Another green revolution brewing?

The Asset December 2011 by Nina Pablo

Undulating green: The sprawling Nirmala Tea Estate is one of five estates acquired by the SariWangi Group in 2002

Indonesian tea company SariWangi Group has a grand vision for tea growing in Indonesia.

A fusion of advanced drip irrigation, wireless sensors and specialized agronomy techniques could increase yields by over 60% while decreasing fertilizer use by 50%, according to Johan Alexander Supit.

The firm’s founder and chief executive officer is confident that the innovation will revolutionize both Indonesia’s agricultural sector as a whole and its growing and promising tea industry in particular.

“With this new technology, our production capacity has gone up from 2,000 kilogrammes [of tea] per hectare per year to 3,000,” Supit says of the system’s effect on the estates in which they have tested it. “Our turnover, which used to be around US$2,500 per hectare, has grown to US$7,500 per hectare.”

The innovative technology has been used in China and Thailand, but has never been applied in Indonesia nor in any tea plantations. So great is it potential, that it has caught the eye of CLSA Capital Partners. Their Clean Resources Asia Growth (CRAG) Fund made an initial investment of US$15 million at the end of July 2011 in SariWangi Group, the largest single investment in sustainable agriculture in Indonesia to date.

CLSA explains that innovations such as these will become increasingly important, as food consumption is expected to double by 2050 and input costs such as fertilizer have increased over 400% in the past ten years. The funds will be used to help grow Nutrigasi Indonesia – SariWangi Group’s agriculture technology solutions company – and expand its core tea business.

Keeping up with the giants

The global (and Indonesian) tea industry has been looking strong the past three to four years, spurred by a greater desire in developed markets for healthy beverages and an increasing purchasing power from emerging economies. Business research group Economist Intelligence Unit found that global demand increased 34.2% from 2005 to 2010.

Prices of black tea, the most commonly consumed tea and the bulk of SariWangi’s business, have risen from US$1.63/kg to US$2.89/kg in the same period. From 2001 to 2010, Indonesian demand has more than doubled from 39,431 tonnes to 87,128 tonnes.

Supit: We have everything here, all we have to do is make them work

However, the late 1990s to the early 2000s were difficult years for the Indonesian tea industry, and its effects are still being felt to this day, according to Supit. “The market was lousy; tea prices [in Indonesia] dropped below cost … SariWangi Group survived because it had a lot of overseas blending and distribution business,” he explains. “In 2007, there was an upturn [followed by continuous growth], but by then a lot of tea estates in the country had been abandoned.”

SariWangi Group has set its sights on these abandoned tea estates, intending to maximize them to meet demand that is suddenly, rapidly outstripping what Indonesia can currently supply. “Instead of opening up new lands – which is time and capital intensive – we can use the new system to increase production at the existing tea plantations. This is what we did, and it really works. Imagine, in 2006 our turnover was 13,500 tonnes. At the end of 2011, it will be up to 42,000 tonnes.”

Sales of SariWangi tea have surged too, from US$31.07 million at the end of 2009 to a forecast of US$85.23 million in 2011 – over 170% growth in just 2 years. Over 70% of their business is overseas, blending and shipping teas to popular brands all over the world (which, due to contract constraints, SariWangi could not name), notably in the the Asia-Pacific, Russia, China, Middle East, Europe and the US.

Such growth, while impressive, is necessary if Indonesia wants to become a major player in the global tea industry. Non-profit research organization the International Tea Committee found that Indonesia produced roughly 140,000 tonnes in 2010, well behind frontrunners such as China (1,350,000 tonnes), India (980,000 tonnes), Kenya (520,000 tonnes), and Sri Lanka (300,000 tonnes).

While the numbers seem daunting, Supit says Indonesia can keep up with these giants, because it still has great untapped resources.

“India and Sri Lanka haven’t got much space left to open up new plantations to keep up with their domestic and overseas buyers’ demands … you see large companies like the ones in India going around in Africa, looking for options to increase their supply of tea. In Indonesia, we have the land, we have everything here, all we have to do is make them work! … Our goal is to make Indonesia [one of the centres] for tea supply in the world.”

One hurdle at a time

Supit has vast ambitions and intends to share this technology with Indonesian manufacturers of coffee and tea. He is aware, however, that such a vision could be difficult to implement, particularly in Indonesia, where a lot of tea estates have fallen into disrepair, where infrastructure and roads are underdeveloped, and regulations are slow in getting approval.

But he has no intention of letting any of that deter him. SariWangi Group has thus far rolled out the new system in some of their estates, with plans to implement it throughout all their plantations within three years.

Government support, or lack thereof, is foremost among the hurdles to this goal, particularly because there is no infrastructure to keep up with the developing estates. “We cannot build the roads; that has to be them. We must have access to the land to do what we are going to do, and we need government support there too.”

