Kenya Tea Development Agency (KTDA) has declared a Sh734 million dividend for its smallholder tea farmers for the financial year ending June 30, 2020. 

This year’s declaration represents a 15 per cent rise from 2019 dividend of Sh683 million based on improved green leaf production over the same period resulting in growth in total revenues. 

KTDA established subsidiary businesses in the tea value chain which led to the increased revenues for the year. 

“Group revenues grew last year, driven mainly by increased tea sales volumes. Increased tea production led to high stocks at the peak of Covid-19 and exerted considerable pressure on working capital within the Group,” said KTDA Holdings Limited Chairman Peter Kanyago.  

Kanyago added, “The Board has proposed a dividend of KShs 734 million compared to last year’s KShs 683 million, a welcome performance in an otherwise very difficult year.” 

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He added that the tea development company was continuously working to address the cost of production of tea across the country to enhance farmers’ earnings.  

“We continue to address the escalating cost of production through various ongoing initiatives, the latest being the seasonal labour outsourcing and energy efficiency programs,” he said. 

“The average cost of production reduced by 6.6% from Sh88.98 to Sh83.09 per kilogram of made tea mainly driven by higher cost absorption from higher volumes and cost containment measures instituted,” said Lerionka Tiampati, KTDA Holdings Group CEO. 

“The group will continue to focus on its value chains ensuring that each company remains financially strong and relevant in the chain. 

“Enhanced stakeholder management, adoption of new technologies and diversification of products and services will be key in navigating the future. Increased focus will be placed on staff welfare, training and development as well as prudent financial management of each company in the group.” 

Smallholder tea farmers under KTDA management delivered 1.45 billion kilograms of green leaf for the period under review, up from 1.13 billion kilos in 2019, translating to a 13 per cent growth in total revenues for the factories from Sh69.8 billion last year to Sh79.0 billion.  

The growth in green leaf production offset the reduced earnings per unit kilo of sold tea for the year which averaged $2.38 from $2.59 the previous year. 

By resolution of the 54 tea factory companies’ directors last year, the dividend is paid directly to farmers’ accounts as the shareholders of the 54 Tea Factory companies that own KTDA Holdings Limited away from the previous case where the dividends and final payments (bonus) were issued by the factories. 

The dividend accrues from revenues realized by KTDA Holdings Ltd and its subsidiaries and is over and above what farmers earn as monthly or initial payment.