Tea Production & Export - INVESTMENT OPPORTUNITY - iDiasporan

Tea Production & Export

by Rwandan Development Board

Description

 
Invest in new green-fields sites for tea production and processing, focusing on specialty teas, to take advantage of Rwanda’s excellent business climate.
 
Market opportunity:
  • Tea is Rwanda’s second largest export earner  generating close to $40m in annual revenues.
  • Demand for specialty teas is growing strongly.
  • Global demand requires 60 million kg of tea be added each year to world supply.
  • High potential for growth in yields by up to 30%.
  • Over the last 2 years, the Rubayu tea plantation increased yields by more than 40% through improved agronomic practices demonstrating strong upside.

 

Investment Highlights

  • Existing produc6on is mainly Black CTC (crush, tear, curl), though exis6ng providers are expanding into orthodox loose leaf and green tea varieties.
  • $35m investment is required for five greenfields sites, including tea processing factories, at already identified sites in south-west of the country.
  • Investors can expect $1-3m annual net profits from tea factories and an IRR of approx 22%.
  • Government is commiung up to 130m in transport, electricity and water infrastructure around these sites, and is providing $22m to improve yields and smallholder productivity.


    • Rwanda remains one of the last places where factor costs remain low.
    • Rich volcanic soil, high altitude and rainfall make for ideal growing conditions.
    • Carefully researched tea varie6es are matched with soil conditions.
    • In 2011, Rwandan tea achieved the highest price in Africa at the Mombasa tea auction and has been consistently higher
    • than the international price.
    • Rwandan tea was awarded 1st, 2nd & 4th prizes at the 2012 International Tea Convention.

     

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