He was unwilling to wait for them to take the first step, but hopes that the continued strong performance of and buzz about SariWangi Group’s new system will eventually attract government attention. “We have to start; we’re not waiting for the government to be interested. We are doing what we can.”

“[We are trying hard to push] the efficiency of land and productivity. So much is wasted. Land is wasted. Water is wasted. Everything is wasted. We constantly read in the papers about the low productivity of Indonesian commodities,” he laments. “So I asked my company, ‘Look, why don’t we do it?’ It won’t be a perfect solution, but if we start something and people can see that we have done something successfully, I think a lot of people will start to follow.”

Supit has been offering the technology to smallholders (operators of micro tea plantations) as well, and he hopes the benefits this can offer to them might help get the government’s buy-in. One of his central goals over the next three years is to pass the practice on to smallholders to maximize their lands and production capacity. “There are [so many] smallholders where the productivity is below 800 kg per hectare [making it difficult to be profitable]. We could change that.”

Innovation through the years

SariWangi’s new system may be at its nascent stage, but the group is an old hand at innovating to stay competitive. As a tea group that started in 1962 with operations solely in trading, it has expanded over the years to become one of Indonesia’s industry leaders in blending and manufacturing tea.

Rose garden: A 1.2 ha green house of fresh cut roses – producing 5,000 stems per day – is part of an effort to optimize land usage at tea plantations

At present, SariWangi Group is first in Indonesia in terms of trading with 42,000 tonnes per year (37,000 of which is black tea; the remainder green tea) and it is the largest private company in plantation capacity with a production of 7,000 tonnes per year (though distant from the government’s 35,000 tonnes per year); and it is second only to Unilever in manufacturing with up to 15,000 tea bags a year.

This is a far cry from the group’s considerably humbler beginnings, when Supit, who was trading tea internationally for different companies in the 1960s, decided that he should start building his own trading company with the industry connections he had made over the years.

By the 1970s, however, multinational companies began encroaching on his trading business as the industry boomed, and Supit decided to create a more end-to-end tea company in order to be able to work with these large firms instead of against them.

He explained this as “building something from tea leaf to cup,” a motto that the company still stands by today. SariWangi, in an effort to drive sales up, was responsible for introducing tea bags in the 1980s to Indonesia, which prior to that had only been using loose tea leaves.

Over the next twenty years, several major deals and changes followed, including one in 1987 with industry leader Unilever in which SariWangi Group sold their tea brand to them in exchange for letting SariWangi Group exclusively manufacture it for them, creating a decades-old partnership that has been profitable for both.

SariWangi Group did a lot of trading with Russian and Middle Eastern governments in the 1990s. It was when state buying was banned that they began aggressively acquiring tea estates to be able to create their own brands to sell to the private sector.

The innovative technology and the ambition to turn Indonesia into a centre for tea trade and improve its agricultural industry has become the next step for the SariWangi Group to grow. Supit knows that the road to these achievements is strewn with obstacles, but he is in no hurry to get there. “We cannot do it overnight; Rome was not built in one day,” he asserts. “We have strategic movements to do it step by step.”

Source: The Asset

Tea cultivation

Plant

The tea plant is an evergreen of the Camellia family that is native to China, Tibet and northern India . There are two main varieties of the tea plant. The small leaf variety, known as Camellia sinensis, thrives in the cool, high mountain regions of central China and Japan. The broad leaf variety, known as Camellia assamica, grows best in the moist, tropical climates found in Northeast India and the Szechuan and Yunnan provinces of China. The plant produces dark green, shiny leaves and small, white blossoms.

Tea Plant

There are numerous hybrids that originate from the above two species, which have been developed to suit different conditions

According to an old Chinese saying, "superior tea comes from high mountains". The altitude and mountain mists help shield against too much sunlight and provide the proper temperature and humidity to allow the leaves to develop slowly and remain tender. As with wine, the quality and taste of a particular tea is influenced by both the environment (soil, climate, and altitude) and the tea maker (who decides when and how the leaf is plucked and how it is processed).

Most tea plants have a growth phase and a dormant period, usually during the winter. The leaves are plucked as the new tea shoots (or "flush") emerge. In hotter climates, the plants have several flushes and can be picked year-round. In cooler conditions at higher elevations, there is a distinct harvesting season. Leaves from the earlier flushes, usually in the spring, give the finest quality teas.


There are four main types of tea: green tea, black tea, oolong tea and white tea. All tea comes from the same plant. The specific variety of tea plant and the way the leaves are processed after harvesting determine the type of tea that is created.

Cultivation

T ea grows mainly between the tropic of Cancer and Capricorn, requiring up to 1000-1250mm of rain per year, as well as a temperature ideally between 10 to 30 °C. It will grow from sea level up to 2400 metres.

