Kenya Tea Board of Kenya MD Sicily Kariuki says the tea industry is looking up. Photo/Diana Ngila
What you need to know:
Four plants to start operations soon and raise processing ability by 60 million kilos a year.
The tea industry expects an additional processing capacity of 60 million kilos of leaf a year when four newly licensed factories start operations.
Sicily Kariuki, the managing director of the Tea Board of Kenya, said approval was granted last week for new factories to be built in Kericho, Bomet and Nakuru counties.
“The extra processing capacity will be available in the medium-term. There is a lot of movement in the industry in terms of people seeking to make new investment in all the key areas of production and packaging,” she said.
In 2012, the country had a leaf processing capacity of 370 million kilogrammes against a total leaf production of 369 million kilogrammes.
The country’s record tea output was 399 million kilogrammes in 2010, meaning that with the extra factory capacity, the industry can comfortably process its total leaf production.
“We also have applications for inspection of five packaging facilities, which is good news in terms of value addition,” Ms Kariuki said.
Currently only about 12 per cent of Kenya’s tea output is value-added despite the premium returns realised from the sale of such tea. The rest is shipped out in bulk form and blended with teas from other producing countries.
“We believe value addition means higher returns and we hope the government both at county and the national level will support all initiatives aimed at achieving this goal,” Ms kariuki said.
Interest in the tea business has risen following record bonuses paid out to farmers in the past two years. More people are growing tea while factories are under pressure to expand capacity to match the increased supply.
Ms Kariuki said the board would realign its operations with the county structures to cater for the needs of producers.
“We intend to put up a new office to cater for areas such as Kisii and Nyamira. We are already working on a new structure that should be ready by June,” she said.
The regulator currently has offices in Kericho, Mombasa and Embu counties. Kericho county accounts for about 14 per cent of the total national tea production while Mombasa hosts the sole auction for Kenyan export tea.
Tea remains a leading foreign exchange earner for the country having fetched Sh112 billion in 2012. Projections by the board show the country is expected to earn Sh116 from exports this year.
Buoyed by favourable weather, the country’s tea output jumped 109 per cent to 38.5 million kilogrammes in February compared with the same period last year.
Tea exports, however, dropped to 42.9 million kg compared with 44.7 million in February 2012, attributed to fluctuating demand from the seasonal and lower end markets.
During the month, 24.2 million kg of tea was sold through the auction at the port of Mombasa, a rise from 20.8 million kg in the same period of 2012.
