Uganda Development Corporation (UDC), government's investment arm, has established two tea factories in western Uganda at a combined cost of Shs9.1b.
The move is part of government's plan to promote value addition in an attempt to align the agro sector to the National Export Development Strategy and National Development Plan II.
Tea is earmarked as one of the priority and strategic commodities in the agricultural sector, which according to Mr Emmanuel Mutahunga, the UDC acting executive director, will impact growth in the export of processed leaf.
Government, he said, had signed a comprehensive lease financing agreement with Kigezi Highland Tea to procure, install and commission a 450 kilogrammes per hour capacity production lines.
"We procured a contractor to supply, install and operationalise the tea processing lines, install and commission electrical works and supply and install two 500KVA power generators at both factories," Mr Mutahunga said. Already, Kabale Tea Factory has been completed and is now operational.
Mr Jackson Twinamatsiko, the Kigezi Highland Tea general manager, said the factory is currently undergoing a trial phase of three months that started in May and will end next month.
"On average we receive 12,000 kilogrammes of green leaf daily with more than 350 farmers from Kabale, Kanungu and surrounding districts supplying the factory," Mr Twinamatsiko said.
The factory, he said, currently employs 75 people with the prospect of multiplying the number when fully operational.
All the tea processed at Kabale Tea Factory is exported to the auction market in Mombasa with the factory exporting 25 metric Tonnes per week.
Meanwhile, the Ministry of Trade has said works on Kisoro Tea Factory are expected to be completed at the close of this year.
The factories, once fully operational, according to the Ministry of Trade, will produce a combined total of 2,400 metric tonnes of ready made tea per year worth $4.8m in export earnings.
Uganda, according to the Ministry of Trade produces 61,629 metric tonnes of tea annually with 90 per cent of this exported through the Mombasa Tea Auction. The tea exports are valued $80.6m.
Global trade in tea stands at an average of around $5b per annum and has been steadily increasing partly due to a change in the beverage consumption habits worldwide.
It should be noted that out of the annual $5b global tea trade, Uganda in 2016 contributed $80m, which translates to 1.6 per cent.
The current tea production nationwide by area stands at 28,000 hectares with an output of 60,000 metric tonnes.
This only reflects 18 per cent of Uganda's potential in terms of tea production.
Uganda's biggest tea producers are fragmented small holder farmers, who according to Trade minister Amelia Kyambadde, must be empowered to realise the country's potential.