TANZANIA – Kayonza Growers Tea Factory has inaugurated a TZS 20.8 billion (US$0.854m) subsidiary in Mpungu, positioning Kanungu District as a prominent tea production hub.

Mr. Marcel Asiimwe, the Kayonza Growers Tea chairman, said during the opening that the construction of Mpungu tea factory started in 2020 following increased tea production from farmers in Kanungu, which could not be absorbed by Kayonza.

“Our factory at Kayonza was overwhelmed. So, we decided that a new processing plant be established to take care of increased production and expansion needs for tea growing in Kanungu,” he said.

Mr. Asiimwe added that the project cost Shs20.8b financed through a long-term loan of Shs16.2b from Oiko Credit, a Dutch funding entity, and Shs4.6b from Kayonza Growers Tea Factory.

According to Robert Kakuru, the Mpungu Sub-County chairman, the factory will help farmers to overcome exploitation by middlemen, many of whom have in the past taken advantage of oversupply to manipulate market prices.

“It will not only help farmers fetch better prices but also ensure quality,” he said but expressed concern over infrastructural challenges, among which include a poor road network and inefficient power supply.

The challenges are expected to impact the factory in a major way. Mr. Asiimwe underlined that the factory is estimated to consume 80 litres of diesel per hour, which translates into a per-hour expenditure of Shs4m or Shs180m per month, becoming an unsustainable expenditure.

The factory is expected to employ about 220 people directly several hundreds more indirectly through new opportunities in  transportation, logistics, and support services, further stimulating economic growth and reducing unemployment rates in the district.

This investment comes at a time when the country has slashed costs borne by traders, who had to travel all the way to the Kenyan port city of Mombasa where Tanzanian tea was previously auctioned, by opening an action market in Dar es Salaam.

Tanzania Tea Board (TTB) director general Mary Kipeja said during the first auction: “We have engaged all the relevant stakeholders, including big processing factories, buyers, and brokers.”

These capacity-building initiatives were meant to ensure that all players understand market regulations and dynamics and how the digital system will operate.

With the auction closer home, it is expected that traders will cut operating costs by up to 50 percent by not having to travel all the way to the Mombasa auction.

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