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Ian Wood, oil tycoon and chair of the Wood Foundation gifted majority ownership and UK philanthropists Lord David Sainsbury’s Gatsby Charitable Foundation gifted ownership of Rwanda’s largest tea factory to 5,000 members of several tea cooperatives in Gicumbi, Rwanda.
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Rwanda smallholders supply Mulindi tea factory.
Two UK foundations financed the training of thousands of Rwandan farmers and paid $3.1 million in bonuses to achieve productivity goals. Last year the factory generated $9 million on sales of 4 million kilos of CTC (cut, tear, curl) tea.
As Rwanda privatized its tea sector a decade ago, philanthropist Sir Ian Wood seized a rare opportunity to acquire the country’s largest tea estate.
The Mulindi factory and estate contracted with 5,000 smallholders to supply 60 metric tons of green leaf daily, but the operation was unprofitable. Wood, an oil tycoon and chair of the Wood Foundation in Scotland teamed up with Lord David Sainsbury’s Gatsby Charitable Foundation to finance the acquisition. The foundations immediately awarded 45% of shares to smallholders in several tea cooperatives.
The foundation next established East African Tea Investments to create a plan to gift the remaining 55% shares once the operation became financially stable. Over the years, $15 million was spent on factory improvements, field training for growers, and a marketing opportunity to supply Sainsbury’s foundation as well as skill building in sound accounting and corporate governance practices. The venture invested $3.1 million in bonuses to achieve productivity goals.
Over the decade household earnings improved for growers, and production increased to 130 metric tons daily capacity at the factory. The management team is now proud to call Mulindi their own. Last year the factory generated $9 million on sales of 4 million kilos of CTC (cut, tear, curl) tea.
“It’s been a matter of great pride and satisfaction for Lord [David] Sainsbury and me to work with the tea farmers at Mulindi,” said Wood at a March ceremony in Gicumbi, after meeting Rwanda President Paul Kagame. “It was difficult, to begin with, but the farmers’ performance and income have greatly improved with the investments and significant training programs.”
He wrote that the handover is “a milestone in smallholder farmer empowerment in Rwanda.” The country’s 60,000 small-scale farmers contribute three-quarters of Rwanda’s $93 million annual turnover in tea.
The factory processes 60-80 metric tons of green leaf daily, averaging 1,500 metric tons per month. The average annual gross income of farmers has almost doubled to $2,880 per year.
Wood and his immediate family established the Wood Foundation in 2007 to address economic and societal inequity. Sainsbury established the Gatsby Charitable Foundation in 1967. It has worked in Africa since 1985.