Ntingwe Tea Estate in KwaZulu-Natal’s rural Nkandla district has survived tough economic conditions and continues to produce a premium export product. Ntingwe is also the single biggest employer in that remote region, and like so many other tea estates largely remains supported by government to prevent large-scale unemployment, writes Robyn Joubert.
Ntingwe Tea Estate, in the rural Nkandla district of KwaZulu-Natal, is cementing a foothold as one of the finest tea producers in the world. That is quite a feat in a discerning and extremely competitive industry. The tea estate developed tea plantations on 425ha from what started as a 25ha Sapekoe Group and Industrial Development Corporation (IDC) side-line in the early 1980s.
At that stage the IDC was funding an 800ha fibre project on the land. Both the fibre project and the small tea plantation were, however, shelved until the Ithala Development Finance Corporation injected R40 million into an envisaged tea plantation in the impoverished region in 1993. Its vision was shared by the KwaZulu-Natal Department of Agriculture, which injected an additional R40 million.Ntingwe Tea Estate is now the single biggest employer and source of financial stability in the region close to the Tugela River Valley. It brings employment and skills and encourages small-scale tea growers to supply the now fully-fledged processing facility on the estate.
The estate is under the management of veteran Sri Lankan tea expert Ryle Perera, who plans to plant another 150ha to tea to bring the plantation to 575ha.
Leaves are harvested in early spring and summer from plants that are two years and older. Currently, the mature plants yield 800t of black tea a year and the volume is set to increase to 1 000t by 2014 as the younger plantations mature.
As a foreign exchange earner, the estate is expected to generate around R450 million over the next 30 years. In the 2006/07 financial year the estate’s turnover was about R6,9 million. The estate employs more than 200 permanent staff and 550 seasonal workers with total employment envisaged to grow to about 1 200 at full production.
A high-end market
Considered to have a taste more mellow than other African teas, such as those produced in Kenya, Ntingwe has gained an excellent reputation on the international market and is retailed as a breakfast or afternoon refreshment.
“From the beginning, we decided to focus on the premium single-origin tea market,” says Ryle. “Ntingwe tea is produced on a single estate and isn’t blended, while the commercial tea market is dominated by tea blends containing ingredients produced all over the world.” Tea merchants in the UK rate it highly.
Pure Ntingwe tea is sold under the estate’s name in teabags marked Zulu Tea, while Yorkshire Gold, a blend of Ntingwe tea and other varieties, is a second retail brand sold overseas. For the past five years, the tea has also been sold locally at Woolworths under the Ntingwe Estate brand name. “South Africa imports about 16 million kilograms of tea a year for domestic use. Local demand for a pure, high-quality tea is growing and we’re looking to take significant market share,” says Ryle.
“Quality is paramount and trained tea tasters routinely check every batch to ensure we produce the best tea every single day.”
Contact the Ntingwe Tea Estate on (035) 833 8001 or e-mail [email protected]. |fw
The South African tea industry: viable or not?
South Africa’s black tea export market is worth about R20 million a year, while the country imports about 16 million kilograms of tea a year for domestic use.
Regions with climates suited to growing tea are Paddock, Nkandla, Richmond and Ngome in KwaZulu-Natal, Barberton in Mpumalanga, Tzaneen and Thohoyandou in Limpopo and Lusikisiki in the Eastern Cape. And South Africa produces tea of high quality. Tea packers like Unilever and National Brands, who hold 95% of the tea market with their middle and upper-end teas, make blends of tea using 10% to 15% high-quality local tea. The balance is made up of lower-quality fillers from Southern African Development Community (SADC) countries.
An embattled industry
About 7,4 million kilograms of tea is produced locally each year. However, it’s notoriously difficult to turn a profit with tea in South Africa. In 1999, the country’s 11 tea producers suffered a major blow when the quantitative import-control system was dropped, which meant tea packers no longer had a financial incentive to pack local tea.
Then in 2003, the increase in the minimum wage also severely dented the industry. Tea picking is a labour intensive operation, which requires about four labour units per hectare, pushing production costs up to about R16/kg. This doesn’t compare well with production costs of between R8/kg and R10/kg in the major tea-producing countries of Malawi, Kenya and Sri Lanka, where labour costs are lower.
Blows continued to rain down on the industry. Between 2003 and 2005, tariffs on black tea imported from the SADC were scrapped and the strong rand, prolonged drought and low world tea prices took their toll on tea exports. One by one, South Africa’s tea estates shut down. In 2003, Magwa Tea Estate in the Eastern Cape closed its doors, followed by the Sapekoe group, South Africa’s biggest tea producer with several tea estates in Limpopo, closing in December 2004. Then in 2005, the Paddock Tea Company closed its doors.
However, a number of private sector and government partnerships have led to the revitalisation of the industry and today five estates are in operation. In the Eastern Cape, an attempt was made to put Lusikisiki’s Magwa Tea Estate back on the map with financial assistance to the tune of R26,7 million from provincial government and a joint partnership between the Asian tea giant Gokal and the German submarine manufacturer Ferrostaal, spearheaded by the Eastern Cape Development Corporation (ECDC). Today, both estates in the Eastern Cape, Magwa and Majola, are being kept afloat by provincial government subsidies.
Tshivhase and Mukumbani tea estates in the Vhembe district of Limpopo were recently resuscitated from the Sapekoe group’s ashes with a R74 million injection from the Limpopo provincial government. Ntingwe Tea Estate in KwaZulu-Natal was set up in 1993 with R40 million from Ithala Development Finance Corporation and later R40 million from provincial government.
