Market News

Chai Trading Company top grossing KTDA agency at Sh19 billion

TEA

Chai handles logistics for KTDA. FILE PHOTO | NMG

geraldandae

Summary

  • In 2017/18, Chai Trading Company recorded a turnover of Sh19.3 billion, up from Sh16.5 billion in the previous financial year.
  • The company mainly handles logistics for KTDA-owned factories, which includes storage of tea and shipping of teas. The firm also deals with blending of the beverage, which remains one of its key areas of focus.

Chai Trading Company Ltd, a subsidiary of Kenya Tea Development Agency (KTDA), recorded a 16 per cent increase in turnover in 2017/18 to make it the highest grossing subsidiary among the six managed by the agency.

The annual report released by the firm indicates the subsidiary recorded a turnover of Sh19.3 billion, up from Sh16.5 billion in the previous financial year.

Chai Trading mainly handles logistics for KTDA-owned factories, which includes storage of tea and shipping of teas. The firm also deals with blending of the beverage, which remains one of its key areas of focus.

The firm is capitalising on shortage of space at the Nairobi Inland Container Depot (ICD) to boost its business.

“Space constraints at KPA depot presents an opportunity for this company to offer peripheral storage facilities. The group will develop its facilities located next to KPA’s ICD in Nairobi to exploit this opportunity going forward,” reads the report.

Kenya Tea Packers (Ketepa), mainly dealing with value addition for KTDA teas, recorded a marginal increase in turnover to Sh2.5 billion from Sh2.46 billion previously.

The firm says Ketepa’s performance in revenue was due to unfavourable local business environment characterised by the prolonged electioneering period in August 2017.

The insurance wing, Majani Insurance Company Ltd, recorded an increased commission income of Sh299.8 million in review period from Sh262.4 million realised the previous financial year.

The firm’s power plant earned the agency a profit of Sh51.7 million compared with previous year’s Sh11.6 million.

Small-scale farmers were paid Sh85.74 billion in the year to June, up from Sh78.31 billion a year earlier on the back of increased production. This represented a growth of 9.4 per cent.

A kilogramme of green leaf fetched an average of Sh52.51 in the last season, having dropped from Sh58.61 in 2017. KTDA linked the drop in price per kilo to “escalating costs of production and depressed prices” during the last quarter of the financial year.