PESTLE analysis of tea industry in mauritius

POLITICAL ANALYSIS

Tea Sector after Independence in mauritius To better protection the interest of all stakeholders, the Tea Industry Control Ordinance was repeated and replaced by the Tea Industry Control Act 1975. The Act established the Policy Tea Board with undue powers in replacement of the Tea Control Board. Following promilgation of the Tea Industry Control Act 1974-75., the TDA and the metayers on private estates which fell outside the ambit of the ordinance of 1960, were included within the purview of the Tea Board. As a result, the Board started formative green leaf prices for TDA smallholders and metayers. Critical Situation in Late Eighties 1) The apprentice smallholders completed their training programme in the early eighties. It was only in 1984-85, a year noticeable by boom tea prices that they expressed such interest and that it was possible to rent out the tea plantations to them. 2) In July 1987, the Mauritius Tea Factories Co Ltd was instituted to take over the tea manufacturing and marketing activites from the TDA. 3) The TDA's role was controlled to management of smallholders and monitoring of leaf produced by this category of tea planters. Government was at the forefront by subsidizing the public tea manufacture sector heavily to ensure its continued existence. To ensure planters in obtaining a reasonable revenue,a assured green leaf price was introduced Despite the above step taken by Government to improve matters in the tea industry, the situation in the Tea Sector was still dim, largely because of low global prices in 1987-88 and speedy increase in local production costs. The situation did not improve appreciably for the three year that followed.

3 Year Rehabilitation Plan with the support of the Government of India In 1990, try to cure the risky situation in the public tea sector, Government approved a 3-Year Rehabilitation Plan arranged by an Indian Consultancy Team. The rehabilitated plan was implemented as from 1991-92. The primary objective of the plan was together the Government of India and Mauritius. to improve efficiency at all levels .production, manufacturing and marketing and secure the Industrys feasibility and effectiveness.

Agricultural Diversification of Public Tea Sector in mauritius

Attempts to progress the economy of tea industry remained failed. Mauritius could not compete with major tea producing countries such as India, Kenya,and Sri Lanka because in these countries, tea is produced at elevation much higher than Mauritius. As a result, the quality is not equivalent. To protect the employment of tea smallholders, Mauritius government came forward with the projects to diversify tea to other activities like sugarcane. to join in this project,.a package of incentives was forward to the tea planter to encourage him Agricultural diversification in the Public Tea Sector started in February 1996. The project designed at converting some 2,500 hectares (6,000 arpents) of tea into sugar cane and was originally scheduled to end in year 1999-2000. With the supplementary part of 85,000 tonnes of sugar from the Eurorefiners, to accelerate the diversification programme ,Government decided with the help of the five sugar estates involved in the conversion of the tea belts,. The diversification programme was completed in August 1998-99.

The Modern Tea Industry the tea industry moved into a new phase from 1999-2000 marked by the following:

(1) Tea Plantation covered an area of about 761 hectares. (2) Only private tea factories are in operation. These are Bois Cheri, Corson, La Flora and a new factory La Chartreuse that started in January 1999-2000. (3) Tea is mainly manufactured for local use. Imports were effected only where the return was higher than the cost of providing the produce on the market troubled. (4) The guaranteed green price scheme was discontinued. There being no justification for its continued existence in the new phase.

Tradition and Culture Drinking of tea is well anchored in Mauritian tradition. The average consumption of tea in the island is one kilo per head. The average Mauritian drinks black tea. Some Mauritians of Chinese origin consume green tea.

The price of tea is significantly cheaper compared to coffee. Commonly known as the queen of beverages, tea enthralls millions throughout the world. With the increasing awareness of the population to adapt dietary habits that promote health, it is expected that the average Mauritian will continue to drink tea as more and more scientific evidence is being acquired to confirm that

tea is good for health, its consumption can inhibit cancer development and reduce the risk of development of heart diseases.

Future of the Tea Industry in Mauritius At present, Government through the Tea Board protects the local tea industry. In fact the Board, as a general principle, does not allow the import of black tea except minor amount for blending purposes. An importer of tea has to pay for an import licence fee of Rs 5,000/- per consignment for any type of tea imported, an import levy of 17% of CIF value landed Mauritius and a customs duty of 40%. With the general trend of liberalization of World Trade, the future of the local tea industry will depend on how far Government will be successful to protect the local Tea Industry namely to prevent import of tea to the country.