Crucial government support
Dikeledi Magadzi, the MEC for agriculture in Limpopo, said in the department’s 2008/09 budget the Vhembe tea estates were the biggest employment project in the province with over 2 450 workers taking home R25,6 million in wages a year. “This project is on its way to becoming one of the sustainable projects in the province,” said Dikeledi, promising that the provincial government would provide more funding in the coming year.
This is contrary to the view of agriculture minister Lulama Xingwana, who said at a land reform imbizo near Thohoyandou in April 2007 that those tea estates would be supported only until the end of March 2008. “Thereafter, the project will be self-sustaining if the technology acquisition [and other criteria] are implemented,” she said.
“While tea cultivation in South Africa is not currently viable, investigations are underway into making it viable,” says Nick Coleman of the quasi-government group Trade and Investment KwaZulu-Natal. “One way is through cooperative agreements between different provinces and another is to brand tea instead of selling it in large anonymous bags.”
Magadzi is thinking along the same lines. The Limpopo Department of Agriculture has reached a cooperative agreement with its Northern Cape counterpart to develop market-access relations with the Rooibos growers in Nieuwoudtville and Calvinia, and over 500t have already been purchased for blending and packaging of a special Rooibos collateral brand along with Limpopo’s black tea.
Magadzi also said strategic investor Tanzanian Tea Blenders had been brought in to market Limpopo’s tea regionally and internationally. “It has already found a market for our tea in the United Arab Emirates and discussions are ongoing to conclude deals in Iran which has over 74 million people who consume over 310 million kilograms of tea a year,” said Magadzi.
In March 2008, Mbulelo Sogoni, the then Eastern Cape MEC for the Department of Economic Development and Environmental Affairs, said the ECDC would provide strategic management for Magwa Tea Estate to ensure production didn’t come to a halt and jobs were saved.
Although the lead role had initially been appointed to the Department of Agriculture in the 2008/09 financial year, Sogoni said the ECDC and relevant stakeholders had developed a medium to long-term sustainability plan for the project. “The plan addresses areas such as infrastructure rehabilitation, multi-crop production, agroprocessing operations and marketing strategy,” said Sogoni. “It also takes into account the executive council decision to promote the consumption of Magwa tea on the domestic market.”
Ongoing initiatives
South African tea estates are in a precarious financial position and survive partly because they produce a superior product, but mainly on support from government, says Nick.
“However, tea estates are often in rural poverty stricken areas such as Nkandla or Lusikisiki and are often the only large commercial enterprises for miles around,” he explained. “Therefore, although the estates receive financial support from government, it’s done to prevent an increase in large-scale joblessness. All support for tea production in South Africa is undertaken on the understanding it should lead to the eventual self-sustainability of the industry.”
Jobs from leaves uplifting communities
The development of the Ntingwe Tea Estate has unlocked the potential of the region and begun an upliftment process that gains in momentum each time the estate expands. Since its inception, the estate has been actively involved in community development, contributing directly to water supply for about 10 000 people in 13 surrounding villages. Other projects include road development, the establishment of a clinic, a school and a crèche. Community vegetable gardens have also been established as well as a youth poultry project and electricity and telephone service-supply upgrades.
The estate employs almost 800 people on a full-time or part-time basis from surrounding villages and kraals and has trained them as farmworkers, electricians, managers, administrators and nurserymen. There is potential to develop up to 400 small tea farmers on land surrounding the estate. “Already five plots, each planting just under a quarter hectare with 1 000 tea plants, have been established and a keen interest is shown by the community to grow tea on their own plots,” says Ryle Perera, Ntingwe Tea Estate general manager. “These growers will eventually farm up to half a hectare, growing tea according to our parameters to ensure quality is maintained. The estate purchases leaves produced from these plots for processing at our on-site processing plant.”
The development of the Ntingwe Tea Estate has unlocked the potential of the region and begun an upliftment process that gains in momentum each time the estate expands. Since its inception, the estate has been actively involved in community development, contributing directly to water supply for about 10 000 people in 13 surrounding villages. Other projects include road development, the establishment of a clinic, a school and a crèche. Community vegetable gardens have also been established as well as a youth poultry project and electricity and telephone service-supply upgrades.
The estate employs almost 800 people on a full-time or part-time basis from surrounding villages and kraals and has trained them as farmworkers, electricians, managers, administrators and nurserymen. There is potential to develop up to 400 small tea farmers on land surrounding the estate. “Already five plots, each planting just under a quarter hectare with 1 000 tea plants, have been established and a keen interest is shown by the community to grow tea on their own plots,” says Ryle Perera, Ntingwe Tea Estate general manager. “These growers will eventually farm up to half a hectare, growing tea according to our parameters to ensure quality is maintained. The estate purchases leaves produced from these plots for processing at our on-site processing plant.”
New developments at Ntingwe
To further revitalise the project, the production of green tea was investigated and it was decided to produce a very healthy low caffeine green tea (LCGT) using Japanese technology. The KwaZulu-Natal Department of Agriculture and Environmental Affairs have provided R17 million in funding, and Ntingwe commenced producing LCGT in December 2008. The high quality of the green tea convinced the Japanese to place an order at a much higher retail price than what Ntingwe is getting for its black tea. Ntingwe LCGT also plan to penetrate the European and American markets.
