Rain Forest Alliance certified and ISO certified Rwanda Mountain Tea (RMT) is a prime example of Rwandan products representing a country that is starting to be known around the world for its quality products and services. General Manager Alain Kabeja discusses the rising awareness of RMT’s fine teas overseas, and how with better transportation links they could go down a treat in the huge US market.
Africa is the youngest continent in the world and will have 1 billion workers by 2040. As agriculture employs the largest part of the population, what are the challenges and how should they be addressed?
In 2040 our population will have doubled, so the first challenge will be to feed this growing population. Africa is still under-developed and it is complicated to fulfill this gap. Between Maghreb and sub-Saharan Africa, a large portion of land is deserted. This creates a problem in terms of distribution. We must invest in cultivation and increase capital. Africa does not have the necessary tools to enhance its agriculture as it should.
The second challenge will be to ameliorate our competence level. If we take the example of Israel, a small country, they have maximized their land’s capacity to boost exports. In Africa we have space but we do not use it to its fullest potential.
Rwanda is embarking in megaprojects, such as the KivuWatt plant or the Northern and Central Corridor routes. How do you expect this will affect the agriculture sector?
We are focused on energy. Everything starts from energy. Development is impossible without electricity and progress is impossible without the right infrastructure, such as roads and railways. These megaprojects will allow us to reduce transport and energy cost. Obtaining low-cost electricity will transform our economies. What we do now is archaic agriculture; to make our sector advance we must go into transformation of raw products, and without energy, we will not achieve this change.
Regional integration policies are forcing our region to work collaboratively to cut down on transportation costs. As a landlocked country, we are greatly affected by the limitation of routes. To export we are forced to use numerous channels for transport. So, these megaprojects will cut down on the price of energy and transportation, highly beneficial to Rwanda.
Mr Egide Gatera has stated Rwanda Mountain Tea leveraged on the privatization policy to seize opportunities and has since steadily been making positive progress and enhanced the competitiveness of Rwanda’s tea sector. What are the main achieved milestones and observed changes since the estates you nowadays own were privatized?
Since Rwanda Mountain Tea negotiated its privatization, we have acquired entire factories. In 10 years of privatization we have greatly enhanced our production per hectare. When we first seized our domains, the production output per hectare was not interesting. As you know, Rwanda lacks large pieces of land, so we must maximize space to compensate. If we are one of the leaders of the sector it is because of our outstanding manufacturing practices.
The second thing we achieved is the augmentation of our industrial blocks. On the one hand, our factories are organized in industrial blocks that belong to us. On the other hand, we rely upon small farmer cooperatives to harvest the tea. The re-structuring of our industrial blocks augmented usable land, and increased production and overall revenue.
As we are experiencing a downturn in commodities, focusing on specialty products, for which buyers are willing to pay a premium for quality, environmentally friendly and origin-specific commodities is key. How is Rwanda Mountain Tea targeting these clients, who are willing to pay an extra dollar for specialty products?
We target these clients by selling not only our products, but also our company. We are, among other things, Rain Forest Alliance certified and ISO certified. Furthermore, we attend product expositions nationally and regionally. These exhibitions are not limited to Rwanda only; you will find Rwanda Mountain Tea in Dubai’s and America’s tea fairs. People know us through this display of quality products. Being on top of technology we also advertise and sell our products via our website. The internet has facilitated information sharing and communication. I can now sell to someone 3,000 kilometers away without even seeing him. We also have newspaper and magazine publications that advertise ourselves.
As a means of increasing the accessibility of Rutsiro teas to American markets, Rutsiro Tea Factory applied in 2015 for a NOP organic certification. You were also winner of two quality prizes at the Gold Medal Tea Competition held in San Antonio, Texas. How important is the American market to RMT and what are your plans to further tap into it?
The USA is the largest market in the world. It has a population of over 315 million inhabitants. A market like this has endless potential and countless opportunities. As a high quality tea producer, we believe that we can sustainably enter into this market. However, entering the American market supposes many difficulties. We are limited by the distance between Rwanda and America. To export tea from Kigali to San Francisco, our product has to travel thousands of kilometers. For example, one of our containers once took over six months to reach the US. The first constraint is definitely transportation. The second constraint is linked to product awareness. America is often quite closed on itself when it comes to product recognition. It is therefore hard for a Rwandan tea company to be top of mind in this market. However, little by little, they will get to know us.
You mentioned that Rwanda Mountain Tea has a need to further advertise its products in the USA while solving its transportation problem. Are we to understand that Rwanda Mountain Tea is looking for alliances or partnerships to solve these issues?
We are businessmen. If there are opportunities of partnering with someone who brings a plus, we are open. In terms of distribution, we are looking for someone who knows the American market. We are especially opened to an alliance with a company present in the USA, at the other end of the chain.
RMT is the leading private investor in tea plantations, tea processing facilities, blending and packaging in Rwanda. As the sector generates more than 50% of the country’s export revenues, and it is expected that agricultural exports increase in average from 19.2% to 28% p.a. by 2018, what are Rwanda’s and RMT’s strategies to increase exports and balance the import bill?
The Rwandese Government is fully aware of the tea market’s potential. By augmenting production and further diversifying our offer we will maintain this positive dynamic. Before, the tea we exported was black CTC (cut-tear-curl) only. Today, we have diversified and we offer organic tea, green tea and for the first time this year, orthodox tea.
Rwanda is known for its black tea, which we sell in Mombasa. In Mombasa, our quality product is mixed and sold in kilos with other brands, cheaper and of lesser taste. We therefore want to diversify and enhance direct selling. This growth will continue because more and more people are starting to know and appreciate us. We are convinced of our potential in the market.
In the future, I believe our main problem will be linked to supplying all of our clients instead of looking for them.
Being one of the country’s leading exports, tea companies are strong ambassadors of the “Made-in-Rwanda” brand. Is Rwanda Mountain Tea selling tea from Rwanda, or is it selling Rwanda in a teacup?
Before, tea sold Rwanda. Today, it is Rwanda that is selling tea. Our country is starting to be known around the world for its quality products and services. Twenty years ago, Rwanda was most famous for the atrocities that occurred. In 2016, Rwanda is known for its spiritual openness, favorable economic environment and flexible investment policies. People are opening to us, as we are opening to them. Our leaders have transformed Rwanda 360 degrees around.
It is the country as a whole that has to be praised for this dynamism, not our products. All the factors for success are united; all we need to do now is to take advantage of them. Now that our country is known and respected internationally, it is our job to make our products bear similar recognition.