The tea garden (tea estate) is where the flavour potential of the tea will be generated, and so great care and attention is taken to insure that the best possible growing conditions are created. This means in some cases planting trees to generate shade, or planting wind breaks, to prevent damage from strong winds, particularly on the plains of Assam .

Plants are placed in rows some approximately one metre apart. The bushes must be pruned every four to five years in order to rejuvenate the bush and keeping it at a convenient height for the pluckers to pick the tea from. This is known as the "Plucking Table".

A tea bush may happily produce good tea for 50 – 70 years, but after 50 years the plants yield will reduce. At this time the older bushes will be considered for replacement by younger plants grown on the estates nursery.

Harvest

Plucking rounds depend on climate; new growth can be plucked at 7 - 12 day intervals during the growing season. Tea harvesting is exhaustive and labour intensive (between two and three thousand tea leaves are needed to produce just a kilo of unprocessed tea) and is a procedure of considerable skill.

Tea pluckers, learn to recognise the exact moment at which the flush should be removed. This is important, to ensure the tenderest leaves are plucked to produce the finest teas.

After plucking, leaves are transported to factories for processing. The fields are normally adjacent to the factory.

Tea Growing Region

This article was taken from FOOD INFO. Read the original article

Tea Plant - Cultivation

Cultivation

Young plants are raised from cuttings obtained from a mother bush and they are carefully rooted and cared for in special nurseries until they are 1 to 2 years of age.The mother bush is carefully selected for propagation based on individual properties and yield. The tea plants can then be transplanted out in the tea fields. This process is known as cloning. Tea can also be grown from seed, however, due to the degree of difficulty, cloning is the most widely used method of cultivating tea. Tea bushes are planted from three to four feet apart and planted in rows which follow the natural contour of the landscape. Tea is also grown on specially prepared terraces to help irrigation and to prevent soil erosion.

Pruning and Plucking

When the tea plants reach a height of about one to two feet above ground, it is cut back and pruned to within a few inches off the ground. Trimming back encourages new shoots to form and increases yield. Regular 2 to 3 year pruning cycles encourages a fresh supply of new shoots and further increases yield.

Harvesting fresh young shoots from the mature tea bushes is known as plucking. The location of the leaves relative to the tea bush greatly determines the quality of the finished product. The youngest emerging buds are often reserved for the finest quality teas and are graded as flowery pekoe or more commonly known as tips. The next set of leaves from the end of the growing stem are classified as orange pekoe and pekoe respectively. The older and largest leaves closest to the main stem are called souchong. Although this initial grading during the plucking phase can determine the final product value, it is the handling and manufacturing techniques that will weigh in the most when determining market price at auction.

Harvesting is carried out throughout the growing season and is referred to as the "flush" of a particular tea. The flush of a particular tea is determined at the time of plucking. "First flush" is known as the early spring plucking of new shoots. "Second flush" is harvested from late spring through early summer, yielding teas with more body and fuller flavor. While autumnal flush is the late season harvest. Harvesting is a skilled job traditionally carried out by women and done by hand. Expert care is taken while plucking the shoots. The leaves are carefully pinched and twisted when removed from the tea bush. Handfuls of shoots are then placed into the carrier baskets resting on their backs. After the tea is harvested in the fields, it is brought directly to the tea factory where it is further processed.

This article was taken from IMPERIAL TEA GARDEN. Read the original article

Tea Cultivation

Tea is grown on hillsides. The bushes are severely pruned and plucked to keep them at the correct density, and to encourage the formation of new leaf-bearing shoots which are produced every 7-21 days. These shoots are 'plucked' and put into baskets carried on pickers' backs. Experienced pickers can gather up to 35 kg of leaves each day. It's very arduous work and most employees are still very poorly paid.

The best-tasting teas are considered to be 'loose leaf' and are produced on a single estate without blending. The most popular brands use blended teas from many different tea cultivars for use as loose tea or tea bags. Blends are mixed by experts who grade the tea according to its strength, flavour and colour to produce a consistent taste. Some brands may include around 20 different teas in one blend. Plant variety, the size, age and part of the leaf picked, region of origin and processing method all determine the final appearance and flavour of the tea we drink. Good teas tend to have a bright appearance, while the cheaper the tea the muddier the colour.

The major distinction that is made between the teas we buy refers to their processing method giving us either 'black' or 'green' teas.

Tea is grown on plantations, usually as a single crop. As the plants are perennial, they can remain in production for more than 50 years. The cost of establishing a new tea field is high and it doesn't come into production for several years. Thus replanting is often delayed and fields of 70 to 100 years old are not uncommon.

The modern tea industry only started in India in the second half of the nineteenth century and has been growing slowly since then. Most of it was planted with seed which was virtually unselected, and basic tea practices have not changed significantly over this period.

This article was taken from PLANT CULTURES. Read the original article