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11 - Public Disclosure Authorized Agro -Industry Profiles Public Disclosure Authorized

...... - .I PROFILES IN THIS SERIES:

OILCROPS - OVERVIEW...... FAU-01

OIL SEEDS...... FAU-02

OIL PALM.....e . o.. . ee* n *@FAU-03

COCONUT. e.e...... e o e.. ... FAU-04

SUGAR.e .e * .e ,e ee .* D. e e. e e o *e FAU-05

ETHANOLn . . . . . e . e . e e ...... e e ..FAU-06

WHEAT. . e o. * oe oe o o e...... e .eeFAU-07

RICE.. o oe de . * * * **o. * o.e .9 .eFAU-08

CORN . . . . oe . s e .e . . s. . e o. . . . e . FAU-09

CASSAVA . . .e *...... e o . eFAU-10

ANIMAL FEEDS ...... eFAU-11

FRUITS AND VEGETABLES...... e FAU-12

RUBBER. e . e...... e . .e * . .o e. eFAU-13

COFFEE. e e e e . e s .e .. s e. e o oe o e e **FAU-14

TEA. @*e¢e ¢ X e X @eeo.oo oes v@ @ee oee eFAU-15

COCOA. e .e e * . e. . . e . e . e . e e . .*e. .FAU-16

COTTON. * *Q * * e . eo . o . * . . . o e * e 6 .FAU-17

MEATe e ANDeo ESETAeeeo* e oL eFAU-18

SPICES AND ESSENTIAL OILS .. e...eFAU-19 ABSTRACT The objective of this Profile is to provide a review of the tea processing industry. It examines all aspects of the tea industry, from the production and processing of the raw material to the marketing of the finished product. It contains yield specifications and conversion rates, a glossary of key words, and a bibliography of useful references. The Profile discusses various processing procedures, including withering and , and distinguishes the different processes used in black, , green, and instant tea production. Marketing aspects such as quality control, storage, market barriers, and prices are addressed, as are the criteria for factory location. An Annex containing examples of operating and investment costs is included at the end of the Profile, along with Metric/US convers ion tables. FOREWORD The nature of project and sector work in the World Bank is such that staff are often called upon to work outside their major fields of specialization, if only to make an initial judgement on the utility of further, often costly, investigation. Under these circumstances, up-to-date and authoritative reference material is essential. The profiles in this series are designed for use by operational staff with experience in the agricultural sector but who do not have a technical knowledge of the particular commodity under discussion. Their purpose is not to substitute for technical expertise but to provide a reliable inhouse reference which will help Bank staff to determine when and what expertise is needed in the detailee evaluation of investment proposals in agro- processing.

The conditions for any particu.lar proposal are bound to be unique in a number of respects, and the use of norms and general data in project analyses could give rise to significant errors. On the other hand, by providing responsible staff with a guide to the issues on which appropriate expertise should be sought, these profiles can contribute to the overall quality of agro processing investment. Used with care, they should also.facilitate broad pre-screening such as may occur during sector work and reconnaissance. Questions, comments and further inquiries should be addressed to: Agro-Industries Adviser Finance and Agro Industry Unit Agriculture and Rural Development Department

The contribution of Harrisons Fleming Advisory Services, Ltd. in the review of this profile is gratefully acknowledged.

September 1985 Tea

CONTENTS

DATA SHEET......

INTRODUCTION ...... 1

GLOSSARY ...... 1

RAW MATERIALS...... 3

PROCESSING ...... 5

MARKETING ASPECTS...... 14

OTHER FACTORS...... 16

BIBLIOGRAPHY...... 18

ANNEX I EXAMPLES OF INVESTMENT AND OPERATING COSTS

ANNEX II CONVERSION TABLES (METRIC/US) Tea

DATA SHEET

The average yield of made from principal sources is about 1,000 kg/ha/yr, a1thour..-. yields of up to 3,000 kg can be achieved on well-managed estates. Yields are influenced primarily by climate, altitude, cultivation &.nd harvest practices and growing conditionis, including latitude and the number of daylight hours.

100 kg fresh green leaf produces approximately 45 to 70 kg withered tea, depending on conditions and requirements. 100 kg fresh green leaf produces approximately 18 to 27 kg made black tea, depending on the process and other factors.

100 kg withered leaf produces approximately 32 kg to 45 kgs made black tea.

i INTRODUCTION

Tea is classified as: fermented; partially fermented; or unfermented. The produced in these classifications are: black tea, oolong tea, and respectively. Black tea is the most important of the three and accounts for about 75% of world tea production and over 90% of international tea trade.

