KTDA Management Services Limited (KTDA MS Ltd) board and management has concluded talks seeking to revise management agreements for all smallholder tea factories in Embu County.

KTDA MS Ltd is a wholly-owned subsidiary of KTDA Holdings Limited and provides management services to tea factories allied to Kenya Tea Development Agency (KTDA) across the country.

The revised management agreement, once implemented, is expected to repair the relationship between both parties and enhance the administration of tea factories to benefit tea farmers more.

Key changes incorporated in the revised management deal include:

• Reduction of management fee from the current 2.5 per cent to 1.5 per cent.

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• Introduction of key performance indicators to monitor the performance of the management agency on a continuous basis.

• Reduction of the term of the agreement from the current 10 years to 5 years, which is expected to enhance accountability of the management agency.

• Clear demarcation spelling out the role of the management agency and the board to improve their services to tea factories and farmers.

The KTDA MS side was led by its new chairman Solomon Maina, who noted that the firm has vast experience in managing the smallholder tea sector after executing the role for more than 50 years.

Maina called for restructuring of KTDA MS and adoption of mechanisation and automation to cushion it from the impact of reduced management fee even as it commits to implement the deal.

KTDA Holdings board chairman David Ichoho affirmed his board’s pledge to implementing all reforms geared towards enhancing the performance of tea factories and increasing returns to tea growers.

Ichoho stressed on KTDA’s role in empowering small-holder tea factories to enjoy economies of scale through aggregation, enabling Kenya’s smallholder tea subsector to thrive as others are struggling.

Rukuriri Tea Factory Director Joe Muchiri underscored the need to protect KTDA-MS, in which the shareholder has invested heavily over the years and to continue to reap fruits in the years to come.

Kenya currenty has more than 650,000 tea farmers with tea remaining one of the key value chains for agricultural transformation under the government’s Bottom-up Economic Transformation Agenda.