Says no money from the farmer used to set up the companies. In Summary • The companies are set up using external funds from local and international financial institutions as farmers are paid all the proceeds made from tea sales • KTDA holdings said it has invested in eight subsidiaries along the chain to enhance value for smallholder tea farmers.
The Kenya Tea Development Agency has explained the formation of its subsidiaries and their overall benefit to smallholder farmers. KTDA said it invested in subsidiaries in line with the recommendations in Sessional Paper 2 of 1999 titled ‘The Liberalization and Restructuring of the Tea Industry – Reforms in the Tea Board and Privatization of the Kenya Tea Development Authority’. KTDA Holdings said it has invested in eight subsidiaries along the chain to enhance value for smallholder farmers. “This sessional paper envisaged a position where KTDA would become the largest agricultural conglomerate by investing along the tea value chain and accrued benefits would directly benefit the farmers,” it said in a statement. At the time of privatisation, only three subsidiaries existed–Ketepa, Majani Insurance and Chai Warehousing. The eight subsidiaries include KTDA Management Services, KTDA Power, Greenland Fedha, Ketepa, Chai Trading Company Limited, Majani Insurance Brokers, Tea Machinery and Engineering Company Ltd, and KTDA Foundation. KTDA Management Services deals with the management of factories in line with the recommendations made by the Tea Industry Taskforce of 2007. KTDA Power is involved in power generation aimed at reducing the cost of energy for factories. Greenland Fedha facilitates easy access to credit for farmers. Ketepa is KTDA’s value addition arm that blends and packages tea for local consumption and export. Chai Trading Company Limited's mandate is warehousing, blending, clearing and forwarding, value addition, export and general tea trading. Majani Insurance Brokers was established to provide insurance brokerage services for tea factories and KTDA Group companies. Tea Machinery and Engineering Company Ltd was set up to provide a modern workshop for the fabrication and assembly of machinery for factories. KTDA Foundation focuses on corporate social investments. According to the agency, no money from the farmer was or has been used to set up the subsidiary companies. “The companies are set up using external funds from local and international financial institutions as farmers are paid all the proceeds made from the tea sales less operational costs.” In 2020, KTDA Holdings declared a dividend of Sh734 million for the financial year 2019-20, an increase of 15 per cent compared to 2018-19. The company paid Sh683 million to the farmers through their respective factories. For the last seven years, KTDA Holdings has paid Sh3.8 billion dividends, all generated by the subsidiary companies. Source: The Star
