The Mountain Journal
editor@themountainjournal.co.ke
The effects of reduced management fee has been felt across the tea factories after they posted lower fees compared to that of the previous years.
The management fee was reduced to 1.5 percent from 2.5 percent of the net sale of tea in both auction and direct markets, to conform with the Government backed Tea Act 2020.
KTDA Board Member for zone Six, Mr Enos Njeru said the reduction of the fees has been celebrated in many of the management fees endorsed by the farmers in the reforms and was reduced from 2.5percent to 1.5 percent of the sales made.
KTDA Holding Director Enos Njeru in a tea farmers meeting last week
Njeru during the Annual General Meetings at Rukuriri, Mungania, and Kathangariri factories in Embu county, last week said all the 71 factories posted a reduction in the management fees, thus farmers got more bonus payment.
Tea factory directors consulting during an Annual General Meeting at Mungania tea factory last week.
At the Rukuriri factory, last year KTDA Management Service paid Sh28.2 million compared to Sh 59.6 million in the previous year, followed by Kathangariri Sh20.2 million up from Sh39.7 million.
“ Reduction of the management fees has been celebrated by the farmers coupled by other reforms on factories being in charge of their finances and procurement responsibilities,” said Njeru.
Gatunguru Factory Chairman Mwangi Kaguma said the reduction played a major role in the industry , as the growers were previously over burdened by the high charges.
In the year under review, Kaguma detailed that the factory paid KTDA MS Sh 23,8 million for the management services down from the previous 51.3 million.
Mogogosiek tea factory in the west of the rift parted with Sh49.8 million up from Sh87.7 million for the management services
The annual payment was Sh1 billion compared to the previous Sh 1.6 billion.
“ We are ready to resist any attempt being sneaked through the Tea amendment Bill to increase the management fee to two percent,” said Kaguma during the factory AGM.
On strategies to increase production of the quality tea, and marketing, Njeru said the factories have embraced value addition, as the factories registered reduced production of green leaf, following the effects of climate change.
Njeru said in Embu county the three factories have invested millions of shillings in upgrading of the equipment to achieve reduced cost of production, and perfect value addition programmes.
“ As the leaders we are improvising on cost reduction to ensure the farmers get the highest returns, as demonstrated by the Rukuriri factory that paid the highest bonus in Kenya of Sh 57.50 per kg that was processed in the year under review,” said Mr Njeru.
He added that a tea consumption campaign will be intensified in the country as a strategy to give farmers a better payment
Rukuriri, Mungania and Kathangariri factories working with experts are installing orthodox tea processing lines, automatic weathering machines, eying the perfection of the value addition of their tea to satisfy the international markets.
In Embu, tea farmers produced 54.6 million kgs of green leaf and earned Sh3.1 billion in the year ended June 30, compared to 61.2 million kgs of green leaf and Sh3.8 billion last year.
Rukuriri factory Chairman Joseph Rwanjau said they are installing the orthodox and automated machines focusing at providing the market with the quality products based on the market survey.
This year Rukuriri factory paid the highest bonus of Sh57.50 per kgs for the 18,751,307 kgs of green leaf processed between July 1, last year and June 30.
“Based on the existing competition among other tea producers the factories have innovative ways to remain in the global market,” said Rwanjau.