This Profile can be supplemented with more detailed information in Tea Processing by J. Werkhoven, FAQ (1974).

GLOS SARY

Black Tea ; leaves are withered, distorted, fermented and dried.

Blending Mixing of teas to satisfy market demands.

CTC Crushing, Tearing, Curling; machine used for leaf distortion.

Fermentation Development of flavor, aroma and color in black or oolong tea by permitting enzymatic oxidation under controlled conditions.

Firing Drying to check fermentation.

Flush Seasonal growth periods in the tea plant.

Green Tea Unfermented tea; leaves are steamed, rolled and dried.

Instant Tea Liquor from either black made tea or green leaf is dried to produce water-soluble particles.

Leaf Distortion Rolling, crushing, tearing or otherwise breaking the leaves; fluids are released which begin fermentation.

Liquor Brewed tea.

Made Tea Black tea after the firing process has been completed.

1. Oolong Tea Partially fermented tea; leaves are withered, fermented and steamed.

Packet Tea Loose tea in small retail-sized packages. Plucking Harvesting of the leaf. Rolling Traditional technique for leaf distortion. Soluble Tea Instant tea.

Tea Bags Individual sachets of tea for retailing. Withering Preliminary drying of fresh leaf; first stage. of black and oolong tea manufacture.

RAW MATERIALS

Tea (Camelia assamica or Camelia sinensis) is grown in tropical and subtropical regions. Although usually grown on large estates, it is also cultivated on small farms. The tea plant starts to yield usable leaf two to three years after planting, reaching full producticn after seven to ten years. Yields of made tea vary depending on climate, variety and cultivation practices. The average is just over 1000 kg/ha, but some yields reach as high as 3000 kg/ha.

The quality of tea produced is closely linked to growing conditions and cultivation practices. Quality of tea depends on the nature and chemical composition of the plucked leaf. The characteristics of the leaf vary according to the plant's growth patterns and growing conditions as well as cultivation and harvesting practices.

Although tea is harvested or 'plucked' year-round, its growth pattern is characterized by distinct seasons when shoots develop at higher latitudes. These seasonal changes in the plant affect the internal composition, size and fineness of the leaf, and subsequently the quality of the end product. From a processing viewpoint this pattern determines the harvesting frequency. These patterns are affected by temperature, humidity, and rainfall.

2 The most important cultivation practices affecting tea growth and yield are pruning, plucking, and use of fertilizers. Different pruning cycles are practiced and are largely dependent on tradition and local situations. Plucking itself is a form of pruning and great skill and care is required to ensure that the plant remains productive. Other significant factors are shade and pest/disease control.

Plucking

As noted above, plucking is one of the most critical operations in tea production. It helps to determine the quality of the final product and has a significant effect on the growth of the plant. Plucking is usually by hand, although various mechanical devices are used in some areas.

Traditionally, higher quality tea is produced from 'fine' plucking of 'two leaves and a bud'. To obtain higher yields (more leaves processed)-, 'coarse' plucking of up to five or six leaves and a bud is employed. Although production will increase, quality will decrease and, if practiced continuously the plant's growth will slow down. Mechanical harvesting also results in 'coarse' plucking. The fineness of the plucking system should be linked to processing requirements. In some high altitude areas where leaves are produced with inherently high quality, fine plucking is essential, in other areas where the quality is lower anyway, a coarser pluck may be employed. In general, fine plucking will produce 'blacker' tea, good liquoring characteristics. and a higher percentage of better grades in the finished product. Tea bushes are usually plucked once every one to two weeks depending on the season. Plucking in the morning often produces better quality leaf than evening plucking. Once the leaf is plucked it should be taken to the factory for further processing as quickly as possible so that bacterial attack and leaf deterioration can be reduced. Uncontrolled fermentation due to bruising, and overheating result from poor handling. Clean leaves waiting for processing should be kept in the shade and away from heat.

3 PROCESSING

Introduction

The main purpose of tea processing is to allow chemical changes to take place within the tea leaf. Because of this, the processing itself does not involve complicated machinery or sophisticated technology. It is, however, time-,space-, and usually labor-intensive. Developments in mechanization are mainly concerned with limiting the amount of space, and in some cases labor, needed. Because of the long-standing traditions of tea consumption, the major aim of processors is to achieve consistent levels of quality and appearance. Recent changes in consumer habits have led, however, to the elimination of some processing steps in the production of some tea products, e.g. tea bags and instant tea.

The fundamental process in black tea manufacture is enzymatic fermentation of polyphenols within the leaf. Different processes prepare the leaf, establish optimum conditions for fermentation, and end the process when it has gone far enough.

