Calcutta, May 8: Tata Tea has teamed up with a Chinese firm to expand its green tea business.

The Tata company will set up a joint venture with Zhejiang Tea Import and Export Company at an economic development zone in Anji County, Zhejiang.

The company will make and market green tea extracts, cold and hot water soluble instant tea, liquid tea concentrates and other value-added products.

“This project will help the Tata group reach out to the Chinese and Far East markets,” said Percy Siganporia, managing director of Tata Tea.

Tata Tea will own 70 percent of the registered capital of the joint venture.

The initial investment of Rs 70 crore will be funded through a mix of equity capital and borrowings.

According to Chinese media reports, construction of the facility will start in the second half of this year. The company will produce 1,700 tonnes of green tea products in the first three to five years.

“This was a strategic move for Tata Tea which has been eyeing the Chinese green tea market. The ready-to-drink variety of green tea is a rage globally,” an industry expert said.

Zhejiang Tea, established in 1950, has annual sales of over $100 million.

The company employs about 500 people and exports over 40,000 tonnes of tea or 25 per cent of China’s exports.

Extracts, value-added beverage products, tea concentrates and water soluble instant tea are the fastest growing categories in these regions rather than the traditional varieties of tea.

Morocco is the leading consumer of green tea, followed by Japan.

Tata Tea is one of the 25 companies that had bid for the Moroccan Tea and Sugar Company, popularly known as Somathes.

In Poland, where Tata Tea recently acquired the trademarks of Vitax and Flosana from Premium Foods, green tea is becoming popular. Green tea makes up 5 per cent of the 30,000mt tea Poland imports.