Beeyu CMD B. P. Singh (right) and finance director F. J. Kapadia in Calcutta on Monday. A Telegraph picture

Calcutta, May 23: Beeyu Overseas Limited has decided to sell bulk tea in the domestic market as prices are showing signs of recovery. The company depended only on exports till recently.

The company has appointed big auction houses ? J. Thomas & Co, Carritt Moran and Paramount ? to sell its tea at home.

The company, which is only into South Indian tea production, is scaling up its volumes from 3000 tonnes per annum to 9000 tonnes per annum by 2006.

Chairman and managing director B. P. Singh said, ?The expansion programme for Beeyu CTC and orthodox tea will allow the company to meet the growing demand for tea in the international and domestic markets.?

Beeyu has recently de-bonded its export-oriented unit for CTC tea for a greater flexibility to market its product at home and abroad.

In the first phase of the expansion, the company plans to set up one CTC and one orthodox tea factory, which will become operational in September.

The expansion will double Beeyu?s total manufacturing capacity from 3,000 tonnes a year to 6,000 tonnes a year. The second phase will involve setting up another CTC and orthodox factory. These will be commissioned in September 2006 and will take the capacity to 9,000 tonnes.

The expansion projects will involve a total outlay of about Rs 13 crore. The company has already been sanctioned a term loan of Rs 3 crore by State Bank of India and the balance will be funded by the proceeds of a public issue.

The company is coming out with its second public issue of 71,40,000 shares of Rs 10 each for cash at a premium of Rs 4 on May 26. Capital mobilisation through the public issue will be Rs 9.99 crore.

Director (finance) F. J. Kapadia said, ?In view of the economies of scale, the cost of conversion from green leaf to black leaf will come down to Rs 8 per kg compared with a standard of Rs 12 per kg when these factories come up.?

The company has tied up with agents in Dubai and Ukraine to sell tea in those markets.