Rwanda Mountain Tea, owners of the Rubaya and Nyabihu tea factories has acquired the 65 percent government stake in Kitabi tea factory a top official has revealed.

The factory located in Nyamagabe district, Southern Province, produced about 1.7 million Kgs of tea in 2008.

The Director General of Rwanda Tea Authority (Ocir-Thé), Anthony Butera said that the stake in Kitabi, was bought at $4 million (Rwf2.3 billion).

"The deal was technically finalised on Monday. Ocir-The and Rwanda Development Boards (RDB) finalised the deal with Rwanda Mountain Tea and now the factory is under their management,” he said.

The official handover ceremony will be communicated soon.
Rwanda Mountain Tea in 2006 procured government stake in Nyabihu and Rubaya at a combined total amount of $3 million (Rwf1.7 billion), leaving 10 percent shares to local cooperatives.

They were however conditioned to further inject $2.2 million (Rwf1.25 billion) to update machinery, rehabilitate and expand the factory.

Kitabi tea factory was one of the two tea factories government put up for sale this year in order facilitate the much needed investment for expansion of the sector.

It was also said that the factories can be managed better in the hands of the private sector.

Butera said that Gisakura tea factory in Nyamasheke district, Western Province with 45 percent shares on sale is yet to be procured. He added that many have already expressed interest.

Both factories had been targeted by Dubai World in 2008, however the United Arab Emirates (UAE) consortium pulled out owing to the global financial crisis.

Privatisation of nine government-owned tea factories began in 2003 and has seen four factories procured. The remaining tea factories are Mulindi, Gisovu, Mata, Gisakura and Shagasha.

It is however reported that a purchase agreement for Gisovu tea factory and plantation has been reached between government and Oryana Holdings, an American firm.

Privatisation of the tea industry is seen as something that will help the tea cluster meet its ambitious export target of fetching $91 million (Rwf51.7 billion) by 2012, by pursuing higher margin teas with direct sales, as well as blended and packaged teas.

According to the 2008 Rwanda Tea Strategy, government intends to generate wealth by selling a high quality range of branded Rwandan teas with some added value through partnerships with new and existing buyers in Europe, US and the Middle East.

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