TANGANDA Tea Company (Tanganda) says it has invested extensively towards increasing the economic value of its major crops to mitigate its exposure to price volatility in primary agricultural markets.
In a recent interview with The Financial Gazette, Timothy Fennell, Tanganda’s chief executive, said increased value addition would be a key long-term strategy for the company.
“In terms of value addition, the three major crops where we have put in a lot of value addition equipment would be tea, where we have spent probably in the region of €8 million (US$8,51 million) on state-of-the-art packing machinery that is for both local, retail, exports, and regional,” he said.
He said macadamia was financed through the Trade and Development Bank, formerly the PTA Bank, while other projects were self-funded.
“So that is a substantial investment that involves machinery from Italy and Germany, machinery that is in line with all the top packers in the world,” he said.
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“As for macadamias, we are embarking on a cracking plant so that we can enter the world of kernel marketing, which is a worldwide industry as opposed to the nut and shell market we are already in, which is very much restricted to the east, China, Vietnam, and places like that,” he said.
He said value addition of avocado fruit will make the company more competitive in the export market.
“On avocado, we have put in a US$3 million packing house so that we can pack and store the fruit in a refrigerator. This will enable us to deliver the fruit to the port in Cape Town for onward shipment to Europe, where it is handled by our agents there; that will be the major investment.”
The southern African country has had a run of debilitating trade deficits because it relies too heavily on raw and semi-finished export products.
At its peak in 2000, the horticulture sector contributed over US$125 million in export revenue. Currently, the sector generates US$77 million in export revenue.
In its annual report for the year ended September 30, 2022, Tanganda revealed that its energy costs declined in 2022 on account of investments in renewable energy, which now meets 20,55 percent of all its power needs.
This comes at a time when the country is facing an energy crisis, with increasing shortages of electricity hampering industry and investment.
It reported a net profit after tax of $582,7 million for the fiscal year ending September 30, 2022, a rebound from a $318 million loss the previous year.
Operating profits for the year stood at $3,1 billion, while gross profits stood at $4,1 billion.
Total revenue stood at $12,2 billion, which was a 7,7 percent rise from the unaudited comparative for 2021.
Export sales were up by 2,9 percent to $6,3 billion, while local sales increased by 21,7 percent to $5,89 billion.
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