Tea Co, a tea growing and manufacturing company, is offering for sale three tea estates together with a factory at a price of $10mn.
Value of Land and Buildings: ~$650,000
Total land is 825 Hectares of both planted and virgin land.
A modern factory and includes a fully equipped workshop. All the machines were acquired within the last 10 years.
- Average monthly production of tea is 160,000kg.
- Average Yield per ha is 3,800kg.
Employees: 60 permanent employees.
- TEA Co. tea sales grew from $2.2mn in 2010 to $3.4mn in 2013, achieving a CAGR of 16.3% over the last 4 years.
- Over the period, the company's EBIT grew at a CAGR of 24.8%. EBIT grew from $1mn in 2010 to $1.9mn in 2013.
- The growth was largely driven by improvement in production yield per hectare and cost control. Tea production grew from 1.75 mn kg in 2010 to 1.95 mn kg in 2013.
- Attractive global tea prices: The price of tea in the international market has been rising since 2011, driven by strong demand from the traditional tea consuming countries.
- Growing world demand for tea in the traditional markets
- High yields per Hectare: Some of the TEA Co. estates achieved some of the highest yields per hectare in Uganda of about 3,800 Kg per ha. Average yield in most Ugandan estates is between 2,800 and 3,000 Kg per ha. Kenya average yields are between 5,000 and 8,000Kg per ha.
- Lower cost of wages: Compared to its East African peers, wages in Uganda are much lower and indeed are the lowest in any tea-producing country in the world.