If the honeybush tea project in the Kouga and Koukamma municipalities of the Eastern Cape is successful, it will contrast with that of the Magwa Tea Estate outside Lusikisiki. The troubled tea estate had a turnover of R65 million during its good times and employed as many as 3 500 people.

The cultivation of honeybush tea, which is indigenous to the Cape, could potentially generate R100 million of annual turnover, help create jobs and alleviate poverty, a study commissioned by the Coega Development Corporation (CDC) of the Eastern Cape government suggests.

If the project is successful, it will be a far cry from the Magwa Tea Estate, the largest tea estate in the southern hemisphere, also in the Eastern Cape province, which has gobbled millions of taxpayers’ money without any tangible results but with ample evidence of worker greed and vandalism, and management ineptitude.

Honeybush tea, also known as bush tea, grows naturally in the mountain ranges of the southern Cape and is a sister to rooibos. Rooibos teas are steadily gaining popularity on the international market, particularly in countries such as Japan, Germany and Switzerland.

The popularity enjoyed by these teas is partly driven by the belief that they have curative qualities. The study, on behalf of the Eastern Cape Department of Economic Development, was led by Stephen Hobson, an agricultural economist from Stellenbosch University.

Inputs were made by honeybush industry stakeholders organised by the SA Honeybush Tea Association.

Hobson said that currently 70 percent of Honeybush tea was harvested wild, while only 30 percent was cultivated, a situation that was not sustainable. Furthermore, Hobson said, the cultivated honeybush crop came from fewer than 10 farmers who had managed to establish successful honeybush plantations.

Hobson said: “The industry must reverse this ratio, and work towards cultivating the bulk of the honeybush crop by involving small and emerging farmers. Cultivating honeybush on a larger scale will not only help supply the growing demand for honeybush, but will also relieve the pressure on wild honeybush populations.”

He added: “The industry has the potential to grow from an annual average of 150 tons of tea processed at present, to 1 500 tons, thereby increasing its annual turnover from R10 million to R100m.

“At present, the local and international demand for honeybush (tea) far outstrips the supply, so there is significant room for growth.”

CDC marketing and communications manager Senzeni Ndebele said the parastatal’s role as an implementing agent of the project entailed the formalisation of the industry and ensured economic development in the areas within which the tea existed.

“The honeybush tea in the Eastern Cape grows in Kouga and Koukamma municipalities and these are the areas that will benefit immensely,” she said.

If the project is successful, it will contrast with that of the Magwa Tea Estate outside Lusikisiki, which has on several occasions hovered on the brink of closure, if not closed. Here bad money has been thrown after bad money.

Lusikisiki is a region of high unemployment and the establishment of Magwa by the former Transkei government was one way of tackling this.

In 1975, 1 500 people were employed in Magwa.

Magwa was inherited by the Eastern Cape Department of Agriculture in 1994.

During its rare good times, the tea estate had a turnover of R65m a season, and employed 3 500 people. The 2 500 hectare estate was said to have had the potential to produce more than 3.5 million kilogrammes of good quality tea a year.

In May 2003, the department budgeted R20m for a “turnaround strategy” of the tea estate. In July that year, the workers on the estate, who had not been paid for six months and who were complaining of “years of gross mismanagement”, torched Magwa’s 15 offices, boardroom, computers and financial records.

The estate was reopened in 2004, after MAN Ferrostaal, a German arms manufacturer, became the estate’s financier as an offset obligation in the controversial arms deal.

In November 2006, the company said it had already spent R16m on Magwa and there was another R7m still due.

In the same year, the national government handed over the land around the tea estate to 1 651 households who were beneficiaries of a land claim.

Ferrostaal brought in a Ugandan partner, experienced tea producer Madhvani, which was prepared to take on the project.

Negotiations between Madhvani, Ferrostaal and the Eastern Cape government failed because the government wanted a joint venture between the estate’s nominal owners – the workers – and the foreign partners.

Also at the core of the problem, which led to the exit of the private partners, were “legacies”, such as who took responsibility for the more than R10m in outstanding wages and the repair of derelict equipment.

In February, the estate was shut down when workers, the highest paid in the tea industry, went on the rampage after management refused their demand for a 104 percent increase.

In May, Magwa was again facing ruin after being looted and abandoned by its workers. At that point it was providing jobs and career training for 1 200 permanent workers, as well as 2 300 seasonal workers.

In June, Magwa was officially relocated to the Department of Rural Development and Agrarian Reform, which said the estate would undergo a major overhaul in its operations following the introduction of a new interim board.

MEC Zoleka Capa received applause from the workers, as well as community members from neighbouring villages, when he said R42m would be injected into Magwa, which would be a financial boost for the Pondoland area. - Wiseman Khuzwayo