 1 also indicates that a
total of 168 number of BLFs in south India producing 67.6 million kgs of tea while 119 numbers of BLFs
in Assam producing 43 million kgs of tea in 2012 .In the year 2013, a total of 371 numbers of BLFs in
India producing157 million kgs of tea out of which199 numbers of BLFs in North India producing 88.4
million kgs of tea and 172 number of BLFs insouth India producing 68.6 million kgs of tea while 139
numbers of BLFs in Assam producing 53.29 million kgs of tea. The growth percentage in India, North
India and Assam were 12.08 p.c , 22.09 p.c and 16.80 p.c respectively in 2013 in comparison of 2012.
In 2013, the growth percentage (16.80%) of Assam was quite high than that of overall growth percentage
(12.08%) of India but growth percentage in Assam is below by 5.29% in comparison of North India. It
is found that BLFs in Assam, West Bengal and Tamil Nadu were 162, 79 and 185 BLFs registered under
the Tea Board in 2015 The estimated productions of the BLFs in Assam, West Bengal and Tamil Nadu
were 77.6 million kgs , 49.59million kgs and 80.72 million kgs of tea respectively in 2015. The overall
growth percentage in India, North India and Assam were 37.46 p.c , 53.37 p.c and 36.13 p.c respectively
in 2015 in comparison of 2012. It is a pointer to the fact that for the survival of small gardens the
formation of co-operative tea factories would be the best option for small tea growers of Dibrugarh
district to process their own green leaves.
Table -2 shows the summary of Bought Leaf Factory in Assam as district wise along with their
production as on 31.12.2015
DISTRIBUTION OF BOUGHT-LEAF FACTORIES IN ASSAM:
Districts No. of BLF Production capacity Production
(in %) (in M.kg)
Dibrugarh 53 46.90 44.30
Golaghat 23 5.80 5.76
Jorhat 16 4.40 4.16
Karbi Anglong 5 1.00 0.92
Nagaon 1 0.50 0.53
Sivasagar 12 3.90 4.06
Sonitpur 4 1.10 1.04
Tinsukia 82 35.90 34.29
Udalguri 1 0.50 0.49
Total 197 100 94.45
Source: Tea statistics 2015
2726
ISSN: 2005-4289 IJDRBC
Copyrightⓒ2020 SERSC
International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 2721–2733
Analysis: Table 2 indicates that there were 197 BLFs in Assam registered under the Tea Board as on
31.12.2015 and these 197 BLTFs manufactured 94.45 million kg of tea. To make 94.45 million kg of
made tea the BLTFs altogether purchased 425.03 million kg of green leaves during the year; and to
make a kg of made tea 4.5 kg of green tea leaves were used by the BLTFs. A look at the summary
distribution of BLTFs reveals that concentration is primarily in Tinsukia district (82 factories with
35.90 % production capacity of total the BLTFs in the state), Dibrugarh (53 factories with 46.9%
production capacity), Golaghat (23 factories with 5.80 % production capacity) and followed by Jorhat
and Sibasagar districts.
Table -3 shows the summery of Bought Leaf Factory in Dibrugarh District as Block wise along with
their production.
Summary of Bought Leaf Factories in Dibrugarh District
as on 31.12.2015
Dist. Name No. of Bought Total Purchase of Sale through
Leaf Factories production of green leaves in Auction (CTC)
as on made Tea as (M. kgs) in 2015 Rs
31.12.2015 on 31.12.2015 (Average price
( M.kgs) /kgs)
Barbourah 7 5.91 22.68 114.31
Tinkhong 6 5.71 17.14 120-125
Tenghkhat 7 5.95 20.37 132.55
Lahowal 19 15.32 70.76 128.026
Panitola 3 2.10 9.70 120-125
Khowang 6 5.51 14.83 125.65
Joypur 5 4.80 16.17 118.71
Total 53 44.30 171.64 -
Source: primary source
Chart
2727
ISSN: 2005-4289 IJDRBC
Copyrightⓒ2020 SERSC
International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 2721–2733
Barboruah
Tinkhong
lahowal
Panitola
Khowang
Joypur
Tenghkhat
Barboruah
Tinkhong
Tenghkhat
Lahoal
Panitola
Khowang
Joypur
2728
ISSN: 2005-4289 IJDRBC
Copyrightⓒ2020 SERSC
International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 2721–2733
Analysis: Table 3 indicates that there were 53 BLFs in Dibrugarh District registered under the Tea Board
as on 31.12.2015 and these 53 BLTFs manufactured and Purchase of green leaves were 44.30 million kgs
production of tea and171.64 million kg of green leaves respectively. A look at the summary distribution
of BLTFs of Dibrugarh district also reveals that concentration is primarily in Lahowal block (19 bought
leaf factories with 15.32 % M.kgs production of tea ), Tenghkhat block (7 factories with 5.95 M.kgs
production of tea ), Barbourah block (7 factories with 5.91 % M.kgs production of tea and followed by
Tinkhong and Khowang blocks.
