Inclusive Business Model Analysis: Ikanga Tea Factory, Tanzania

Ikanga Tea Company Limited (Ikanga) is located in Southern highlands of Tanzania in Njombe region. The Company is a subsidiary company of the DL Group, who purchased it from Rift Valley Corporation in 2017. Its primary operations is processing of green leaf into made tea.

It currently sources 100% of green leaf from smallholder farmers spread across 20 villages in Lupembe ward with a total area of planted tea of 1,387.15ha. This encompasses 6,147 registered farmers.

This SDM seeks to answer the question: How can Ikanga improve livelihoods of smallholders it sources from in order to sustainably secure consistent quality and quantity of green leaf tea supply?

To improve its operational performance, Ikanga requires it to: i) secure affordable and sufficient working capital and capex financing; ii) strengthen management capacity and professionalize service provision; and iii) support the development of professionally-run cooperatives.

This study reveals that with a worsening financial position (given current and forecast losses), Ikanga may find it more difficult to attract external or commercial funding. For Ikanga to be able to attract commercial funding, it would first need to turn around its performance. Therefore, a business process improvement plan is highly recommended.