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KTDA sets sights on paper manufacturing factory

KTDA factory
A KTDA factory. FILE PHOTO | NMG 

Kenya Tea Development Agency (KTDA) plans to put up a paper manufacturing plant as part of efforts to grow its revenue.

The firm is calling interested parties to submit proposals for a business feasibility study for paper products manufacturing.

KTDA is looking at the viability of producing a range of products such as tea sacks, paper bags, cement sacks and other related products.

“Kenya Tea Development Agency (Holdings) Ltd invites proposals from eligible business consultants/consortium to carry out a feasibility study on the viability of setting up a manufacturing plant capable of producing a range of paper products,” says the agency.

Paper is mainly produced from trees and KTDA has panted more than 1.6 million over the years, including 150,000 seedlings last year.

Concerns

It runs subsidiaries to supplement tea business. However, stakeholders in the industry have been concerned that the agency is focusing more on subsidiaries, forgetting its key business of tea, a claim that the company has dismissed before as unfounded. The subsidiaries have been profitable over the years, helping to boost the firm's balance sheet.

Chai Trading Company Limited, for instance, recorded a 16-per cent increase in turnover in 2017/2018 to make it the most profitable subsidiary of the six that are managed by the firm.

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

Chai Trading mainly handles logistics for KTDA-owned factories, which includes storage and shipping of teas. The firm also blends the beverage, which remains one of its key focuses.

Smallscale farmers were paid Sh85.74 billion in the previous financial year, up from Sh78.31 billion a year earlier on the back of increased production. This represented a growth of 9.4 per cent.

A kilo 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.

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