Irrespective of the outcome of what may happened with development at International level, the Tea Board envisages to consolidate the tea industry further. To that end, it is proposed to implement

(1) an infilling programme to improve outputfrom exsting area under tea plantation.

(2) the enhancement of the quality of tea manufactured at tea factories through better control of the standard of green leaf and the manufacturing process. Thus to promote wth a better product.

(3) to develop an adequate marketing strategy for the improved product.

http://www.gov.mu/portal/site/moa?content_id=831f8ee372f60110VgnVCM1000000a04a8c0RC RD Tea Sector: Rs 7 Million Loss The Tea Board (TB), the body charged with guaranteeing the purchase price of tea leaves, goes wrong. The Ministry of Agro Industry has released its calculators to estimate losses from the body broader public since 1975.

Financial projections Tea Board is overwhelming. This parastatal body, which employs ten people, will achieve this year losses of Rs 6.9 million.

As for those for years to come, they are valued at Rs 8.7 million for 2013, Rs 8.4 million for 2014 and Rs 8.6 million for 2015.

To remedy the situation, the Government intends to redeploy staff within the Ministry of Agro Industry.

The TB is currently the only organization of its kind to operate in this sector. It was subsidized by the government until 2010.

From July 2009 to December 2010, the state provided a grant of Rs 5.25 million to TB. But the body no longer receives any government assistance since 2011.

During the past 20 years, tea exports have lost momentum in the high cost of production. In addition, Maurice product quality tea to the average world market.

Thus, the export of tea is no longer profitable. It is for this reason that the government had to subsidize this sector through a 'Green Leaf garanteed Price Scheme' which was implemented in 1987.

The Tea Board in decline since 2008

The plan 'garanteed Green Leaf Price Scheme' guarantees farmers a certain price for the purchase of tea leaves. Farmers also receive financial assistance in the winter when the yield of tea leaves are of poorer quality. They also receive government assistance to purchase fertilizers and a bonus at the end of the year.

Some 1,346 farmers earn their living through the tea plantation. They produce 1,663 tons of black tea for an amount estimated at Rs 285 million. Only 38 tons are exported to France and Reunion worth Rs 9.7 million.

In addition, in 2011, five tons of green tea were imported for local consumption and 23 tons of black tea have been better imported for hotels and for mixing with other components.

This organization currently operates a Tea Fund which manages funds belonging to the board. Sources of funding from government and borrowing by the Board.

The TB for years, had accumulated reserves through the sale of tea leaves of the Experiment Station of Wooton from April 1992 to December 1994. Since 2008, the TB began to make losses. To stay in operation, funds have been drawn from the Tea Fund. Some Rs 8.5 million have been disbursed from the fund to date.

The functions of the Tea board

The Tea Board (TB) is a body granting the permit for the cultivation of tea. It also provides control over the planting, import and export of tea. He also oversees standards relating to picking tea leaves.

In addition, the TB may establish a committee to investigate the closure of a factory producing tea. The Ministry of Agro Industry intends to consult the Office of the Attorney General and Ministry of Finance in relation to the redeployment of staff of this organization.

http://business.mega.mu/2012/06/08/tea-sector-rs-7-million-loss/

The Tea Board Closes The Tea Board, which handles licensing for the cultivation of tea, will cease operations. The reason: loss of balance sheets and projected losses of Rs 6.9 million for 2012. Its employees and its services will be integrated into the Department of Agro-Industry. The Tea Board is in its last days. Indeed, this body will cease its activities to be acquired by the Ministry of Agro - industry, which will integrate employees of parastatal bodies. Procedures for closure have already been engaged and the Tea Industry Control Act of 1975 will be repealed in this light.

This decision by a fairly simple premise: the Tea Board has accumulated deficit balances past four years. According to forecasts of Ministry of Agro-industry, this organization should be in deficit of Rs 6, 9 million in 2012. A figure expected to rise to Rs 8.6 million by 2015 in the current situation.

