McLeod Russel gets into 'Darjeeling of Africa'

Borelli Tea Holdings Ltd, a wholly-owned subsidiary of McLeod Russel India Ltd, has signed a shareholders’ agreement to acquire a 75 per cent stake in Olyana Holdings LLC, an American limited liability company.

The move gives it the Gisovu Tea Company in central Africa’s Rwanda. Said Aditya Khaitan, managing director, McLeod Russel: “It was a natural extension for us. All our buyers of Assam Tea are also buyers of Gisovu. Rwanda happens to be the Darjeeling of Africa.”

Olyana had earlier signed a share sale agreement with the government of Rwanda for the acquisition of 60 per cent shares in Gisovu Tea. Gisovu has a tea processing factory producing around 1.7 million kg of tea.

Khaitan said, in terms of volume the acquisition was not large, but it had the potential to go up to 2 million kg. The world’s largest bulk tea company, McLeod currently produces around 80 million kg.

“We also have an agreement with the government of Rwanda for 1,000 hectares where planting has already started. In the next four to five years, we will have five million kg from Rwanda,” said Khaitan. The shares have been acquired by McLeod for $2.75 million.

Olyana’s acquisition of the controlling stake in Gisovu was on a long-term basis, with the objective of developing its plantation, manufacturing and marketing activities, to make it globally competitive with support from the government of Rwanda.

Olyana will implement the Gisovu business plan as envisaged in the share sale agreement and will explore possibilities of processing and marketing of teas of Gisovu by value addition.

There are also earlier agreements between Olyana and the government of Rwanda on development of the tea factory there and of industrial estates.