Tea trade: a liquid asset

Tea has been traded as a commodity for centuries and now Dubai has turned into a major hub for re-exporting the beverage. Vision reports

The Japanese like it green, Indians make it with hot milk, the British have it with biscuits or cucumber sandwiches, and in the Arab world it is usually served black or with a twist of mint or lemon.

One of the world’s longest-traded commodities, tea is ubiquitous in nearly every corner of the globe, and it is as popular with the working man as it is with members of high society.

Many tea drinkers may have some idea where their perfect brew came from – India, China and Sri Lanka are the biggest exporters – but fewer will be aware that their tea may have passed through Dubai on the way to be blended, bagged, flavoured and packed.

In recent years, the city has become one of world’s leading re-exporters of tea, capitalising on its good transport links and central location between the growers of Asia and Africa and the consumer markets of the Middle East, Europe and former USSR states. At the heart of this booming re-export market is the Dubai Tea Trading Centre (DTTC), which receives tea from more than a dozen countries including India, Sri Lanka, Vietnam, Indonesia, Kenya, Rwanda and Tanzania.

Set up in 2005, the DTTC is part of the Dubai Multi Commodities Centre (DMCC), the authority for Jumeirah Lakes Towers (JLT), the United Arab Emirate’s largest free zone where over 7,500 companies across all sectors are registered. Today, some 25 companies, including major tea growers, such as McLeod Russel and James Findlay, as well as mega brands such as Taylors of Harrogate, which produces Yorkshire Tea, and Unilever, owner of Lipton, use the centre.

According to Sanjeev Dutta, DTTC Director, the centre has re-exported and value-added 70,000 tonnes and this year it is on course for a record annual throughput of 12,000 tonnes.

The DTTC is located on the southern edge of Dubai, inside the Jebel Ali industrial zone, very close to the world’s largest man-made harbour and the biggest port in the Middle East.

At the back of a giant warehouse stacked floor to ceiling with sacks of tea, 40ft-high shipping containers are lined up in loading bays; some are delivering tea from source, others picking up blended and boxed products that are to be shipped to Europe and beyond.

From his office, which is next to a tasting room out of which drifts the comforting smell of fresh tea leaves, Dutta says: “There are two sides to the business at the DTTC: one is the bulk business where bulk tea moves in and out, the other is value addition.

“By this, I mean tea bags, tags, pack-aging and flavouring. We have a huge blending unit, so people can blend here, and there is a dedicated flavouring room, as well as a new packaging unit next door, which has been set up by the German company Gundlach Packaging, and is one of a kind in the Middle East.

“What we can offer here at the DTTC is the complete package: state-of-the-art machinery, highly efficient logistics and a good business environment, and all this is boosted by Dubai being at the heart of so many trading routes.”

Pankaj Varma, the owner and Managing Director of Dubai-based tea company Inter Tradelink (ITL), agrees.

A former plantation worker turned expert taster and blender, Varma, from north India, joined the DTTC when it first opened. In the space of eight years, he has built up a value-addition business working with 30 different brands.

Describing his business as an “A to Z of tea”, he says the company works with clients to devise tea blends and flavoured products for different consumer markets with their different palates and spending powers, across the Middle East, North Africa, Asia and the former USSR.

“Dubai is in an ideal place to run our business,” he explains. “In terms of leverage of efficiency, transit time to get tea from origin to here, in terms of quality of packaging, and government support for the business environment.

“The DTCC has provided us with infrastructure that has helped us in going towards value addition. I have been able to cater to the needs of my clients who do not have packing facilities at their own disposal or in their markets,” he adds.

Dutta describes the DTTC as a “facilitating platform”. “We get people here, help them set up, give them the facilities and then help them promote their brand,” he says.

He adds that a key component of the DTTC’s success is that Dubai is not a producer of tea itself, so there are none of the protective measures seen in India and Sri Lanka, where mixed origin blends were often only supported for export.