Flowchart 1 provides an overview of tea processing. The main operations involve: withering, or moisture reduction of the leaves; leaf distortion (rolling, chopping or cutting); leaf fermentation; leaf drying; grading and blending of made tea; packaging; and instant tea manufacture.

Oolong and green tea processing systems are relatively standard. However, variations are more common in black tea processing. Orthodox black tea production involves withering, rolling, fermentation, and firing of freshly picked leaves. More modern mechanical systems differ in the early operations. Instead of simply rolling the leaves, machines for crushing, cutting and curling the leaves are employed.

4 Plucking

Withering Withering Steaming

Leaf Distortion Fermentation Rolling and/or Rolling I

I Firing/Drying Fermentation I

- - Steaming Firing/Drying Firing/Drying I i

(Blakk Tea) (Oolong Tea) (Green Tea)

Grading

Stalk/Fiber Extraction I' < -> I, For Export Domestic Processing l> -- l -< I

Cleaning

(Packing)

Blending

(Wholesaler)

Packaging

(Instant Tea) (Packet Tea) (Tea Bags)

Flowchart 1: Tea Processing Withering

The object of withering is to both reduce the moisture content of the fresh leaves by 30-50%, and to prepare or condition the leaves for further processing. Physical and chemical changes in the leaves occur during the withering process which influence the later processing and the quality of the tea produced. The main changes in the leaves include: loss of moisture; increase in free amino acids (aroma precuirsors); increase in ; and increase in carbohydrates which contribute to taste and aroma. Insufficient attention to withering will create problems in rolling and drying and will affect the character of the tea produced. The degree of wither is dependent on the type of tea to be produced and the method of manufacture. It determines the duration of withering and the percentage of moisture left in the leaves. Orthodox processing usually requires a 'harder' wither which reduces the moisture content to around 55%, whereas more modern mechanical processes only require withering to about 70% moisture content. Traditional techniques utilize racks and trays on which the leaves are thinly spread. Movement of air, either naturally or by fans both dehydrates the leaves and carries away the moisture. The duration of withering ranges from 18 to 24 hours depending on the degree of wither required and ambient conditions. Natural withering relying on the elements tends to be slow, inefficient and difficult to control. Newer methods include drum, trough, and tunnel withering. These systems are designed for greater efficiency and accelerated production of more uniformly dried leaves. They require storage facilities, however, and can cause too rapid withering which prevents the necessary chemical changes taking place. Advantages include: space and time savings; reduced labor costs; greater uniformity of leaves produced; and increased control over the process. (For details on different systems see the excellent discussion by Werkhoven, 1974). Trough withering is the most widely introduced of the new systems. It consists of long troughs deep enough to hold up to 20 cm of leaf. The bottoms of the troughs are made of wire mesh covered with netting. The trough forms the upper part of an air flue through which air can be moved in different directions, permitting less handling and more even wither.

6 Leaf Distortion

The rolling process is intended to initiate fermentation; traditionally this has meant giving a twist to the tea leaves. This twist gives a distinctive look to the tea leaves which is now expected by consumers; therefore, choosing a rolling method now means striking a. balance between appearance and liquoring considerations. The orthodox process uses a series of rollers to break and press the withered leaves. The configuration of the rolling device imparts the characteristic twist or curl to the leaves which will carry through to the final product. Crushing frees the fluid and semifluid contents of the cells, permitting fermentation to commence. It is critical that heat generated during rolling be controlled, the optimum is often around 80-90 P. After rolling is completed, sifting separates the particles of tea from the leaf mass (the residue is commonly referred to as the 'big bulk'). This 'roll-breaking' operation cools the leaf, aerates the mass, and separates it into portions which will be fairly uniform in their fermentation and size of particle. In many areas conventional rollers are still used. However, modifications have been added to deal with special problems. To streamline processing, reduce labor requirements and simplify managerial control, the conventional batch system has in many instances been replaced. Mechanical systems have been developed and increasingly the industry is moving towards use of combination cutting, crushing and drastic leaf distortion machines. The most common machines in use are the Legg-cut, the CTC (Crushing, Tearing and Curling) and the Rotorvane. These machines and others are used on their own, in combination with each other, or with rollers. Precise configurations depend on local circumstances and end product requirements. (Details are provided by Werkhoven, 1974). Overall, liquoring qualities are enhanced with the modern machines, whereas flavor is best preserved with conventional processing.

