Low tea prices are a temporary setback to KTDA’s progress

Saturday February 21 2015

Since the Kenya Tea Development Authority was privatised and renamed Kenya Tea Development Agency (KTDA), the company charged with the management of the smallholder tea sector has gone through a period of incredible growth.

As an observer of industry trends, I believe the current challenges, which mainly revolve around low prices of made tea at the auction, are temporary and will be overcome sooner rather than later.

The most visible achievement has been in the growth of factories from just 45 in 2000 to 66 today, translating into 21 new factories in 15 years. KTDA also manages two factories in Rwanda. In addition, many of the existing factories have been expanded from one-line to two-line operations, enabling the factories to process and export more made tea.

KTDA’s annual processing capacity has grown from 665 million kilogrammes of green leaf in 2000 to nearly one billion kilogrammes of green leaf currently. The number of small-scale tea farmers also increased to over 560,000, up from 356,000 in 2000. During the same period, KTDA harnessed available technology to improve efficiency in the factories and reduce production costs.

It automated all its business processes and introduced continuous fermentation units at the factories to improve the quality of made teas and cut down on the cost of labour.

To improve logistics in tea weighing and transport, electronic weighing solutions were introduced. These revolutionised the way tea is weighed, transported and processed at the factories.

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Despite these accomplishments, global tea prices have been less than favourable over the past two years, leading to depressed earnings for farmers and factories.

To sustain the gains made over the past 15 years, smallholder farmers, who are also the shareholders of their factories, must consistently elect leaders with drive, knowledge and vision. The importance of leadership and good corporate governance at the factory level can never be understated.

The other areas, that must be given attention are growth of markets (both locally and internationally); continued focus on cost reduction with particular emphasis on cost of energy; product diversification and land reforms to check the continued subdivision of land in tea growing areas.

Fred Gori
Nairobi
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Uneasy Burundi not good for the region

Elections to choose presidents are with us: Tanzania, Burundi, the Democratic Republic of Congo. As it happens with such seasons, everyone is eager to know who will run, where and if they will win.

Among the topmost questions on the minds of regional observers is: Will Burundi President Pierre Nkurunziza run for a third term at the end of his current and second term?

We could make the question broader to include Rwanda President Paul Kagame and, if he hadn’t already declared his stand (he won’t be running), Democratic Republic of Congo’s Joseph Kabila.

Or, we could ask if President Nkurunziza will follow in the footsteps of Uganda’s President Yoweri Museveni and Zimbabwe’s Robert Mugabe and seek another term and another, on and on? The two presidents have been in office for over 25 years and counting.

However, since these countries have different circumstances, we will confine ourselves to Burundi. Burundi is a country with a restless, volatile past. The country was mired in civil strife for decades before it found some semblance of peace, albeit negotiated, through the Arusha Accord.

Unlike Rwanda, Burundi’s economic figures and standing in the eyes of the world are not as encouraging. Indeed, as we speak, there are all manner of undercurrents that point to instability ahead.

Thus, with elections looming and the incumbent silent on his plans, while the chief of the National Intelligence Service Maj-Gen Gedofroid Niyombare has been sacked, unnecessary and unwelcome tensions may arise. That would be bad for the region.

Justus Mwachofi
Via email

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