"This action is consistent with a view to rationalization of parastatals and state to improve the cost-effectiveness, service quality and optimum utilization of human resources," says one to the Ministry of Agro-industry.

The assets and liabilities of the Tea Board will be transferred to service the agricultural ministry. Similarly, the eleven employees that currently the Tea Board will be redeployed within the Department.

The Tea Board has several regulatory functions for the tea industry. His responsibilities include issuing and renewing licenses tea growers in Mauritius. He is responsible for ensuring the import and export of this product. It also has a role as mediator in disputes involving manufacturers of tea.

It is noteworthy that some 1,622 acres of land are currently under tea cultivation in Mauritius and 1,346 farmers are registered with the Board. In 2011, 1,663 tons of black tea were produced for an estimated Rs 285 million. Of these, 38 tonnes were exported mainly to France and Reunion for an amount of Rs 9.7 million.

The Tobacco Board also

There is not that the Tea Board whose days are numbered. Several other parastatal bodies falling under the Ministry of Agro Industry, suffer the same fate. Among the Tobacco Board. It will be dissolved by 2015.

http://business.mega.mu/2012/08/07/tea-board-closes/

ECONOMICAL ANALYSIS Mauritius-Tea

As part of its agricultural diversification efforts, the government supported the large-scale production oftea in the late 1960s. Second to sugar in exports, tea covered 2,870 hectares in 1991. The Tea Development Authority (TDA) owned and managed three-fourths of this land, which it leased to tenant growers. Although tea thrives on the island's higher elevations, production has been hindered by high costs, including labor, and fluctuations in world prices. Since 1986 the government has subsidized tea production to compensate for low prices. In the same year, it established the Mauritius Tea Factories Company to manage four factories that had been run by the TDA.

Tea production reached 8,115 tons in 1985, its highest level, only to decline steadily to 5,918 tons in 1991. Export earnings have declined from MauR104 million in 1986 to MauR83 million in 1991. The government is considering other uses for its teaplanted land in the face of continuing economic pressures.

http://www.mongabay.com/history/mauritius/mauritius-tea.html Data as of August 1994

The Chamber has submitted to the Minister of Agriculture, Food Technology and Natural Resources, Hon. Nandcoomar Bodha and to the Tea Board, a report highlighting the challenges confronting the local tea industry. These concern namely a rising cost of production, and threats resulting from trade liberalisation. In this context, a number of measures have been proposed in order to sustain the development of the industry.

The tea industry in Mauritius has a long history, having been established more than 125 year ago. Tea was until the 1980s, the second largest revenue earner within the agricultural sector, after sugar. Indeed, during that period, exports of black tea averaged 5,000 tonnes, but declined dramatically thereafter following the fall in the international price in 1985. As a result, the exported product became hardly competitive, compared to large tea producing countries.

Some Key Figures of the Local Tea Sector (2002)

Area under tea cultivation: 680 ha

No. of factories in operation: 4 Production of manufactured tea : 1,381 tonnes No. of persons directly or indirectly employed: 2,200 Average annual teal consumption per capita (kilos): Mauritius: 1.1 compared to developed countries (such as UK and Ireland): 2.5 to 3 and to the Middle East: 1.5 to 2.

Since the end of the 1990s, with a view to sustaining the development of the industry, tea manufacturers have embarked in a restructuring and consolidation process, whereby emphasis is laid on the development of innovative products and on the diversification of their activities (agri-tourism, aromatic and medicinal plantations).

Today, only four tea manufacturers, producing solely black tea and selling a wide range of designed packages and flavours under their respective trademarks, supply exclusively the local

market. About 1,300 tonnes of tea is produced annually. A marginal volume (40 tonnes in 2002) comprising value-added tea (tea bags and luxury tins) is exported. Production figures over the last decade have registered a drastic downward trend as a result of the conversion of a significant area of public tea plantations into other agricultural activities.

On the external front, pressures are being exerted for greater trade liberalisation. However, due to its limited resources and to the small size of its domestic market, Mauritius cannot benefit from economies of scale for its agricultural production. Hence, due to the absence of a levelplaying field, the country is likely to suffer the most from competition coming from large agricultural producing countries, in particular its most vulnerable industries, among which the tea industry. In this respect, the Chamber recommends that special measures be taken in order to mitigate the impact of trade liberalisation on this industry.