Fermentation Once the leaf has been bruised or rolled, oxidation of the polyphenols in the leaf begins, Chemical and physical changes in the leaves are responsible for developing liquoring qualities in the tea; this operation is commonly referred to as fermentation.

7 Although fermentation is the most important stage in tea processing, it is usually the simplest and cheapest. In traditional processing, the sifted leaves from the 'roll-breaking' are laid out in a plain room under controlled conditions of humidity and temperature. During fer-mentation the leaf changes color and 'improves' in quality. It is important that correct conditions for production of the desired characteristics are available. The two most important factors affecting the final product are the temperature and the duration of the process. Fermentation is more active between 800 and 85 F (27-30°C) and completely stops at temperatures over 150 F (65 C). The optimum temperature during rolling and fermentation is around 85 0 F. During fermentation the color of the leaf changes from green to red and liquoring characteristics develop. These characteristics include: briskness; quality; color; and strength. They develop at different rates, however, and it is important that fermentation continue long enough to develop the optimum combination of liquoring characteristics, e.g., flavor develops more quickly than quality and may completely disappear if fermentation is unduly prolonged. Over-fermented tea tastes dull and heavy, while under-fermented tea tends to be harsh. The rate of fermentation depends mainly on the severity of leaf distortion, as well as temperature. In orthodox manufacture using rolling, the duratiorl is about three to three and a half hours. Tea which is produced using modern leaf d"stortion techniques can be fermented in around one to two hours. Other factors such as leaf characteristics, condition of the leaf after distortion, humidity, ventilation, degree of wither, thickness and density of spread, room conditions, fermentation method, and bacterial cleanliness are also important. Fermentation conditions should always represent the most acceptable and profitable compromise among the various factors. Modern leaf distortion techniques have radically changed the process; duration can be shortened, temperatures can be higher and oxygen can be applied in place of air. Newer techniques in use include skip, trough, and continuous systems.

8 Drying

The physical and chemical changes taking place during fermentation are abruptly stopped by exposing the fermented leaf to hot air. In this process, usually called 'firing', the tea is dried to a moisture content of around three percent, reducirig the weight of the tea by about one third. In addition to stopping fermentation, drying produces a comparatively stable and easily handled finished product.

Drying is a continuous operation in which the leaves are exposed to forced blasts of hot air. The temperature, the duration of heati%g, and the thickness of the spread tea are important factors. Insufficient heat results in moist tea which is susceptible to quality deterioration. Too much heat will cause case-hardening of the leaves; this prevents even drying throughout the particles, and causes deficiencies in quality and flavor. The final product should be black. Brown color indicates poor processing. After firing, the tea is cooled and graded.

Drying is usually the ,Lust costly operation in tea processing and, therefore, the machines should be used at full capacity. Because of this, drying capacity usually determines the minimum (and maximum) outputs of other processing stages.

Oolong Tea

These teas are produced from an abbreviated version of the process outlined above for black tea production. The process differs in the order and duration of the steps. Freshly picked leaves are withered for about one hour and then cooled. After light manipulation in the hands, the leaves are fermented for a short time and then fired. After drying there may be further rolling followed by steaming and redrying to halt fermentation action.

Green Tea

The primary objective in green tea manufacture is the destruction of the oxidase enzymes responsible for fermentation in the leaves. Although there are numerous regional variations, the basic process is as follows: First, the leaves are steamed in drums, or, as in the case of most smallholder production, in hot pans. Since fermentation is minimized, the leaf remains green.

9 After steaming, the leaves are rolled and fired; the latter process kills any microorganisms which might otherwise cause subsequent discoloration or fermentation of the leaves.

Grading

After cooling, the teas are graded using various sifting devices. Each tea is treated separately and has different grading systems. Tea particles are sorted by size and form so that adequate uniformity and cleanliness requirements are met. For black tea, the grading is determined by the mesh size. In many cases particle sizes for specific grades differ between regions or countries.

Those particles which remain after sifting are broken or cut into desirable sizes. All grades contain pieces of stalk and fibre. These undesirable elements can be reduced by plucking leaves with the minimlum stalk. In addition, mechanical stalk/fibre extractors are utilized.

Winnowing, standard practice in most tea operations, removes the dust, fiber, and fluff, according to the size and density of the tea particles. Several designs, most of them based on wind tunnels and air separation, are in use. (Werkhoven, 1974 offers a detailed description.)

Ai undesirable gray color in black tea results when the film of fermentation products surrounding the tea is removed by excessive sifting, rubbing, and cutting. Another problem that can arise during grading is exposure to atmospheric moisture. Moisture content before packing should not exceed five percent.

