Rwanda’s largest tea factory offered to small farmers | The new times

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Prime Minister Edouard Ngirente on Monday March 28 presided over the handover ceremony of Mulindi Tea Factory – Rwanda’s largest tea factory – to 5,000 smallholder farmers in Gicumbi district, a move that is expected to help farmers make more profit from tea sales.

It becomes the first factory to be wholly owned by smallholder farmers, according to information from the National Agricultural Export Development Board (NAEB).

The development was made after Wood Foundation Africa and Gatsby Africa transferred their shares in the factory to small tea cooperatives based in Gicumbi.

The two philanthropic investors acquired the factory when it was privatized by the Rwandan government in 2012.

A partial view of the Gicumbi tea factory, now 100% owned by smallholder farmers in Gicumbi district, Northern Province, Monday, March 28, 2022 (Photo courtesy)

Following the privatization of Mulindi Tea Factory in 2012, the Wood Foundation and the Gatsby Foundation, through their joint regional philanthropy company, East Africa Tea Investments (EATI), acquired a 55% majority stake in Mulindi Tea Factory.

The tea growers owed 45% of the shares in the factory. The foundations said that over the past 10 years they have provided a combination of financial, technical, managerial and governance support to turn around the plant’s business.

Today, the factory is 100% farmer-owned, through two smallholder tea cooperatives – the Mulindi Tea Cooperative (COOPTHE) and the Mulindi Village Tea Cooperative (COOTHEVM) and their umbrella investment, Mulindi Tea Company (MTC).

Build on achievements

Ngirente told the farmers to build on the gains made to continue producing more quality tea, thanking the Wood Foundation for their support in joining the Mulindi factory since 2012.

“This noble initiative has improved the incomes, skills, knowledge and livelihoods of small-scale tea farmers in the Mulindi region. The government of Rwanda commends you for all the philanthropic activities in the tea sector in Rwanda,” he said.

Sir Ian Wood, executive chairman of the Wood Foundation, said they want more farmers to run successful businesses and earn increased incomes, Monday March 28, 2022 in Gicumbi District (courtesy photo

Since privatization a decade ago, the foundations have invested more than $15 million in the Mulindi factory, including helping to increase its capacity, expand tea plantations, and train farmers in tea growing and processing. corporate governance.

Elysée Ntabwoba, Chairman of the Board of COOPTHE Mulindi said the price given to farmers for their green tea leaves has more than doubled from Rwf115 in 2012 to Rwf276 mainly due to quality improvement.

“We are happy that the charity investors have transferred their shares to us without any profit on their business after supporting us to obtain the required capacity. We assure you that the good performance of the plant will be maintained,” he said.

Sir Ian Wood, Executive Chairman of The Wood Foundation, who attended the ceremony on behalf of the Philanthropic Investors, said: “We are very pleased to be handing over a successful, well-established business and will continue to provide support for an interim period.” . .

Prime Minister Edouard Ngirente accompanied by other officials visit the Mulindi tea factory during the handover ceremony in Gicumbi district on March 28. Courtesy

The philanthropic investors said they had recovered their social capital and were handing over the [factory] business to farmers with no return.

“Nothing will make us happier than to see this business succeed and to see the farmers making a lot of money,” Wood observed.

About the plant and its impact

Commercial tea production in the Gicumbi district began in 1960 with the construction of the Mulindi Factory Company. It is the oldest and largest factory in Rwanda in terms of production.

The factory produces up to 4 million kilograms of manufactured tea and generates revenues of up to $9 million per year, according to information from NAEB.

Gerardine Mukeshimana, Minister of Agriculture and Animal Resources, said the Mulindi tea factory is the largest factory, contributing about 10 percent to Rwanda’s annual tea export earnings of around 9 billion Frw per year.

She said the negotiations [made to have farmers fully own the factory] aimed to ensure that this money further supports the development of tea farmers and improves their livelihoods.

Tea remains Rwanda’s main source of agricultural export revenue. In 2021, Rwanda earned over $96 million by exporting over 35 million kilograms of tea, compared to over 32 million kilograms sold for over $90 million in 2020, according to NAEB data.

The plant has improved the lives and livelihoods of people in the Mulindi region through various achievements made possible by factors such as the doubling of the processing capacity of the plant from 60 tons to 120 tons of green leaves per day.

And the average annual gross income of farmers has increased from $1,412 in 2013 to $2,881 in 2021.

The production of green leaves increased from 13.5 million kilograms in 2013 to 18 million kilograms.

In addition, over 5,000 farmers have been trained in best tea management practices.

Meanwhile, Ngirente said, “The Wood Foundation is currently involved with six tea factories. It plays an important role in creating economic activities to empower rural communities through business development, capacity building and financing.

Wood said he has invested $140 million in Rwanda’s tea sector since 2014.

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