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INVESTIGATION OF ECONOMIC VIABILITY OF VALUE ADDING AT TSHIVHASE-MUKUMBANI TEA ESTATE

Khathutshelo A Tshikolomo, Azwihangwisi E Nesamvuni, Ndivhudzannyi S Mpandeli

Abstract


ABSTRACT

 

The study was carried out to analyse production of value added tea and economic viability of the value adding  initiative adopted in 2009 to resuscitate Tshivhase-Mukumbani Tea Estate. Strategies were identified for achieving economic viability of the value adding initiative. Assessment of economic viability of the value adding initiative was based on Net Present Value (NPC) and the Benefit Cost Ratio (BCR) calculated from time series data obtained for the period 2005-2012. The quantity of value added tea produced varied across years, geographical locations and seasons with production higher for wetter seasons. The NPV was consistently negative while the BCR was below unity throughout the study period, implying that the value adding initiative was economically not feasible. Major initiatives for achieving economic feasibility of the value adding initiatives were (1) increasing production of value added tea, (2) increasing the unit price of sold tea, and (3) reducing costs of production and value adding activities.

 


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DOI: http://dx.doi.org/10.1000/ijsmr.v2i6.91

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