Dubai World, an investment company that manages and supervises a portfolio of businesses for the Dubai government is still negotiating two possible take-overs of Gisakura and Kitabi tea factories, a top official has revealed.
Anthony Butera, the director general of Rwanda Tea Authority (Ocir-The) said last week, that Gisakura and Kitabi are being negotiated for uptake by Dubai world but the company has not yet made any standing commitments.
In December 2007, Dubai World, the state-owned enterprise, announced an investment totaling some US$ 230 million into Rwanda’s tourism sector.
Just after six months, the firm expressed interest in Gisovu tea estate and factory, Gisakura tea estate and factory, as well as Kitabi estate and factory - all in western Rwanda. Observers believed that these deals had hit a wall following Olyana holdings’ purchase of 60 percent of Gisovu tea estate and factory in December last year.
But without revealing the details Butera said: “we are still negotiating with these prospective buyers.” The government courtesy of its privatization programs plans to pull out of tea factories, leaving them in the hands of private investors and farmers.
“This is a national policy and the government of Rwanda is trying to divest from the tea sector, but the new approach to privatisation is to try to allow participation of local investors as a priority, to allow tea farmers as shareholders in the privatised facilities as also a priority,” Butera said.
According to the DG, in the new approach government maintains a stake so as to be able to keep a follow up and control on the implementation of the business plans that are presented by the strategic investors.
Out of the 11 factories in the country, government still owns six of which cabinet in December last year approved the sale of 60 percent stake of the Gisovu Tea Factory to Olayana holdings, a US conglomerate.
“They have not yet signed the sale purchase agreement,” he said. Ocir-The is targeting five more new factories by 2012 in order to process the anticipated increase in tea volumes.
“We hope that , if these people come up we shall divest and allow them to manage the facilities as we concentrate on putting up new ones,” Butera added.
He added that the government is ready to sale all the tea factories but that the regulator is not in a position to determine how long the process will take.
“What is paramount is that a facility once privatized functions better, gets more revenues and the country gets more foreign exchange earnings. This trickles down to the farmers in the form of better services from whoever will be owning these facilities.” Butera said.
He added that: “the government’s objective is to have the facilities running better and benefiting all the farmers, the country and the investor in a more appropriate way,”