RWANDA – Luxmi Tea, an India based tea processing company, will be investing between US$28 million and US$30 million in its Rwandan subsidiary, Rugabano Tea Factory to ramp up processing capacity.
Luxmi unveiled the investment plan during the inauguration of the plant on Thursday in Karongi District, Western Rwanda, making it the first Indian firm to set up a greenfield project in tea processing in the country.
Rugabano Tea currently has an installed capacity to produce 1,000 metric tonnes of premium black tea, every year, meant for the export market.
Through the investment, Luxmi aims to enable Rugabano Tea factory reach its full capacity of producing 4,000 metric tonnes of processed tea every year in the next 10 years, reports New Times Rwanda.
According to Rudra Chatterjee, the Managing Director of Luxmi Group, the subsidiary also aims to expand its portfolio.
The factory will have an industrial block of 438 hectares and an out-grower scheme of over 4,000 hectares. Luxmi Tea has partnered with The Wood Foundation Africa and DFID, who will be funding the project.
“Our goal is to make sure that Rugabano make the best tea in Rwanda,” Chatterjee noted, adding that they have invested in other tea estates, including Pfunda and Gisovu.
Luxmi and The Wood Foundation are majority shareholders in Pfunda and Gisovu. They jointly have a 50 percent stake in Pfunda and 90 percent in Gisovu.
David Knopp, the Director of Africa for The Wood Foundation, described the development of the project as a “massive venture.”
“Our interest in this project is the smallholder farmer, so our aim is to make sure that tea is planted professionally and smallholder farmers get premium quality and premium price,” he said.
George William Kayonga, the Chief Executive of the National Agriculture Board (NAEB), hailed the investment adding that the project supports the government’s ambitions of expanding investment in the tea sector.
The factory becomes the 18th tea processor operating in Rwanda after Sorwathe company, one of the oldest tea companies in Rwanda opened a new green tea factory in Kinihira, Rulindo district in the country’s Northern Province in last year.
In Africa, Rwanda leads the list of countries where consumption is expected to show higher growth at the rate of 9%, followed by Uganda, Kenya, Libya, Morocco and Malawi.
According to statistics from NAEB, last year Rwanda fetched more than US$83 million from tea exports from 30,000 metric tonnes that were exported.