Home Business & TechEconomy Rwanda Unveils New Factory to Boost $209M Tea Exports Target

Rwanda Unveils New Factory to Boost $209M Tea Exports Target

by Dan Ngabonziza
5:27 pm

One of the tea plantations in Western Rwanda. A new tea factory will be launched tomorrow

Rwanda will tomorrow, August 29, unveil a state-of-the-art Tea factory in Karongi district, Western province, which is set to boost tea production and export earnings from the country’s key cash crop.

The factory, located in Rugabano sector in Karongi district, is expected to process 4 million kilograms of tea every year.

In 2017, Rwanda entered into an agreement with Assam’s Luxmi Tea Co. Pvt. Ltd – an Indian company to develop around 4,500 hectares (ha) of tea plantation, jointly with local tea growers.

In the first phase, Luxmi Tea was given 438ha under lease from the Rwandan government, in which the company supports local growers with the know-how to cultivate 4,000ha more, and buy their crop paying a 44% share of the revenue.

The factory to be inaugurated tomorrow is the first phase with the capacity to process 1,000,000Kg of dry tea a year, according to Rwanda’s National Agricultural Export Board (NAEB) officials. The factory will be upgraded in the coming years.

According to Agriculture Minister Dr Geraldine Mukeshimana, the deal between the government of Rwanda and Indian company was entered to emphasise on the government’s efforts to “promote agricultural exports, particularly tea exports.”

The multi-million dollar project is set to benefit more than 7,000 farmers. The tea company, according to NAEB, has an industrial block of 438 hectares and out-grower scheme of over 4,000 hectares of tea plantations.

Under the deal signed between Rwanda and Indian company, over $30 million will be invested in the next 10 years, with a prospect of full production of 8000- 9000 metric tonnes of processed tea per year.

Tea growing is one of Rwanda’s mega export earner. As of the end of financial year 2018/2019, Rwandan tea producers had exported 30.573 MT – generating $83,552,108 from tea grown on a total area of 27,112 hectares.

By 2024, NAEB says, a total volume of 65,099 Metric Tons of Rwanda Tea will have been exported – generating $209 million.

To expand its tea exports base, the country has embarked on quality – which recently earned it global accolades at the Nairobi Auction in Kenya earlier this month.

At the auction, Kitabi Tea Factory – one of the tea marks sold under Rwanda Mountain Tea at the East African Tea Traders Association (EATTA) in Mombasa scooped the unprecedented price of $6.06 per kilogram for its best BP1 invoices.

In tea jargon, the codes BP1, PF1 and others correspond to the tea grades – BP1 being the top grade.

The record price won by Rwandan Tea factory is the first to be reached in the history of EATTA auction since its inception in 1956. At the same auction, Gisovu tea factory came second selling at $5.97 (approximately Rwf4500) per kilogram.