Tanganda bets on value to turn the corner

STAFF WRITER
Tanganda Tea Company Limited is betting on value addition, stronger market penetration and sharper operational efficiency to turn the business around after a 28% drop in bulk tea production in the nine months to June 30, 2026.
The listed tea producer said the operating environment remained relatively stable in the third quarter, but weather-related risks and subdued demand in some key export markets continued to weigh on performance.
Bulk tea production declined 28% from the comparative period after management suspended out-of-season plucking when yields fell below economically viable levels.
While the decision hit near-term volumes, it enabled Tanganda to undertake comprehensive maintenance across its processing facilities ahead of the new tea season.
“While this affected reported production volumes, the initiative is expected to support factory throughput and product quality in future seasons,” chairman Addington Chinake said in a trading update.
The decision, he said, reflected management’s focus on preserving the company’s long-term productive capacity rather than pursuing volumes at uneconomic returns.
The strategy is already gaining traction in higher-value segments.
Despite the decline in bulk tea output, export sales volumes rose 9%, supported by stocks carried forward from the previous year. Packed tea sales surged 145%, buoyed by sustained demand for Tanganda’s core brands and stronger route-to-market initiatives.
“The company will continue strengthening domestic and regional distribution partnerships while improving market coverage as the beverage business remains an important avenue for growing revenue and generating more value from its agricultural base,” Chinake said.
Horticulture delivered a mixed performance.
Macadamia production fell 5%, while export sales volumes plunged 45% as subdued international demand compounded a persistent supply-demand imbalance in the nut-in-shell market.
Tanganda is seeking to offset the pressure through greater value addition and market diversification, reducing its dependence on the traditional nut-in-shell market.
Avocados emerged as a bright spot, with production jumping 95% year-on-year as the company’s orchards continued to mature.
The larger crop is supporting Tanganda’s avocado oil extraction venture with Netherlands-based Trade Link Global BV.
The plant, which started operations in May 2025, is enabling the company to extract greater value from its fruit while reducing losses associated with lower-grade produce.
Tanganda’s recovery strategy is being underpinned by fresh capital.
Earlier this year, the company raised US$8 million through a renounceable rights offer to ease working capital pressures and fund investment in plant, infrastructure and operational capacity.
The proceeds are being channelled towards working capital, supplier obligations, replacement of the Tingamira water bottling plant, infrastructure refurbishment and grid-tying solar installations at the Ratelshoek, Jersey and Tingamira estates.
The rights issue also reshaped Tanganda’s shareholder base, with Innscor Africa subsidiary Rutanhi Beverages Limited underwriting the offer and subsequently acquiring a 27% stake in the company.