A number of Kenya Tea Development Agency (KTDA) tea buyers and packers have welcomed the use of the Standard Gauge Railway (SGR) for their direct sales.
The KTDA buyers and packers said they had experienced enhanced logistical efficiencies and savings from the use of the SGR to transport tea.
Nine KTDA-managed tea factories have transported tea for export worth more than Sh600 million using SGR since May 2019, leverage on the government’s investment on infrastructure.
Mungania, Ngere, Momul, Gacharage, Kapkoros, Makomboki, Motigo, Imenti and Kionyo tea factories used the SGR to transport over 2 million kilograms of tea to the market in a process known as ex-factory containerisation.
In Direct Sales (DS) tea is processed, stuffed into containers for export at factory and transported to the Mombasa port without going to the warehouse (ex-factory containerization).
From the factories, the containers are ferried by road to the Nairobi Inland Container Depot (ICD) in Embakasi where they are railed to the port using the SGR train for export.
This has led to efficient transportation of made tea to the market and factories get paid much earlier compared to when tea is transported by road to Mombasa and sold normally after storage.
“Ex-factory containerization continues to be an increasingly preferable option for big packers that have direct sales arrangements with factories,” said KTDA Management Services MD Alfred Njagi.
“Over and above being a more efficient method of transporting tea by cutting down on delays occasioned by road transport and warehousing, it has added advantages in that tea factories do not incur auction expenses such as warehouse storage and brokerage costs,” he added.
He added that the SGR route ensured reduced transportation costs and faster payment processing.
“It presents an opportunity for factories to leverage the SGR framework to reduce costs; while getting payments processed faster for their sales. For the customers, this process ensures quality of product is maintained due to the shorter time it takes to reach them and also guarantees product safety due to lower multi handling of the tea.”
Njagi said KTDA is considering constructing KTDA Warehouses next to Nairobi ICD with its extension to Naivasha set to better serve tea factories in Rift Valley and Western Kenya.
Currently, the containerization is being done jointly between the nine KTDA factories and Taylors of Harrogate, a leading packer based in UK, with whom they have a direct sales pact.
So far, 92 units of 40ft containers have been successfully containerized at the factory and transported by SGR to the port of Mombasa for export.