The Hindu Business Line : Kanan Devan to cultivate tea in Ethiopia

Taking off
A four-member team from KDHP zeroed in on 10,000 hectares of land in the South Western Oromiya District.
The land, given on 90-year lease, will command a very nominal

C.J. Punnathara

Munnar, Aug. 24 Kanan Devan Hills Plantations (KDHP) company is to invest Rs 375 crore in Ethiopia to raise 10,000 hectares of tea plantations in the traditional coffee country. While the new project would have a 70:30 debt equity ratio, some foreign private equity companies have shown keenness to participate in the venture.

The participation of Tata Tea, which already holds 20 per cent equity in KDHP, would be sought for the new project.

The debt component would be raised from Ethiopian banks which have shown keenness for the project, Mr T.V. Alexander, Managing Director of KDHP, told Business Line.

Project evolution

The project was initiated after the Ambassador from Ethiopia to India visited the tea plantations of KDHP in Munnar, which are among the largest participatory management projects in the world, and asked company officials to explore the possibilities of setting up a similar project in Ethiopia.

A four-member team from KDHP surveyed several potential sites before zeroing in on 10,000 hectares of land in the South Western Oromiya District of Ethiopia.

Job opportunities

“We interacted with the Deputy Prime Minister, the Department of Agriculture and several banks, who have shown unstinted support for the project,” Mr Alexander said.

The aerial survey of the land had been completed and reached KDHP just couple of days back, along with queries on the employment and economic generation potential of the project. Mr Alexander said the project would create direct employment for close to 10,000 people and accelerate export and economic development of the region.

The land, which is given on 90-year lease, will command a very nominal rent.

Nominal rent

“The high elevation land is ideally suited for tea cultivation and for water there is a river running through it,” Mr Abraham said.

With the nominal rent and low cost of labour, the project should be able to produce 25 million kg of high quality CTC and orthodox teas in 10 years.

Indian training

Since the country has no history of tea plantations, workers from India will train Ethiopian workers. The suitability of the land is testified to by the proximity to Kenya and Tanzania, which are traditional tea growing countries.

The company is in the process of preparing a detailed project report, which should be ready in a fortnight and the project should be on rails by end-October/early-November, Mr Abraham said.

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