Blending

The grades into which tea is sorted in producers' factories are usually sold to middlemen. Retail tea is normally a blend of different grades from different factories. Traditionally, the blending operation was carried out in consuming countries by a few large companies, although teas are increasingly being blended in producer countries.

To make a blend, several alternative mixes, or 'breaks', are possible, and the blender's choice varies, depending in part on supply but mainly on price. In addition, a blend is chosen to

10 achieve certain characteristics: appearance, quickness of brew, flavor, color, briskness and aroma. Blends differ principally according to the market being supplied.

The composition of a blend is also determined by the mode of packaging (the leaf's appearance is important for loose tea, while quickness af brew is important for tea bags), and, in the case of tea bags, the materials used (perforated or fast-flow paper). Herbs, spices, and other flavors can be added to any of the teas to satisfy market demands. Traditional blending involves the sorting and assembly of 80 to 100 tea chests, and then tipping them into drum blenders. It is, however, labor intensive, inaccurate, prone to human error, and requires constant supervision. Modern blending operations are more automated, as a result of efforts to reduce costs, increase efficiencies, and improve the consistency of blends.

Packaging

In the past, black tea needed no further processing or manufacturing after leaving the factory. However, in addition to loose tea in packets, it is now consumed in the form of teabags and 'soluble' or instant tea.

Teabags are of two kinds: the type popular in traditionally high tea consumption developed markets is heat-sealed; the other type is stapled and attached to a string and tag and is popular in gourmet and non-traditional markets. Teas used for tea bags are the lower grade brokens, fannings and dusts which result mainly from processes using modern leaf distortion systems.

Instant Tea

Instant tea is believed to have originated in the United States, although green tea has been powdered and sold in Japan for some time. Developments in '', demand for convenience, and use in vending machines have stimulated its consumption. Details on the techniques for instant tea manufacture are generally trade secrets or protected by patents. Instant tea can be manufactured from various products of the tea process. Fully processed dried and blended black 'made tea' is brewed, concentrated and then dried using freeze-, spray- or

11 vacuum-drying to form cold water instant tea. In tea-growing areas a hot water instant tea can be obtained from fresh green leaves or fermented, undried leaf. In both cases a brew is created and then dried. The brew from the fresh leaves is fermented before drying.

The most important factor in the process is temperature. Overly high temperatures, particularly with green tea, affect the chemical composition of the leaves and cause quality deterioration. An overview of the process is shown in Flowchart 2:

(Black Tea) (Fresh Green (Wet Fermented Leaves) Leaves)

Liquoring

(FermeLtation for Green Tea)

Drying

Packaging

INSTJA T TEA

Flowchart 2: Instant Tea Manufacture

12 MARKETING ASPECTS

Introduction

After the first stages of processing are complete, tea is graded and packed into chests and shipped to be sold either at auction or directly to a blender. In some cases the tea is further processed locally before being sold for domestic consumption or for export. This further processing may consist simply of blending, or it may involve packaging into tea bags or packets, or instant tea manufacture.

Recent significant changes in the tea market include: a growing number of producers; an increasing proportion of tea grown by smallholders; an increasing degree of local processing before consumption; large growth in developing-country markets with slow growth in traditional developed-country markets; and increasing consumer preference for tea bags.

Traditionally tea has been sold at auctions with brokers representing producers. The domination of the market by a small number of brokers and buyers has led some governments to question the dependence on auctions and an increasing proportion of tea is being sold directly by producers. This also has its drawbacks, however, and on the whole most governments prefer to see open transactions through the auctions.

Quality Control

The value of a tea depends largely on the market to which it is sold. It is determined not only by its characteristics, but also by its suitability for blending. Tea quality is determined by the genetic character of the leaf, growing conditions, agronomic and harvesting practices, properties of the green leaf, processing methods and environmental conditions. In tea processing, a balance between quality factors and market requirements is necessary.

Tea quality is primarily based on subjective assessments of taste, aroma, strength, colour and body. In addition there is some use of chemical tests to provide guidelines. The traditional quality evaluation is derived from tasting the brew from a small sample of the tea for sale. There is much 'lore' associated with ; some of the terms used include: malty, hard, burnt, stewed, nose, dull, green, flaky and tippy.

13 Depending on the form of packaging and consumption, the demand for different teas will vary. Teas consumed in different parts of the world have different standards and requirements. For markets such as India, which rely on 'loose' tea, the appearance of the tea is important; in the United Kingdom,. packet teas are sold on their 'liquoring' qualities while 'soluble' teas are sold on their rapidity of . Generally, blenders require a regular supply of uniform teas with stable prices.

