Saturday, May 16, 2009

Rwanda: US $ 5m to be sunk in project to boost tea, coffee production.

The New Times-Kigali
May 16, 2009

George Rubagumya of Olyana Holdings, Anthony Butera of Ocir-The and Srinivasa Rao, exchanging papers after signing the agreement at RDB Offices yesterday.

(Photo/G. Barya).

Rwanda Development Board (RDB), the National Tea Board (OCIR-The) and the Rwandan Coffee Authority (OCIR-Café), yesterday signed an agreement with two international companies to set up an organic fertilizer manufacturing plant in Rwanda.

The project is worth over US $5m. The joint venture will see Olyana Holdings, an American firm and Kenya’s Athi River Mining Company set up a plant to manufacture organic fertilizers, from lime.

The venture is expected to boost the production of tea and coffee which are Rwanda’s leading cash crop foreign exchange earners. The project is also aimed at cutting costs of production as it will save money previously incurred in importing fertilizers.

According to Bloomberg, a leading business television channel, Rwandan tea production rose by 28 percent in March.

Rwanda produced 1.89 million kilograms (4.17 million pounds) of tea in the month, compared with 1.48 million kilograms in February.

Rwanda expects production to increase 23 percent this year to 24.6 million kilograms.

The tea authority owns six tea estates and buys the crop from about 30,000 small-scale farmers.

Rwanda sells about 60 percent of its tea at the Mombasa Tea Auction in neighbouring Kenya, with the remainder sold directly to merchants. As a way of encouraging importation of fertilizers into the country, government waived all taxes on imported fertilizers.

“This project will significantly help us increase the output of our crops in terms quantity and quality and also clear the constraints we have been encountering as we tried to secure these fertilisers from abroad,” said Clare Akamanzi, the Deputy CEO RDB/Business Operations and Services.

The Director General of OCIR-Café, Alex Kanyankole, also noted that the venture, when completed will be a relief to the country where coffee farmers have been solely relying on imported fertilizers.

On behalf of OCIR-The, Director General, Anthony Butera, also anticipated growth in output and quality after the plant, which will use over 30 percent of local ingredients to manufacture soil specific fertilisers is fully operational.

According to the investors, other ingredients like chemicals and blenders will be imported because they cannot be obtained locally.

“We don’t only hope that this project will help increase the output, we are also targeting improving the quality to increase the supply on the World market, said George Rubagumya on behalf of Olyana Holdings, also promising that they will ensure that the plant is environmentally friendly.

The American Firm which is already investing in tea industry in Rwanda owns 60 percent stakes in Gisovu Tea Factory in the Western Province.

Rubagumya added that the $5m is the initial investment but more investments will be made at a later stage where production will be improved to have 70 percent of the raw materials locally produced.

According to Srinivasa Rao, Athi River Mining Company, potential sites for mining lime have already been identified in Musanze, Karongi and Rusizi districts where abundant amounts of unexploited lime have been discovered.

He added that the Kenyan firm which has already been engaged in manufacturing soil specific fertilisers across the globe has already ordered for lime mining equipment and installation will begin as soon as the two firms complete the expeditious feasibility studies that are currently on.

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