MAJOR STEPS TAKEN BY TEA BOARD TO IMPROVE THE QUALITY OF TEA PRODUCED
BY BOUGHT LEAF FACTORIES
To enhance the quality of made tea proper product by way of giving incentives for Modernization of
tea manufacturing units, warehouses, units dealing with value addition of tea such as blending, packing,
tea bagging, flavor tea , setting up of specialty tea units/ Orthodox or Green Tea manufacturing units to
acquire quality certifications, Organic tea production and production of Orthodox/Green tea. There are 6
sub- components under this scheme which are stated below
1. Factory Modernization by replacement of the old, worn out tea machineries large scale
modernization initiatives during XII plan period
2. Value addition by way of creating additional infrastructure for cleaning, Blending, colour sorting,
packaging etc.
3. Setting up of new factories for production of green tea, orthodox tea and specialty teas etc. (product
diversification)
4. Quality assurance certification for HACCP, certification for ISO 22000 and other food safety
standard certifications
5. Warehousing for proper storage of tea
6. Incentive for orthodox and green tea production
2729
ISSN: 2005-4289 IJDRBC
Copyrightⓒ2020 SERSC
International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 2721–2733
b) Leaf Agent: The leaf agent often mixes different grades of green leaves before selling it to the
BLF. The process of mixing different grades of green leaves also reduces the price of the leaf. As a
result, BLFs get low quality leaf to produce made tea.
c) BLFs:. BLFs produce various kinds of tea of different grades as similar as estate factory. They sell
tea at various levels at auctions, through direct sales and local wholesalers/semi-wholesalers and
retailers which is based on quality and price and market demand.
It is reported that most of the BLFs resort to adulteration while producing made tea. Local
communities point out that some BLFs use a variety of potato to adulterate made tea. The waste left in
the tea production at the big estate factories are mostly taken to the BLFs. The use of such inferior
products to increase the volume of tea directly affects the quality and increases the supply of made tea
within a short period in a particular locality. It also affects the longevity of made tea. It is widely reported
that adulterated tea in various ways increase in supply of made tea in regional market. It has also been
argued that tea prices decline due to these adulterations. In some cases, it is reported that, stringent action
was taken against some of the factories which produce „adulterated and low quality tea‟, but it still
demands constant monitoring and action.
2730
ISSN: 2005-4289 IJDRBC
Copyrightⓒ2020 SERSC
International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 2721–2733
While the auction prices continued to fall, this fall was not reflected in the retail prices of tea, which
ruled high as depicted in the box. While the producer and the consumer were affected, this was not the
case with the buyer. There is a wide difference between the auction price and the retail price when the
products reach the consumers. There is a general consensus that the huge difference between the auction
price and retail price will go to brokers, traders and other middlemen at the cost of the producers. Yet, the
„middlemen‟ have a major role in the tea industry‟s value chain. It is difficult for the producers to sell
their products to customers, who are scattered all over the India.
However, the real profits are in the retail „packed tea‟ market. For example, in India the average tea
auction prices are less than Rs. 100/- per kg but in retail, the tea is sold for Rs.250/- per kg. While the
prices for tea at auctions is falling around the world, market share and profit of tea companies is
increasing in the recent period. Most of the major companies pack and sell their own tea without bringing
it to the tea auctions and they are also the biggest buyers of the tea from the auctions.
E-AUCTION SYSTEM
The manual auction system had certain limitations like limited auction Hall Space, shorter time for „Fair
Price Discovery‟ due to Serial Bidding, no record of Bid History except the winning bid and the name of
winning bidder, not possible to analyze the nature of competition for different Types/Category/Grade of
tea separately for taking Policy Decision, reduction in the Quality of bidding due to Serial Bidding and
visibility of other buyers‟ identification & their extent of participation during bidding time for any Lot
etc. Therefore the need of converting the manual system to electronic mode was felt in order to remove
the existing outcry in the system. A. F Ferguson had also recommended for such move to electronic mode
in the study report submitted in the year 2002. Electronic auction for tea, for the first time, was finally
introduced only in India in the year 2009. Sale of teas through auctions are continued to be held through
manual “outcry” system in other tea producing countries.