Storage

There is often a considerable time lapse between tea production and blending; unfortunately keeping quality in tea is limited. Precautions to maintain quality include: low moisture content, proper firing or drying, and maintenance of low moisture and temperature levels during storage and shipping. Tea should be dried to about 3% during firing, the level should not be above 5 or 6% on leaving the factory. The uptake of moisture during storage and shipping, even under the best conditions is around 2 to 3%. A short period of storage under good conditions 'matures' the tea and improves its taste. However, keeping qualities of tea deteriorate with prolonged storage, in particular when conditions include high temperature and relative humidity levels. Tea can be stored for up to 300 days without loss of character in good conditions. In conditions with humidity levels around 100%, they are 'flat' after 15 days.

Other significant factors include the degree of wither, and the method of leaf distortion. Leaves which have undergone a short wither are less stable than harder withered tea, whilst tea made from modern leaf distortion processes which do not include any withering can be kept in the shop for no longer than a couple of weeks.

Instant tea requires a low moisture content during storage; it will start to cake at moisture levels around 10%, causing rapid deterioration in taste and physical appearance.

14 market Barriers

World trade in tea and tea products is not seriously impeded by tariff barriers. In some countries there is a higher tariff on processed teas relative to bulk or made tea.

Efforts have been made, however to implement country export quotas. In 1981, tea-producing countries adopted the principle that national quotas should be related to expected future production performance. These countries, representing 95 percent of world production, agreed in February 1982 to an export quota system, in order to stabilize world prices within a fixed range. Consuming countries, especially, the U.S., oppose the international regulation of tea supplies, arguing that tea prices are among the least variable of primary commodities.

Other important factors which impede market entry are transportation costs, taxes in consuming countries, and standards of quality, packaging and labelling which differ substantially among markets.

OTHER FACTORS

Process Location

Although there is a trend towards increased processing and packaging in producing countries there are certain limiti ng factors. Tea blenders and packers in centers such as London can adjust their blends in response to price and supply fluctuations in the market. They also have ready and inexpensive access to the necessary packaging materials.

In producing countries, blenders and packers for the export market are at a disadvantage. Although the gross value added by processing tea before export appears to be about 25% for packet tea, 100% for tea bags, and 200% for instant tea, the need to import packaging materials (filter paper, cellophane, etc.) may significantly reduce the net benefit or lead to pricing the end product above that of competitors. There are also difficulties in obtaining a sufficient range of teas for blending.

15 BIBLIOGRAPHY

01, Barua, T C. (1972) The Atmosphere Inside a Tea Factory. Two and A Bud, 19(2) : 68-71.

02. Basu, R P. & Ravindranath. (1981) Factors Affecting Blackness of CTC Teas. Two and A Bud, -8(l) : 8-9.

03. Basu, R P. & Ullah, M R. (1978) Notes on Tea Fermentation. Two and A Bud, 25(1) : 7-11.

04. Cooper, R T. & Wertheim, J. (1973) The Economics of World Tea Production. I. World and Tea, 13(9) 108-111.

05. Dougan, J. et al. (1978) A Study of the Changes Occurring in Black Tea During Storaqe. London : Tropical Products Institute. Report No. G116

06. Eden, T. (1965) Tea. 2nd Ed. London : Longmans.

07. Guinard, A. (1970) Programmation des Investissements dans les Usines a The. Cafe Cacao The, 14(2) : 130-140.

08. Hampton, M. (1981) Compare Fuel Requirement Then Select Tea Process. World Crops, 33(4) : 85-86.

09. Jayaratnam, S. & Kirtisinghe. (1974) The Effect of Relative Humidity on the Storage Life of Tea. Tea Quarterly, 44(4) : 170-172.

10. Nelson, W B. (1980) Automatic Blending Cuts Costs. Tea and Coffee Trade Journal, 152(11) : 18-19,43.

11. Perkins, R S. (1980) Variety: Key in Teabag Packaging. Tea and Coffee Trade Journal, 152(9) : 28-29.

12. Sivapalan, K. (1982) Storage of Black Tea: A Review. Tea Quarterly, 51(4) : 185-189.

13. Theobald, D V. (1983) How Do We Define Tea Quality? Tea and Coffee Trade Journal, 155(10) : 36, 52-53.

16 14. UJNCTAD. (1982) The Marketing and Processing of Tea : Areas for International Co-operation. New York : UN Report No. TD/B/C.1/PSC/28.

