Exclusive interview with MET's, General Manager Chuma Velani
Eastern Cape Rising Sun talks with MET's, GM...
What the Winelands are to the Western Cape, the tea estates of Magwa and Majola are to the Eastern Cape, bringing countless possibilities for eco-tourism, job creation and investment.
There is much excitement as one of the provinces greatest assets, Magwa Enterprise Tea (MET) makes positive headlines, showing potential for growth and development.
It is not just a tea leaf that yields some of the best tea in the world, but a company that manages 2025 hectares and 1500 workers, simultaneously proving to be a critical player in the tea and eco-tourism industries.
Promising future plans to its tea estates, it will benefit its most prized asset, the people of South Africa.
Visitors to Lusikisiki, the land of Magwa, on the wild coast, can expect a host of tourist activities including tea tasting, horse riding, plantation tours and viewing one of the areas natural wonders, in its majestic waterfall.
MET's, General Manager, Mr Chuma Velani, shares more in an exclusive interview with Eastern Cape Rising Sun's Managing Director, Nishal Rampersadh.
Q. What are the main future developments at MET?
MET has developed a Masterplan, which is intended to be the focal point of all development initiatives around the Magwa and Majola Tea Estates, for the next 15 years.
The development initiatives will diversify the current focus on tea plantation, to other high-value crops such as macadamia nuts and avocados, while exploiting the tourism potential of the area, through the development of an eco-friendly tourism valley.
Q. Spearheading the MET project, what are your short term and long-term goals/plans for MET?
Short term goal: To increase tea production to 1 400 000 kilograms of tea made, diversify tea products and capture various market segments, while improving profit margins.
Long term goal: To transform MET into a self-sufficient and profitable company, that does not depend on government transfers, but the participation of the private sector in its diversification path.
MET has developed an effective framework to ensure that the company becomes profitable, financially robust, with a focus on sustainable growth, that becomes increasingly attractive to investors, customers and employees.
The framework is structured into major blocks of strategic areas that shape the various initiatives: cost reduction and improved competitiveness; product portfolio; sales strategy; delivery model; growth in new businesses; and, finally, cultural change.
Q. By when can the public expect to see some fruition to these plans? As in actually visiting the tea house, playing golf on the 18 hole course, staying over in a hotel or being able to walk on the glass bridge? We would like to paint a realistic picture for our readers who are curious.
An expression of interest was advertised, inviting prospective investors to finance, design, build, maintain and operate agro-processing and tourism facilities on the tea estates, for a period likely to provide a fair return on investment.
In return, the private investors will meet agreed social, environmental, development, and operating obligations.
Q. Are you happy with the progress made so far at MET?
The tea estates have gone through mixed fortunes since their establishment in the 1960s, However, MET has made incredible progress in terms of improving field and factory operations, product development, and changing a negative narrative that Magwa is volatile and prone to labour unrest.
MET has developed a stakeholder engagement and management plan, to ensure that stakeholders are effectively engaged and involved in the turnaround process of the company. Our workforce is a critical component in successfully operating and managing our tea estate.
Q. Helping with the branding and marketing of MET, we received a phenomenal amount of appreciation for Magwa and Majola. Mostly Eastern Cape, but numbers are increasing in Gauteng, KZN and even abroad. What is your message to these people?
The people across the breadth and length of the country, EmaMpondweni, in particular, have demonstrated real determination and taking the initiative to support attempts of turning around these two tea estates, and they have been doing it with a spirit of collaboration, not competition.
MET appreciates that every person contributed priceless ideas, manpower and expertise; They created an atmosphere in which everyone believes that their opinions are genuinely listened to and valued.
Communities are particularly well placed to unlock creativity in our tea estates, and we’ve seen them do it through optimum participation on the MET social media platforms.
Our workforce, our community, our staff, our management, our human capital remain the most prized assets for Magwa Enterprise Tea SOC. We are committed to progress and creating a highly-skilled workforce, attracting youths and industrialising our operations. At the centre of all of this is our people.
Q. The community is included in Magwas plans. What are some of these plans?
The company has embarked on an extensive process of community engagements with the landowners, through traditional leaders, Communal Property Association (CPAs) and other means, to ensure an inclusive economy in which the direct beneficiaries of the projects, proposed in the Masterplan, own an equity stake in some of the commercial enterprises that would be doing business within the corridor.
In addition to this, the Masterplan proposes the development of a strong and well-developed base of smallholder farmers, who will form the backbone of the agricultural activities taking place with the corridor.
Social facilitation seeks to ensure that beneficiaries of this development are at the centre of all activities proposed in the Masterplan.
Q. Can we expect a quicker turnaround in the production time to fulfil the demand for the product?
There has been a steady rise in the production of made tea over the past 2 years. From 624 tonnes in 2018/19 to 695 tonnes in 2019/20 financial years respectively. The projected crop yield of made tea is expected to hit 1400 tonnes in the 2020/21 harvesting season.