The followings are the benefits of the E-Auction system over the manual one:-
8. Many of buyers are registered in more than one auction centers in India.
9. 9. It was found that the 40% Bought Leaf Factories owners are using advertisement facilities to
increase the sale of the product.
SUGGESTIONS:
The following are some of the suggestion on the basis of the findings of the study:
1. To stress on the fact that Bought Leaf Factories are important players in the states industrial scenario.
2. Restrict the impacts of adulteration in BLFs.
3. To make schemes keeping the interest of the Bought Leaf Factories.
4. Auction System needs to be heavily reform.
5. Rules, Regulation should be fair to both Small Tea Growers and Bought Leaf Factories, and should not
be favoring one of them.
6. Improve the supply of power in Bought Leaf Factories.
CONCLUSION
Bought Leaf factory serve as a major role in price mechanism of the quality of tea leaves.
It must be said that Bought Leaf Factories though facing serious problem of power supply, marketing, and
quality of tea, yet they are helping the small tea growers by buying their green leaf, Government of
Assam through solving unemployment problem and cess collection @10 paise per kg from small tea
growers for the state of Assam. The cess is collected through the BLTFs and estate factories, who deduct
the amount from supplies made by the small growers. Though again the adulteration of made tea is rising
in Bought Leaf Factories in recent years yet, it has a bright future prospect.
REFERENCES
1. Isaksson, A (2009) „Energy Infrastructure and Industrial Development‟, Research and Statistics
Branch, Working Paper No. 12/2009, UNIDO.
2. Fernandes, A M; Pakes, A (2008) „Factor Utilization in Indian Manufacturing: A Look at the
World Bank Investment Climate Surveys Data‟, NBER Working Paper, No. 14178, Cambridge,
MA: NBER.
3. Adenikinju, A (2005) „Analysis of the Cost of Infrastructure Failures in a Developing Economy:
The Case of the Electricity Sector in Nigeria‟, AERC Research Paper 148, Nairobi, AERC.
4. A F Ferguson & Co., 2002. Draft Report on Post-Auction Pricing: Structure and Supply chain for
tea, Tea Board of India, Kolkata, August 2002
5. A F Ferguson & Co., 2002. Report on Primary Marketing of Tea in India, Tea Board, GoI.
March 2002
6. Alter Eco France, March 2000, quoted from Barbara Flies et. al, (2007)
7. Annual Report (2005), J Thomas & Co. Pvt. Ltd,
8. Saji M, 2005.Indian Tea Industry: Market and Value Chain, Centre for Education and
9. Communication, New Delhi.
10. John Humphrey and Hubert Schmitz (2000) 'Governance and Upgrading : Linking
Industrial Cluster and Global Value Chain Research', Working Paper No. 120,
Institute Of Development Studies (IDS), University of Sussex, UK.
Websites:
2732
ISSN: 2005-4289 IJDRBC
Copyrightⓒ2020 SERSC
International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 2721–2733
1. http://en.wikipedia.org/wiki/History_of_tea-in_India
2. https://www.academia.edu/10011013/Indian_Tea_Research
3. http://www.teaboard.gov.in/pdf/bulletin/Estimated_production_for_October_2014.date:18/03/16
4. http://www.teaboard.gov.in/pdf/bulletin/Revised_break_up_production_region_wise_2015_16_A
pr_Oct.date:18/03/16
5. http://www.teaboard.gov.in/pdf/start/Estimated_Consumption.pdf
6. http://www.teaboard.gov.in/pdf/bulletin/Consolidated_AR_2014_15.PDFdate:18/03/16
7. http://www.teaboard.gov.in/pdf/Global_Tea.pdf
8. http://www.teaboard.gov.in/pdf/start/Area.pdf
9. http://cds.edu/wp-content/uplods/2013/08/NRPPD29.pdf
10. http://mjbgroup.co.in/bought-leaf-tea
11. https://emarketplace.teaboard.gov.in/jhtauc/security/getLogin
12. Modalities –and-scheme guidelines-12th-plan pdf
****************************************************
2733
ISSN: 2005-4289 IJDRBC
Copyrightⓒ2020 SERSC