15. Wanigatunga, R C. (1983) The Packaging of Tea into Bags and the Manufacture of Instant Tea for Export in India and Sri Lanka. IN: World Bank. Case Studies on Industrial Processing of Primary Products. Vol II. Washington, DC : World Bank

16. Werkhoven, J. (1974) Tea Processing. Rome : FAO. Agricultural Services Bulletin No. 26.

17. World Bank. Commodities & Export Projections Division. (1982) Tea Handbook. Washington, DC : World Bank.

18. World Bank. East Africa Projects Department. (1974) Appraisal of the Tea Factory Prolect Kenya. Washington, DC : World Bank. Report No. 311a-KE.

19. World Bank. South Asia Projects Department. (1982) Staff Appraisal Report : Sri Lanka Tea Rehabilitation and Diversification Prolect. Washington, DC : World Bank. Report No. 353la-CE.

17 ANNEX I:

EXAMPLES OF INVESTMENT AND OPERATING COSTS TEA PROCESSING EXAMPLE 1 - PAGE 1 of 2

Representative Investment and Operating Costs ~------J------

TEA PROCESSING FACTORY Establishment of a tea processing and packaging facility.

COUNTRY: Tanzania (Ukalawa Tea Factory)

NOTE: These data are intended as indicative only and are unique to the time, circumstance, and country of the identified invest- ment. Their applicability to other situations may vary considerably.

Annual Full Development Production (tons): ------=------FiniL,hed tea 874.00

Capacity Utilization at Full Development: not available

------US$ 'OOO------end 1979 prices Local Foreign Total I. Investment Costs:

Civil Works .factory buildings 662.65 662.65 1325.30 water supply 36.14 36.14 72.29 architect/consulting fees 60.24 60.24 120.48 Sub-Total Civil Works 759.04 759.04 1518.07 Machinery & Equipment Withering 59.53 79.51 139.04 Rolling/Processing 7.37 66.36 73.73- Drying 12.99 116.89 129.88 Sorting/Packing 28.88 82.83 111.71 Miscellaneous 38.45 43.39 81.83 Sub-Total Equipment 147.22 388.98 536.19 Utility Installation 185.54 79.52 265.06 Machinery Installation 36.14 36.14 72.29 Power (Diesel) Equipment 12.43 111.90 124.34

Total Investment Costs 1140.37 1375.58 2515.95 ------S------TEA PROCESSING EXAMPLE 1 Page 2 of 2

Representative Investment and C erating Costs ------

NOTE: These data are intenided as indicative only and are unique to the time, circumstance, and country of the identified invest- ment. Their applicability to other situations may vary considerably.

us $ '000 end 1979 prices Total

II. Annual Full Developmlent Operating Costs: ------Variable Costs raw materials 803.62 labor, fuel, packing materials 378<,03 Sub-Total Variable Costs, 1181.65

Fixed Costs maintenance 12.64 depreciation 181.12 administrative 69.50 Sub-Total Fixed Costs 263.25

Total Operating Costs 1444.90

DATA SOURCE: Adapted from World Bank project appraisal report No. 2814-TA, Tanzania Smallholder Tea Consolidation Project, Vol. I.,Table T-3D, and Vol. II, Appendix 1, Table 5.

NOTES: a. Exchange rate - Tanzanian Shillings 8.30 = US $ 1.00 b. Full development is year five after project start-up. c. Breakdown between foreign/local operating costs is not available. d. Data are net of contingencies. TEA PROCESSING EXAMPLE 2 PAGE 1 of 3

Representative Investment and Operating Costs ------

LEAF TEA PROCESSING FACTORY

Construction of a 15 ton/day green leaf tea processing factory. Data are for a rehabilitation project but approximate actual cost of a new investment. COUNTRY: Sri Lanka

NOTE: These data are representative only and are unique to the time, country, and circumstance of the Ldentified investment. Their applicability to other situations may vary consid.erably.

ANNUAL FULL DEVELOPMENT PRODUCTION:

900 tons of made tea

Per Cent of Full Capacity Utilization: not available

------US$ '000------Local Foreign Total 1980 pr.ices I. Investment Costs

Civil Works line room rehabilitation 220.50 73.50 294.00 water tanks 14.00 9.33 23.33 utility upgrade 4.44 6.67 11.11 ramps and drains 120.71 51.73 172.44 water supply 92.20 61.47 153.67 Sub-Total Civil Works 451.86 202.70 654.56 Machinery & Equipment lenear through withovers 626.47 417.64 1044.11 lenear ft. hot ducting 10.00 6.67 16.67 rollers 1091.73 727.82 1819.56 roll breakers 444.67 296.44 741.11 driers 367.00 217.78 584.78 TEA PROCESSING EXAMPLE 2 Page 2 of 3

Representative Investment and Operating Costs ------.------

NOTE: These data are representative only and are unique to the time, country, and circumstance of the identified investment. Their applicability to other situations may vary considerably.