It is never easy to catch up on annual crops that have suffered drought condition, but we did. The recent prolonged rains followed by decent temperatures and strong maintains of our bushes came at the right time.
In real simple terms, all plants require water, light, and some temperature to grow. Unpredictable weather conditions appear to be more frequent than they were 10 years ago.
It is important to focus tightly on competitiveness and efficiency in an increasingly demanding market environment, especially because, for both internal and external reasons, our corporate, commercial and production cost structure had become too heavy for us to compete successfully. The nature of some of our activities calls for a highly flexible cost structure, modernisation, and automation to adapt to our customers’ increasing demands on price and quality.
Q. When talking about investors, is it open to investors from outside South Africa?
This is an open and competitive bidding process inviting prospective investors from across the globe.
Q. What is your advice/call to action for Investors to consider Magwa?
Development intent is on creating a vibrant and enterprising economic corridor, that leverages on the natural endowments of the area, to unlock untapped virgin soils and biodiversity, which will turn the region into a thriving economic hub.
MET’s masterplan, proposes three catalytic anchor projects, which are linked to the agricultural and tourism potential of the area namely;
o The revitalisation and modernisation of the Magwa and Majola Tea Estates.
o The development of an Eco-Tourism valley with areas of natural splendour, which will straddle the two local municipalities linking them through the new N2 gateway.
o Diversifying agricultural output by including New High-Value Commodities and Products through a strong and vibrant smallholder farmer model.
Q. From a marketing video on YouTube, they speak of building townhouses, are these townhouses for the community or private investors?
Housing development project is targeting private investors, commercial banks and development finance institutions (DFIs) to provide finance for the construction of townhouses.
Q. Through the development, job creation should be high and for the benefit of the Lusikisiki people.
Are there any specific roles within ECRDA and MET that you would like to touch on and share with the community that will perhaps direct people’s attention to upskill themselves in preparation for such roles?
It must be noted that agriculture is modernizing fast, and this is evident from its increasing reliance on modern systems of technology development and transfers and innovations.
Tea production continues to be the mainstay in rural employment in the Eastern Mpondoland, and MET is forced to adapt modern technologies, resulting in a wide variety of occupations and skills levels.
The diversity of skills which will be required by MET to be in line to modern technological developments, demands young people to be upskilled.
Given the skills deficit in the region, skills development is important, focusing on all the sectors and subsectors that would be the focus of development.
MET is working closely with TVET colleges, WSU, OTP and other partners in the implementation of skills development programmes, and ensuring that young people with qualifications gain experience through placement in our tea estates.
Q. How have the sales of Magwa Tea been in the last 6 months?
MET has established trading partnerships with retail stores such as Spargs, Spar outlets such as Nicks Foods, Gonubie Superpar, Willowvale, Idutywa Spar, etc.
Magwa Tea is available in 27 stores and Majola Tea in 13 stores in the province.
MET has demonstrated significant improvements in terms of operational efficiencies as well as marketing and sales. These improvements have resulted in product and market diversification, and positioning Magwa brand in the same platform as other competitors in the tea industry, and introducing Magwa Rooibos, has stimulated product demand within local markets.
Q. How long have you been at the helm of MET?
I have overseen MET after the company was discharged from the Business Rescue Process on the 4th of June 2019. Over and above that, I have been involved with Magwa since the establishment of a Project Steering Committee (PSC) in 2014.
Q. Who is the team behind MET that is helping you to spearhead this development and project?
Our management and staff deserve the highest praise for their fortitude and courage in extreme, tense and testing times (Fighting wildfires on the tea bushes, remaining committed and focused during the company financial lack etc). It will be difficult to single out individual names.
MET has assembled a capable team, with a diverse set of skills, determined to transform the company into a world-class tea processor and packer of choice.
In a company that manages 2025 hectares and 1500 workers, simultaneously, it is inevitable that we will occasionally run into execution difficulties or incur unforeseen risks when running estate operations.
But the teamwork, new business model, corporate governance, and the newly implemented control mechanisms, are precisely designed to structurally reduce the company’s risk profile and to drastically mitigate the risk of a failed company.
Q. Have you tried Home Made Lemon or Honey Iced Tea using Magwa?
Honestly speaking, I have not tried Magwa homemade iced tea. Since you are asking me now, I will try it at home.
Q. How would you describe the taste of Magwa and Majola in a few words?
Strong aroma, flavourful and you imagine a world of possibilities in every cup.
Q. Is there anything else you would like to contribute, share or inform the public.
We still have a lot of work ahead for our production systems to evolve towards a more competitive mix, introducing recapitalization, modernisation, and automation levers where possible.
At the same time as we work on reorganization, reconfiguration and structural improvement of our efficiency, we need to leverage the growth potential of the company.
We are also designing a new system, which will enable us to strategically enhance our ability to generate and capture attractive ideas for our new product offerings.
The new system must amplify and reinforce our connection with the technological innovation ecosystems that are spreading across the globe: entrepreneurs, communities and even employees, all of whom can be a valuable source of ideas.
For more information on Magwa and Majola, visit www.magwatea.com