Smallholder tea farmers affiliated to factories managed by Kenya Tea Development Agency (KTDA) are this week set to receive Sh734 million from their tea factories in dividends.
The payment is in respect to dividends KTDA Holdings paid its tea factory shareholders for the financial year ending June 30, 2020 from income earned from its subsidiaries.
The dividend payment is a 7.4 per cent increase from the previous financial year when farmers were paid dividends of Sh683 million and is part of other incomes earned by the tea factory companies to complement tea sales and interest earnings.
The tea factories, through resolutions of their directors, assigned the dividend income directly to the farmers who are shareholders of the tea factories that own KTDA (H) Ltd.
The payments mark the second year in a row that the dividends are being made as a standalone payment directly to farmers and which are reflected in farmers’ pay slips.
KTDA Holdings has 7 subsidiaries that run as standalone businesses along the tea value chain and it has grown returns to its shareholders amid tough times due to the Covid-19 pandemic, low tea prices and struggling economies in key tea markets.
KTDA Holdings has maintained that its subsidiaries have declared their dividends at the end of the respective financial years and is captured in KTDA’s past annual audited accounts.
KTDA Holdings subsidiaries are KTDA Management Services that runs tea factory firms; KTDA Power that generates power for tea factories; Greenland Fedha which provides credit to farmers, and KETEPA which blends and packages tea for local consumption and export.
Others are Chai Trading Company Limited which provides warehousing, blending, clearing and forwarding, value addition, export, and general tea trading; Majani Insurance Brokers which provides insurance brokerage services for tea factories; KTDA Group companies which provide a workshop for fabrication and assembly of tea machinery for tea factories, and KTDA Foundation which deals in corporate social investments.
The 2021 dividend payment to farmers is surpassed what they earn as initial payment, coming at a time when Covid-19 pandemic has disrupted most socio-economic activities.