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Business Reporter
Tanganda Tea Company’s strategic diversification, moving beyond its traditional tea and coffee business is yielding significant good financial returns.
Since entering the avocado business around 2016 and beginning exports in 2018, the company has seen substantial earnings growth.
As its avocado plantations mature, Tanganda’s export volumes have increased dramatically, from approximately 1 300 tonnes in 2018 to nearly 4 000 tonnes last year. This growth, coupled with favourable global avocado prices, has significantly boosted Tanganda’s earnings.
Tanganda’s total avocado harvest increased to 3 976 tonnes in 2024, a substantial 84 percent increase compared to the previous year. The strong avocado performance lifted by a 40 percent increase in the company’s export volumes.
The increase also coincided with a significant jump in avocado prices, which rose from US44 cents per kilogramme in 2023 to US75 cents last year, the company said.
This notable increase in production and favourable pricing enabled Tanganda to return to profitability, posting a profit of US$1,4 million from a loss-making position of US$3,1 million during the previous comparable year.
Avocados have gained widespread popularity as a preferred nutrient-rich food due to their unique nutritional profile. Unlike most fruits, avocados are rich in healthy monounsaturated fats, which are beneficial for heart health.
They are also a good source of fibre, vitamins as well as minerals such as potassium and folate.
The nutrients contribute to various health benefits, including improved heart health, weight management, blood sugar regulation, and overall well-being.
The creamy texture and versatile flavour of avocados have further solidified their place as a sought-after ingredient in various cuisines and diets, fuelling a strong demand on the global market.
Value addition
To maximise returns, Tanganda processed un-exported avocados into oil sold on the local market.
“Growth in export volumes was buttressed by the firming of export prices following global easing of Covid-19 imposed restrictions,” Tanganda said in its 2024 financial results. “The company sold 60 percent of its non-exportable secondary grade for oil extraction and to the retail and informal sector, while 40 percent was unsaleable. In the ensuing financial year, it is expected that the previously unsaleable secondary grades will be channelled towards crude oil extraction.”
With five thriving fruit and tea estates located in Zimbabwe’s Eastern Highlands, Tanganda Tea Company recorded a 9 percent increase in overall revenue, to US$25,7 million for the financial year.
The macadamia division also experienced substantial growth, with production rising by 77 percent to 1 626 tonnes.
However, the segment faced challenges, including logistical issues stemming from rescheduled shipping arrangements, which disrupted exports. Additionally, a shifting consumer preference towards kernels over nuts-in-shell contributed to declining market prices.
To mitigate risks associated with fluctuations in primary produce prices, Tanganda is strategically investing in value addition processes. The traditional tea segment yielded mixed results.
While local sales of packed tea declined partly due to shortages in packaging materials and a weakening formal retail environment. Tea exports surged by 41 percent, demonstrating strong international demand.
Tanganda’s investment in solar energy has significantly helped the company from adverse effects of power cuts experienced throughout the year. The installation of solar plants at three of its five estates — Tingamira, Ratelshoek, and Jersey — has not only provided a sustainable energy solution but has also enabled the company to explore opportunities to sell excess electricity back to the national grid.
“Grid tying and net metering arrangements are key strategies being pursued to capitalise on the surplus power generated from our solar facilities, ultimately aiming to reduce energy costs,” said Mr Herbet Nkala, the chairman of Tanganda.
Tanganda, which was disposed from Meikles Limited in 2021, has strategically leveraged the proceeds from the US$20 million sale of the Meikles Hotel to reinvest in its agricultural operations, highlighting a commitment to sustainable growth and diversification within the sector.
Online Reporter