The Chamber also stresses in the report that, notwithstanding its historical contribution to the development of the island over more than 125 years, the tea sector has still an important role to play in the economic and social development of the country.

http://www.mchagric.org/php/int_main.php?rub=193&langue=

History A French priest, Father Galloys, introduced the tea plant, Camellia Sinensis, to Mauritius in 1760. Pierre Poivre planted it on a large scale in 1770. But, till the advent of the British it remained little more than a museum plant. In the 19th century, Robert Farquhar, Governor of Mauritius, encouraged commercial tea cultivation. He had a tea garden at Le Reduit. Unfortunately, when he left Mauritius, the plantation was abandoned, as no one was interested in his scheme.

70 years later, Sir John Pope Hennessy revived local interest in tea cultivation and consequently tea plantation was started at Nouvelle France and at Chamarel. Plantations were established and by the end of the century, 190 hectares had been planted. Gradually, more people became interested in tea cultivation and there was a net increase in private plantations and new factories were built. By World War II, 850 hectares were under tea, five factories had been established and production for local consumption was in full swing.

In 1948/1949 a Tea Research Station was set up at Wooton.

Major Development In 1955, the Government launched the Tea Smallholding Scheme and the Project Planters Scheme. The aim of the Smallholding project was to establish tea plantations on Crown Lands for eventual long-term leasing at nominal rental rates to smallholders grouped in tea cooperative societies. The Project Planters Scheme aimed at leasing state lands to prospective planters who were agreeable to establish tea plantations at their own costs. Tea villages were established by the Government to encourage the smallholders to live in vicinity of the tea plantations.

The Tea Control Board was established to regulate and control the activities of the expanding Tea Industry, the Tea Industry Control Ordinance 1959 which came in force in February 1960.

To solve the major problem of unemployment prevailing in Mauritius in the late sixties, Government decided to intensify tea development in the super humid zones not suitable for sugar-cane plantation.

The private sector joined forces with government and established Dubreuil Tea Factory in 1967. The factory provided processing facilities for leaf harvested by smallholders.

The Tea Development Authority (TDA) was created to consolidate smallholders scheme on state landsand to develop the scheme geographically in other areas. By 1975, the TDA established 1234 additional hectares of tea plantation. People joined the TDA as trainees to eventually cultivate tea as smallholders. http://www.gov.mu/portal/site/moa?content_id=831f8ee372f60110VgnVCM1000000a04a8c0RC RD

Agricultural Sector: The Tea Production as tea consumption is up this year. Local producers aspire to increase their exports and rely increasingly on varieties of premium tea.

2012 promises to be more auspicious for tea producers. "Production will be very good this year and is expected to increase about 14%. At Charterhouse, we expect to get metric tons of 3,600 green leaves for a production of 700 tonnes of tea, "says Kumar Asvin Bokhoree, 'Managing Director' La Chartreuse Tea Manufacturing. Side of Bois Cheri Tea Factory, production is forecast to 725,000 pounds of cooked tea.

"This increase in production can be attributed to good weather conditions for the production of leaves", it is argued that the Tea Board considers that it is too early at this stage to estimate the total tea production in 2012. You should know that the tea industry is currently in full harvest season which is likely to decline in May. "We reap the tea throughout the year, but harvest decreases considerably during the winter months," says one to Tea Board.

There is, however, that production is increasing, but there is also the consumer. "Every year, consumption rises between 1 and 3%," says Kumar Asvin Bokhoree. Exports also take the ascendancy. "We aim to export more. Currently, our exports to Europe and Reunion are less than 10% of our production. We envision an increase of 5% of our exports, "says Dominique Chelin, 'General Manager' of Bois Cheri. At Charterhouse, we have the same ambitions. "In 2011 we participated in several international fairs. The balance was positive. We are currently preparing contracts. We aim to export more in the region particularly toward Reunion, Madagascar and Africa, "says Asvin Kumar Bokhoree.

But the local market will not be neglected. Producers will launch this year of new varieties of tea. Bois Chri propose, within two months of "ice tea" made from their water source O'Chri. The company currently sells about 27 lines of tea. At Charterhouse, is currently working on six new varieties of tea including herbs with medicinal properties which Tulsi.

