Darjeeling’s environmental estates

Darjeeling’s environmental estates

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Harvesting Ambootia's Darjeeling tea

09 October | 2013

Oikocredit has been working in India since 1978, investing in equity and providing loans to numerous social enterprises throughout the country. Its most recent equity investment is in Darjeeling Organic Tea Estates Private Ltd., known by its principal estate, Ambootia. The family owned company, led by Sanjay Bansal, is the second largest tea producer in the Darjeeling region and the largest producer of biodynamic Demeter certified tea in the world. It is renowned for its high social and environmental impacts.

The Darjeeling label, which is known for its unique flavour and high quality, has been misused in recent decades by many foreign companies claiming to sell Darjeeling tea while selling a mix of other teas. The Darjeeling Tea Association, under Sanjay’s leadership, has worked tirelessly to achieve the ‘geographic indication’ (GI) certification for teas produced in the Darjeeling region.

All tea produced under the Darjeeling label is now recognized by the World Trade Organization and protected from unfair competition. In 2004, Darjeeling Tea was registered as the first GI product in India and in 2011 was registered as a ‘protected geographical indication’ in the European Union. These were big steps in recognition of Darjeeling tea, now enabling a premium for their high quality.

Obtaining premium prices for its tea has allowed Ambootia to replicate its successes and acquire often abandoned estates where the standards of living for workers were low and the health of the tea bushes and soil poor. Currently all of Ambootia’s 11 estates are producing organic tea and the company will implement organic and biodynamic farming methods in all new estates. As a result, the high standard of the tea will continue attracting a higher premium and be re-invested in workers, the estates and the environment.

Ambootia employs nearly 6,000 workers, benefitting a total population of approximately 39,000. Due to the remoteness of many estates, entire communities and villages have been created within the estates and surrounding areas. The income of many tea estate workers is generated in the form of a cash wage combined with benefits, typically including free accommodation for families, free education, medical benefits and subsidised food. Ambootia has implemented fair and competitive salaries, an infant nutrition programme, improved housing, health and education for workers and also settled arrears for unpaid staff.

Ambootia has also made environmental sustainability its priority, being recognised by several worldwide certification bodies such as Demeter, Fair Trade and Bio-Suisse. Ambootia focuses on careful soil management and strategic planting and draining systems to retain the natural flavours and health benefits of the tea. To achieve lower carbon emissions, Ambootia’s tea estates use pest control made from locally available herbs, compost naturally manufactured on the estates local water sources for irrigation and renewable energy.

Members of the Oikocredit equity team visited the tea estates to see first-hand the impacts the company was making in the area. Equity investment officer at Oikocredit International, Alexander Remy, said what struck him about the tea estate was the quality of the tea plants and what Ambootia was doing for the environment. “We could see that Ambootia is at the forefront of changing the tea industry around in the region and leading by example introducing environmentally sound practices, better treatment to the communities living within the estates and seeking to produce teas of exceptional quality,” Alexander said.

In June 2013, Ambootia successfully raised enough capital to acquire more estates to expand its production capacity in Darjeeling. Valuing the company’s strong business and commitment to the environmental and social sustainability, Oikocredit invested € 3 million in Darjeeling Organic Tea Estates Private Ltd., acquiring a minority shareholding.

Some of the company’s best known tea brands come from its estates in Ambootia, Happy Valley, Monteviot, Moondakotee, Nurbong, Nagri and Chongtong. These can be found in specialty tea shops and selected organic supermarkets worldwide.