Tanganda eyes Asian market

DESPITE widespread threats of El Nino, listed tea processing giant Tanganda Tea Company has laid out its export strategy to non-European Union and United Kingdom markets and is exploring market diversification into Asian markets.

The penetration of the Asian markets will allow the firm, which is turning 100 years old this year, to maximise exports in the early parts of the harvesting season.

Zimbabwe and Southern Africa are experiencing El Nino weather conditions, which are characterised by low rainfall and extremely high temperatures.

In its 2023 annual report, chairperson Mr Herbert Nkala said the predicted El Niño is not expected to significantly impact avocado and macadamia yields as the company is invested in dams, reservoirs and high-technology precision irrigation to mitigate the impact of a drought.

“Yields of avocado and macadamia are expected to increase with enhanced maturity profiling of plantations over the next three to five years.

“The demand for our products remains relatively strong despite the impact of complex macro-economic factors on the local and regional markets. The growth strategy is to diversify the regional market further.”

Mr Nkala noted that the company strategy is to invest in value addition on the 25-30 percent non-European Union/United Kingdom exportable fruit through the local affiliate associations (the Zimbabwe Avocado Growers Association and the Horticultural Development Council), and also in partnership with the exporting agent.

According to the report, the total hectares under macadamia plantations is 894 hectares with 18 hectares developed during the financial year.

The total hectares are split between 876 hectares planted on own estates and 18 hectares on a third-party farm on a joint venture arrangement.

It noted that 786 hectares of the 894 hectares were mature as of reporting date and the average age of the plantation is nine years. Macadamia trees have a 40-year economic life.

In the period under review, macadamia production declined from 1 076 tonnes in 2022 to 921 tonnes in 2023.

“While macadamia plantations are under precision irrigation systems, the excessive heat and the prolonged period of heat experienced in October to December 2022 resulted in a nut drop. Exports of nut in shell of 1 551 tonnes were achieved during the financial year including preceding year stock.

“The impact of the shift in market preference from nut in shell to kernel was evident from the progressive price decline in the primary product. Global prices of nuts declined from an average of US$5,12 per kilogram achieved in 2021 to US$3,26 per kilogram in 2022 and US$1,92 per kilogram in the current year.”

The firm said to mitigate the developments, its strategy is to invest in value addition which will facilitate market diversification.

Bulk tea export volumes of 6 238 tonnes registered a 12 percent decline from 7 125 tonnes achieved in the prior year.

The average export price firmed slightly to US$1,44 per kilogram from US$1,42 per kilogram. The balance of production was processed and packed for final consumption in Zimbabwe and regional export markets

On energy front, Tanganda has invested in green energy through installation of three independent battery supported solar energy plants on three of its five estates.

Total maximum production capacity of the three plants is 4,4 Megawatt (MW) made up of Ratelshoek estate generating 1,8 MW, Jersey estate 1,4 MW and Tingamira estate 1,2 MW.

“Our strategy is to grid tie the solar plants to the national grid on a net metering arrangement in order to facilitate full utilisation of generated power and to reduce cost of power when the company draws from banked units when solar power is not available for use.

“Solar power has mitigated challenges emanating from inconsistent availability of power from the national grid and has reduced diesel consumed by standby generators,” reads the report.

In the period under review, the company used 1 003 288 litres of diesel and 261 130 litres of petrol during the year.

Diesel and petrol are from non-renewal resources. Energy consumed from renewable sources were 21 039 cubic metres of firewood and PV solar 2 396 897kWh.

Electricity supplied by Zimbabwe Electricity Transmission and Distribution Company amounting to 7 693 471 kWh was also consumed.