Luxmi Tea has announced it will invest between $28 million and $30 million in Rwanda over the next 10 years, making it the first Indian firm to set up a greenfield project in tea processing in the country.
Through its Rwandan subsidiary, Rugabano Tea Factory, Luxmi aims to reach its full capacity of producing 4,000 metric tonnes of processed tea every year in the next 10 years.
The factory, which was inaugurated on Thursday in Karongi District the Western Province, currently produces 1,000 metric tonnes of premium black tea, every year, meant for the export market.
“This and other similar projects that we have in different parts of the country are aligned with the target we have of expanding the land dedicated for tea farming,” Gerardine Mukeshimana, the Minister of Agriculture, said as he officiated at the inaugural ceremony.
The big target, she said, was to transform the wellbeing of citizens, especially tea growers.
The factory becomes the 18th tea processor operating in Rwanda.
The factory will have an industrial block of 438 hectares and an out-grower scheme of over 4,000 hectares.
George William Kayonga, the Chief Executive of the National Agriculture Board (NAEB), said: “Back in 2012 the Government started a plan to expand the tea sector and look for more investors to build tea industries across the country.”
According to Rudra Chatterjee, the Managing Director of Luxmi Group, the subsidiary also aims to expand its portfolio.
While Luxmi Tea leads the project, The Wood Foundation Africa and DFID are supporting and funding the project.
“Our goal is to make sure that Rugabano, starting today, makes the best tea in Rwanda,” he 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.
According to statistics from NAEB, last year Rwanda fetched more than $83 million from tea exports from 30,000 metric tonnes that were exported.
All factories increased their production compared to the year before with a consolidated percentage increase of 20 percent.
However, tea factories currently operate only at 69 percent year of their installed capacities.
Grown on 27,759 hectares across 12 districts, tea is a source of income to about 42,840 farmers.