Williamson Tea Kenya says smallholder farmers now supply more than 60 per cent of the green leaf processed in its factories, deepening the outsourcing strategy it started years ago.
The Nairobi Securities Exchange-listed firm said increased production by contracted farmers helped it post a profit in the half year ended September.
“The improved performance for the six months ended 30th September 2022 is pleasing to report as, over the last decade, we have implemented a significant change to our business model by supporting our 11,000 smallholder farmers to scale up their production so that they now supply over 60 per cent of the green leaf manufactured in our factories,” the firm said in a statement.
“The company is at the heart of a vibrant rural community as we work together with over 80,000 Kenyans to create a sustainable high-quality tea business suitable for the important growth markets in the world.”
Williamson Tea saw its sales rally 45.2 per cent to Sh1.9 billion in the six months that ended September. This contributed to the company posting a net profit of Sh246.5 million, reversing a net loss of Sh7.7 million a year earlier.
The company manages tea estates covering 5,265 acres in Rift Valley.
Williamson Tea earlier said it has shifted its marketing to selling high-quality tea to Pakistani and Egyptian buyers through the Mombasa auction following regulatory changes that made the Kenyan coastal city the main place for trading the commodity.
The firm previously sold its products to global buyers directly based on contracts between the parties.
Williamson Tea, which was initially opposed to the auction, said it has benefited from selling high-grade tea there at a time when the dominant Kenya Tea Development Agency (KTDA) has helped lift prices by setting a minimum quote of $2.43 (Sh296) per kilogramme for its supplies.
Williamson Tea says the KTDA is able to obtain the minimum prices at the auction but other players have to compete on quality.