Eastern Cape Rural Development and Agrarian Reform MEC, Nonkqubela Pieters, has expressed confidence that Magwa-Majola Tea Estates in Lusikisiki and Port St Johns will reach break-even point and reduce their reliance on government bailouts by 2024.
She made the remarks after having led the harvesting of 1 443 hectares of tea and touring the Magwa processing factory on November 16.
Peters said government was on course in the turnaround process of the enterprise.
“Government is not throwing away money by investing here; we have created employment opportunities in an economically depressed region. Through this development, Magwa has created sustainable livelihoods, supporting multitudes of families. Indeed, we are making inroads though we are not yet where we want it to be,” she said.
“By 2024, the enterprises will break even, and will be sustainable. The main objective of the turnaround is repositioning the Magwa-Majola development corridor within Lusikisiki and Port St Johns area as a thriving sub-local economic hub in the Wild Coast region,” Peters added.
The tea estates have diversified their products and markets, and this product and the market diversification, have positioned the Magwa brand in the same platform as its competitors and introducing Magwa Rooibos stimulated product demand within local markets.
Magwa and Majola Tea, made in black and rooibos varieties, are available in more than 50 retail stores in the Eastern Cape and KwaZulu-Natal.
Over and above this diversification, conglomerates such as Unilever, Joekels and National Brands buy tea in bulk from Magwa and Majola.
The Eastern Cape government approved the procurement of locally produced tea so that government departments, municipalities and public entities buy it.
Peters said the procurement of locally produced tea products is critical in improving Magwa and Majola profit margins, reducing overreliance on the provincial fiscus and stabilising the socio-economic outlook of the Ingquza Hill and Port St Johns local municipalities.
To this end, the tea enterprises have created employment opportunities totalling 957 employees (481 permanent and 476 seasonal workers, predominantly women and young people).
Majola Tea Estate general manager, Chuma Velani, revealed that the estate had been awarded an organic tea certificate by ECOCERT (an international certification body), which will open doors for niche and export markets for Majola Tea.
“In line with the strategic direction of achieving the highest level of sustainability, Magwa Tea Enterprise has achieved the pinnacle of environmental sustainability by reaching ‘sustainable agriculture’ status certified for product and farms,” he said.
“Being one of the leaders in the tea market over the years, Magwa has embarked on an aggressive path in its marketing approach to ensure an advantage over its competitors as a single origin product,” Velani added.
He said they expected the tea estates to employ about 2 500 employees while other value crops and tourism planned might take the employment numbers to 5 000 by 2024.
