Magwa Tea Estate’s transformation is firmly on track with the first phase having been completed says the Eastern Cape Development Corporation (ECDC).

The transformation follows the signing by ECDC of India’s third largest tea company JV Gokul as the estate’s technical partners to make the business investor-ready.

“JV Gokul’s progress has been nothing short of remarkable,” says ECDC acting CEO Kevin Wakeford who says the company has taken the 1800 hectare plantation from producing no tea to harvesting a remarkable 1,2 million kg of tea. This is the first time, in over three years, that three grades of tea will be harvested at the plantation.

Harvesting started in November and production is expected to peak this month. Initial production estimates have been revised up by a healthy 20 per cent.

JV Gokul CEO Nakul Jagjivan who visited the Eastern Cape last week says “the plans were going faster than planned” despite the process of compromise with creditors having taken longer than expected. This process was concluded in January this year.

Jagjivan attributes the success of Magwa turnaround to a “better approach” to managing the plantation and “a great team effort” on the part of the project’s partners.

He says he is satisfied that Gokul’s approach has made Magwa more viable because the plantation has been able to capitalise on the team’s experience in tea industry.

“However, what has been equally important is the cooperation and support for the project from other stakeholders. We couldn’t have done this without the support of our project partners, ECDC and Ferrostaal, who have been integral to ensuring the deal became a reality and remained on track. The Eastern Cape Provincial Government has also been invaluable to the project. The Department of Trade and Industry has been great in ensuring the future of the project,” says Jagjivan.

In addition, Jagjivan thanked Magwa’s more than 1200 permanent and casual employees and the Land Claims Commission whose input has been vital since large areas in and around Magwa are communal land.

Wakeford says the commitment shown by JV Gokul’s team has been unprecedented who took it upon themselves to substantially reduce the benefits normally accorded to management companies.

“Magwa could not have wished for a better foreign partner since they have extensive knowledge in tea marketing and we are already seeing these rewards,” says Wakeford.

In the second phase of the project, ECDC expects to finalise the details of the company which will own Magwa in the future. Participants will include JV Gokal, Ferrostaal and other local partners such as the workers’ trust and land claimants.

JV Gokal remain confident on Magwa and, in partnership with Ferrostaal, are expected to invest over R35 million in the plantation and tea factory. This is, despite, the tough times facing the tea industry in South Africa, due to cheaper imports from SADC countries such as Malawi.

In the long term, Magwa is expected to produce in excess of four million kilograms of tea per annum and employ over 3000 people. These estimates do not include the Agri-Tourism spin offs which are in the planning phase.

JV Gokal is also to give their recommendations on making the Port St John’s Majola Tea plantation sustainable.

Caption: Eastern Cape premier Nosimo Balindlela receives acelebratory tin of Magwa Tea by Economic Affairs MEC Andre de Wet. The tea is the first to be harvested at the plantation in three years.