Global Tea

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The proposed investment is a US$8 million senior secured loan to Global Tea & Commodities Ltd. (Global Tea or the Group) comprised of US$4 million each from IFC and the Global Agriculture and Food Security Program (GAFSP) that will help finance the US$19.3 million expansion program of Global Tea in Kenya and Malawi. Global Tea is a family owned agribusiness group with macadamia and coffee plantations in Malawi, as well as a tea sourcing business and tea blending and packing facilities in Kenya. Global Tea has its headquarters in the United Kingdom.The Malawi business is operated under the name of Sable Farming Company Ltd. (Sable Farming), a fully owned subsidiary of Global Tea. Sable Farming consists of two estates: 1)Mapanga estate (located around 10 km from Blantyre on the Zomba Road with a total land area of 748 ha) including macadamia nut plantations (at Mapanga, Chipande and Mikonga divisions), a coffee plantation (at Chipale division with a total land area of 196 ha), a coffee pulpery (at Chipale), a macadamia nut processing facility (at Mikonga), a coffee processing facility (at Chipande), worker housing (at Chipale, Chipande and Mikonga divisions) and a number of other facilities to support the estate operations such as administration blocks, two dams, etc., at various locations within the estate; and 2)Ngapani estate (located around 260 km north-east of the Mapanga estate, adjacent to the border with Mozambique with a total land area of 2,486 ha) including both coffee and macadamia nut plantations, a coffee pulpery, worker housing, a dam, and many other facilities to support the estate operations.In addition to its core business, Sable Farming also owns a dairy farm with milk and yoghurt production facilities located at Mapanga division. Both Mapanga and Ngapani are existing estates set up by the Government of Malawi in the 1970's, prior to the involvement of Global Tea in 2001.Global Tea's Kenyan businesses are operated under the name of Gold Crown Foods (EPZ) Ltd and Gold Crown Beverages Kenya Ltd. (collectively called Gold Crown). Gold Crown consists of two tea blending and packing facilities in Mombasa, Kenya one processing tea for the domestic market and the other for the export market. In addition to the above, Global Tea has sourcing operations in Kenya under the name of Global Tea and Commodities (Kenya) Ltd., procuring ~53,500 MT of tea per year.The proposed IFC/ GAFSP investment will support Global Tea's capacity expansion in Malawi and Kenya. This will cover:1)Under Sable Farming, Malawi, planting an additional 600 ha of macadamia trees across Ngapani and Mapanga estates; and, replanting 300 ha of the existing 600 ha of coffee plants across Ngapani, Chipale and Mapanga plantations. These activities will take place over the next five years to 2022. IFC will be financing the expenditure over the next 3 years (2018-20), which would lead to a new plantation of 347 ha of Macadamia and a replantation of 97.6 ha of coffee. All these activities will take place within the existing land areas of Ngapani and Mapanga estates. No new land will be acquired. 2)Under Gold Crown, relocating the existing two tea warehousing, blending and packing facilities currently located near the Port of Mombasa, to a larger four (4) ha site consolidated under one roof, within Mombasa, Kenya. Although two location options have been identified, the choice of site has yet to be decided. The move to a larger site will help to increase utilization due to improved efficiency, while also allowing Gold Crown to run 2-3 shifts per day. In addition to and separate from the proposed investment, the IFC's Energy and Water Advisory is looking to support Sable Farming to develop a solar power energy solution to source 50%+ of total power for both current and future demand, from a renewable source. The renewable energy solution will make the estates climate smart while providing a stable source of energy. Furthermore, IFC and GAFSP are looking to support Sable Farming in initiating a coffee smallholder program covering 3,300 farmers across the following areas in Malawi: Misuku (3,000), Tsangano (100) and Ntchisi (200).