"People are looking more and more new flavours. Hence the diversification and the increasing range of our products, "said Kumar Asvin Bokhoree. Chartreuse offers 40 varieties of tea (tea with lemongrass, red fruit, ginger, cardamom, green tea ...) whose instant tea where milk and sugar are already incorporated and where it is not enough that pour hot water.

Innovation and upmarket products leave no doubt that the tea industry has a bright future. Moreover, tea is the second most widely drunk beverage in the world after water.

Prices up in May

Tea will suffer a price increase in May/June. The percentage increase has not yet been determined. The reasons given are the increase in the price of heavy oil, equipment for making tea, flavors, among others. In July 2011, the price of tea had been an increase of about 5 to 6%.

Figures

1596 tons of tea was sold in 2011 against 1451 tons in 2010. Tea production totaled 1,787 tons in 2011. In 2011, 38 tons of tea were exported compared to 35 tons in 2010. Our main markets of export as are France and Reunion. About 700 hectares are under tea cultivation in Mauritius. Tea is grown primarily in New France, Bois Cheri, Grand Bois, La Flora, Dubreuil and Midlands. There are 900 small tea growers, 486 tenants and eight large planters. The industry also has three major producers including Bois Cheri Tea Factory, La Chartreuse Tea Manufacturing and Corson Tea Estate.

Presently there are six active tea estates in Mauritius, the tiny island off the coast of East Africa. A group of four factories (La Pipe, Belle Rive, Dubreuil, Nouvelle France) is operated by the Mauritius Tea Factories Company Ltd (TEAFAC) and produces tea mainly for export. There are also two privately owned factories; Corson, producing mainly for domestic consumption, and Bois Cheri which produces for both the local market and export.

The Mauritius Tea Factories Co. Ltd (TEAFAC) was formed following the government's decision to privatize the manufacturing activities of the Tea Development Authority and make them become profitable. The majority shareholder is the government of Mauritius.

The TEAFAC Estates are now getting a major overhaul under the direction of a team of consultants brought in from India. These experts were hired by TM&MC Pvt. Ltd., an Indian consulting firm owned and operated by Basant Dube. This company is well known in tea production circles around the world for its expertise in all facets of tea growing, manufacturing

and marketing. Their three year mission, which began in mid-1991, is to improve the overall yield and quality of the tea, marketing, and ultimately the profitability.

http://www.highbeam.com/doc/1G1-12728246.html

ENVIRONMENTAL ANALYSIS
Scientific research In May 2004 a research report entitled Polyphenols, Vitamins and Antioxydants in the Mauritian Diet , directed by Dr TheeshanBahorun, associate professor at the University of Mauritius and president of the Food and Agricultural Research Council, established and codified the chemical properties of Mauritian tea, its phenol content and its antioxydant capacity. This study, financed by the Mauritius Research Council, was performed in the domain of horticulture and nutrition at the University of Mauritius in the department of Biological Sciences. It allowed the researchers to establish a link between the antioxydant action of Mauritian teas and their phenolic components. Numerous scientific arguments point to the importance of including fruit, vegetables and drinks such as tea in the diet for better health and the prevention of disease. An excess of free radicals (reactive chemical entities produced by our body), responsible for damage to cells, cause pathological conditions. The list of diseases which involve free radicals, increases all the time: cardiovascular illnesses, diabetes, tissue lesions during transfusion, eye pathology, inflamatory diseases, cancers, AIDS, Alzeimers syndrome, Parkinsons disease. Considering the frequent occurrence of cardiovascular illnesses, diabetes and cancers in Mauritius and the vital role of antioxydants for the optimal functioning of the human body, this study is of utmost importance. It would seem therefore that Mauritian teas, being important sources of antioxydants, have a prophylactic potential on cardiovascular illnesses.In this light, a clinical study is being considered to demonstrate the effect of Mauritian teas on certain stress markers responsible for the development of cardiac pathology.This study will be performed with the collaboration of Dr Sunil Gunness, of the Pamplemousses Cardiac Centre, and the Prof Okezie I. Aruoma, of London South Bank University. http://corsontea.com/?page_id=213