Njeru Tea Factory is only licensed to process orthodox tea, but the regulator turned down their request as they do not meet the required threshold.
The regulator has given Njeru Tea Factory 14 days to shut down a black tea processing line since the firm has not been licensed to produce this type of product.
The Tea Directorate said the factory had applied for variation of its licence to include production of black crush, tear, curl (CTC) variety of tea due to low demand for black orthodox and purple orthodox types.
The factory is only licensed to process orthodox tea, but the regulator turned down their request as they do not meet the required threshold.
Last month, the Meru-based factory raised the matter with the Competition Authority of Kenya, claiming that the directorate had refused to license them in order to protect the Kenya Tea Development Authority.
“It is noted that Njeru Industries Ltd has already installed a black CTC line without the approval by Agriculture Food Authority, which is in contravention of the Tea Industry Regulations,” says the regulator.
“You are required to disable the black CTC line until the factory justifies the source of additional green leaf...,” added the regulator.
The regulator argues that the factory has not provided proof of having adequate source green leaf to support the application.
“As such, the application does not meet the requirement of 250 hectares minimum land planted with tea to support black CTC manufacture as per the requirement,” said the directorate in a letter addressed to the firm.
Njeru has also been accused of buying tea from farmers contracted by the KTDA, hence subjecting the agency to losses given that they have invested on growers by giving them farm inputs to develop the produce, with money supposed to be recovered after they sell the tea to the firm.
The regulator further accuses the factory for selling the commodity at the Mombasa auction when it has not been cleared to trade at the facility.
Njeru Industries started as a cottage factory producing mainly purple and green tea under the brand name of Kappa Chai.
In their application dated November 15, 2017, managing director Paul Njeru said the company plans to include the variety in the types of tea it produces due to low demand for black orthodox and purple orthodox types.
Mr Njeru told the Business Daily earlier that the application was based on findings of a recent survey that there is low tea processing capacity in some counties.
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