The Eastern Cape Development Corporation (ECDC), who has been tasked to find a strategic partner for the Magwa Corporation, South Africa’s largest producer of a high quality tea bush, says it is in negotiation with two potential investors and that these negotiations may be concluded within two months.

After meeting with Agricultural MEC Max Mamase and Economic Affairs, Environment and Tourism MEC Andre de Wet late last week, the Eastern Cape government confirmed that the ECDC, the province’s development agency, would be the lead negotiator in the Magwa negotiations.

ECDC CEO Mcebisi Jonas explains that the corporation’s priority is to find the best investment solution and partner for the 44-year old tea estate – one who would return the estate to profitability and ensure its longevity.

“There is no intention to sell Magwa. Considering its importance in this area, we believe that an investment of R50 million and the appointment of a new management team will transform Magwa into a thriving, profitable business within two years, thus preserving many jobs in the region,” says Jonas.

Ownership of the 2500 hectare plantation, which is 10 kilometres from Lusikisiki in the Wild Coast district of the Eastern Cape, was transferred to the Magwa Workers Trust, along with a 99-year lease; of which 33 years remain.

“Finding the right solution is imperative, considering the importance and the nature of the project in area which is seriously depressed and has little economic activity. By effecting the right strategy, we believe that we will be able to revive the inherent potential of the plantation. Its success will also have a major positive effect on the area by stimulating economic activity and protecting jobs,” says Agricultural MEC Max Mamase.

Mamase says the ideal partner for the estate is one which has an established track record and which will be able help the plantation address its key challenges.

“We see the estate’s key challenges as access to markets, transfer of further skills to workers, providing management capacity and, injecting capital into the venture for new technologies, amongst others, and maximising the resultant benefits. It is also critical for the new partner to see the estate as something bigger than just a tea estate and have a real understanding of the role of the estate in the minds of its owners and the community in which it operates,” adds Jonas.

De Wet reiterates that it is critical to find a partner that would seize this opportunity enthusiastically and be committed to a true partnership with its current owner workers.

“The solution which has been put on the table consists of two phases – an interim management phase which will ensure the rehabilitation of Magwa as well as define its repositioning. We expect that this phase will need a R20-R30 million capital injection. The second phase – the investment phase – will see the new partner take over the management of the estate and run it profitability in partnership with the current owners,” ends Jonas.

Cosatu’s Provincial Secretary, Zola Pakati says they have been consulted throughout the process and it supports the approach.