------us$ '000------Local Foreign Total 1809 prices

Machinery & Equipment (cont'd) humidifiers 42.00 28.00 70.00 shifters 146.60 89.85 236.44 winnovers 80.63 53.76 134.39 stalk extractor 173.67 115.78 289.44 leaf trolleys 116.67 77.78 194.44 d~ust fans 24.50 16.33 40.83 cutters 24.73 16.49 41.22 leaf hoist 29.00 19.33 48.33 fuel tanks 9.90 6.60 16.50 scales 3.77 1.62 5.39 terry nippers 25.00 16.67 41.67 pelton 35.33 53.00 88.33 double packers 36.00 24.00 60.00 electrical equipment 90.67 60.44 151.11 generators 348.64 244.69 593.33 tea bulkers 33.33 22.22 55.56 driers 102.67 68.44 171.11 factory motors 133.33 88.89 222.22 miscellaneous 17.47 11.64 29.11 Sub-Total Machinery & Equipment 4013.77 2681.89 6695.67

Total Investment Costs 4465.63 2884.59 7350.22 ------TEA PROCESSING EXAMPLE 2 Page 3 of 3

Representative Investment and Operating Costs

NOTE: These data are representative only and are unique to the time, country, and circumstance of the identified investment. Their applicability to other situations may vary considerably.

US$ '1000 Total 1980 prices II. Annual Full Development Operating Costs (excluding raw materials) ------Fixed Costs permanent staff 1101.91 upkeep & maintenance 373.70 depreciation 2891.63 sundries 50.00 Sub-Total Fixed Costs 4417.24

Variable Costs power 760.03 fuel 2930.52 seasonal labor 2577.02 packing materials 6880.63 storage 909.00 Sub-Total Variable Costs 14057.18

Total Operating Costs 18474.42

DATA SOURCE: Adapted from Preparation Report for the Second Tea Rehabilitation Project, Sri Lanka, 1980. Prepared by National Plannilng Division, Mi.nistry of Finance and Planning.

NOTES: 1. Exchange rate Sri Lankan Rupees 20.55 = US $ 1.00. IMF's International Financial Statistics, May, 1985. 2. Foreign/local cost breakdown is not available for operating expenditures. 3. Data are net of contingencies. 4. Production assumes 300 working days per year. ANNEX II:

CONVERSION TABLES WEIGHTS AND MEASURES avoirdupois

Ton: short ton 20 short hundredweight, 2000 pounds; 08907 metric tons;

long ton 20 long hundredweight, 2240 pounds; 1.016 metric tons.

Hundredweight -ft; short hundredweight '.'0 pounds, 0.05 short tons; 45.359 kilograms; long hundred weight 112 pounds, 0.05 long tons; 50.802 kilograms. Pound lb or lb av; also #; 16 ounces, 7000 grains; 0.453 kilograms. Ounce oz or oz av; 16 drams, 437.5 grains; 28.349 grams. Dram dr or dr av; 27.343 grains, 0.0625 ounces; 1.771 grams. Grain gr; 0.036 drams, 0.002285 ounces; 0.0648 grams.

Troy Pounw., lb t; 12 ounces, 240 pennyweight, 5760 grains; 0.373 kilograms. Ounce oz t; 20 pennyweight, 480 grains; 31.103 grams. Pennyweight dwt also pwt; 24 grains, 0.05 ounces; 1.555 grams. Grain gr; 0.042 pennyweight, 0.002083 ounces; 0.0648 grams. METRIC SYSTEM

Square kilometer sq km or km2; 1,000,000 square meters; 0.3861 square mile.

Hectare ha; 10,000 square meters; 2.47 acres.

Hectoliter hl; 100 liters; 3.53 cubic feet; 2.84 bushels; Liter 1; 1 liter; 61.02 cubic inches; 0.908 quart (dry); 1.057 quarts (liquid). Deciliter dl; 0.10 liters; 6.1 cubic inchs; 0.18 pint (dry); 0.21 pint (liquid). Centiliter cl; 0.01 lit'ers; 0.6 cubic inch; 0.338 fluidounce.

Metric ton MT or t; 1,000,000 grams; 1.1 US tons. Quintal q; 100,000 grams; 220.46 US pounds. Kilogram kg,; 1,000 grams; 2.2046 US pounds. Gram g or gm; 1 gram; 0.035 ounce.