Tea and coffee producer, Tanganda Tea Company limited, a subsidiary of the Miekles Limited Group is set to make inroads into the South African market for its packed tea product as the company seeks to spread its regional footprint to offset diminishing local demand.
In its latest trading update, the Group announced that funds to spend on promotional activities for its tea in South Africa have already been secured with approval from the Reserve Bank of Zimbabwe to facilitate the transfers owing to foreign currency challenges in the country.
“The much-needed RBZ authority to increase promotional spending in South Africa has been secured. This will help to support market penetration efforts to grow packed tea exports,” said Group executive chairman, John Moxon.
According to the Food Agricultural Organization (FAO) South Africa imports about 16 million kilograms of tea each year for domestic use.
Last year international tea prices weakened by 14 percent from US$ 1.64 per kilogram in prior year to US$ 1.44 per kilogram in the year ended 31 March 2020 due to increased supply of tea by Kenya which has not been matched by corresponding world demand.
Tanganda’s diversification strategy which has seen the tea producer embarking in macadamia nuts production has yielded positive export earnings in recent years.
The company posted a 78 percent growth in export sales of macadamia nuts, avocados and coffee for the 2020 full year ended March 31.
“Export earnings from macadamia nuts, avocados and coffee grew by 78 percent from US$ 4.5 million in prior year to US$ 8 million in the year ended 31 March 2020. As a percentage of total exports, these three crops contributed 43 percent up from 25 percent in the prior year. Contribution of the high value crops to the Company’s export earnings is expected to rise to 60 percent by March 2022 as the bulk of them reach maturity. In volume terms, macadamia and avocado export sales grew by 129 percent and 39 percent respectively,” said the Group.
