Murang’a Tea Factories to sign long-awaited management agreement with KTDA 

KENYA – After months of negotiations, ten tea factories in Murang’a County are set to sign a crucial management agreement with the Kenya Tea Development Agency (KTDA) on Wednesday.  

The contract between the ten factories and KTDA Management Services will be signed, following pressure by the Tea Board of Kenya (TBK) after the June 30, 2023, deadline expired. 

This agreement, between the factories and KTDA Management Services, holds significant implications for the tea industry as it marks the end of a year-long delay in negotiations and sets the stage for crucial reforms. 

The agreement follows extensive negotiations between the factory directors and the representatives of the management agent, primarily focusing on the control of finances estimated at Kes15 billion (US$94.9M) annually.  

KTDA board members Chege Kirundi and James Githinji disclosed that the factories would retain control over finances, allowing directors to maintain authority over monetary aspects. 

According to The Standard, the agreement outlines that KTDA will handle green leaf processing and human resource responsibilities, while the factories will retain control over resources, striking a balance in the division of responsibilities.  

To further entice the factories, the management contract fee has been reduced from 2.5% to 1.5% of sales proceeds, providing financial relief. 

The signing ceremony is scheduled to take place on January 10, 2024, where KTDA MS and directors from the tea factories will finalize the agreement, bringing an end to a prolonged journey towards implementing reforms for the benefit of small-scale growers. 

“This marks the end of the long journey that the directors have made to ensure the farmers benefit from reforms,” said Prof Karanja, who chairs the board at Ngere tea factory. 

Meanwhile, the boards of Gatunguru, Kiru, and Kanyenyaini Tea factories in the County have resolved to increase the prices of green leaf from Kes21(US$013) to Kes25 (US$0.16) kilo, aiming to increase farmer incomes amid the high cost of living.  

Chege Kirundi, chairman of Kiru Tea Factory, announced that the new price adjustment would be reflected in payments for December production, providing a much-needed economic boost to the local tea farming community. 

“Boards of the three factories have resolved to raise the price of green leaf considering the financial challenges our farmers are experiencing,” said Chege. 

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. HERE