In 2000, the ownership of the tea farm was acquired from the Tanzania Tea Authority (a parastatal), following the privatization of state firms. For continuity reasons, the company retained about 100 TTA staff members. The size of the land at the time of the takeover was 244 Ha, of which only 120 Ha was used. The value of the property at the time of the takeover was Tshs 355.000.000. From the start until 2005 the company rehabilitated the tea farm whereby a productive area of 244 Ha was used. Between 2006 and 2010 the company planted an additional area of 156 Ha, bringing the total area to 400 Ha.
In 2008 new machinery has been deployed with a processing capacity of 2 million kgs per year. This improved the quality of the tea and thereby fetching better prices up to $3.0 per kg. However, due to the fall of the world economy, the export prices dropped to low levels. Based on the 2013 revaluation report, the value of the company's total assets stands at Tshs 20 billion.
In order to compensate the fall of the export prices, the company was compelled to focus on the local market which offered better prices. Because of this in 2009 a tea blending company has been incorporated to serve the local market. The blending company produces 250,000 kgs of tea per year although the installed capacity of its machines is 400,000 kgs per year. Currently, the blending company only sells its products in the Lake Zone in Tanzania but a goal has been set to cover the whole country. Due to the high quality and uniqueness of the product, the demand for it is very high and the subsidiary company now ranks 4th amongst the 15 blending companies in Tanzania. It's revenues amount Tshs 1.500.000.000 (US$ 700.000) per year.
The declared number of outgrowers at the time of the takeover was 500 and their declared hectarage amounted 1,250. However, after a census, the productive hectarage amounted 100 Ha only. Due to the company's efforts the total productive area now is 200 Ha with 200 farmers, but another 300 Ha can be claimed. The company continued to support farmers through farm inputs and extension services. The number of farmers when starting was 200 but now has increased to 500. The company's and outgrowers added together, totals 900 Ha. In the event the company obtains financial support, it can as well support upto 600 farmers.
Since 2010 the company is operating under its installed capacity of 30 metric tonnes of processed tea per year with a production of only 10 metric tonnes. The latter has resulted into an unmet demand at the Tanzanian market and an insufficient return on investment. Because of this in 2015 it was decided to increase the green tea leaf production as well as the institutional development for supporting the core business and to improve the staff morale, the infrastructure as well as the marketing activities for the company.
Currently the company uses 30.8% of its capacity of which 56% is processed into primary made tea and 44% into secondary made tea. The current production level is too low for a well maintained estate that can produce a total of 20,000 kgs of green leaves per Ha.
It has therefore been planned to increase the green tea production to 30 tons per day both coming from its estate and from the individual outgrowers. This can be accomplished by embracing new farming technologies such as EM, irrigation systems and providing trainings to the applicable farmers.
Because of this the company is looking for funds to expand the green tea leaf production, being the only manufacturer with about 300 ha of land for growing green tea plus 45 ha pilot project for tea. Additionally in the project area there are 48 villages with 1394 farmers of which 73 cultivate tea.
The company's general purpose is to expand the tea farming activities and the tea processing factory and there is also a need to deploy the total capacity of the factory by increasing the amount of tea processed, especially for the owned farms.
Interested? For more information including business plans and financial statements, please contact:
Jan Reijer Brons