The Rwandan Tea Industry
In 2003, Rwanda government wants to transform tea industry that produces in the country into global market. To face with global competitors, the government believes that the industry should develop diversification and value-added product to improve quality and productivity as well as maximize revenues so the government moves the industry into private investors to attract technology, management expertise and stimulate the country’s plantation to invest in a higher quality product. Furthermore, I will try to explain SWOT analysis to cover the internal and external factors of tea industry in Rwanda.
• Rwanda had lush tropical lands that perfect for tea cultivation.
• Labor costs in Rwanda remained low.
• Rwanda was no climatic obstacles that prevented Rwanda’s growers from cultivating the highest quality types of tea, no technological gaps that prevented factories from entering the higher value segments of tea industry.
• Rwanda’s economy was growing and macroeconomic stability was assured.
• Rwanda’s production was concentrated in Black tea sector which prices were most volatile.
• Yields at Rwanda tea factories for swamp and mountain tea lagged behind Kenya, India, and Sri Lanka by 26%.
• Rwanda could not generate as much revenue from production.
• Rwanda was not selling much of its tea harvest at home. Only 3% of Rwanda’s tea was consumed locally.
• Transportation costs for tea to be significantly higher than Kenya because of geographic location in Rwanda.
• Tea was the second most popular beverage in the world.
• The global tea market was upscale.
• CTC and orthodox teas accounted for 75% of the global tea market which Kenya, Uganda, and Rwanda were the major suppliers of CTC tea.
• Tea production occurred in a band of nations with similar geographical attributes in many regions where highest quality teas could be produced.
• Asia remained the world’s largest tea