Firm protests over tea plant licence delay

Meru Tea processing. PHOTO | JOSEPH KANYI | NMG
Meru Tea processing. PHOTO | JOSEPH KANYI | NMG 

A private tea packaging firm in Meru County has written to the Competition Authority of Kenya (CAK), protesting over failure by the Tea Directorate to respond to its application for a factory licence.

Njeru Industries Limited, which packages orthodox teas under the brand name Kappa Chai, claims the directorate had a sinister motive when it failed to respond to its application.

The move is set to ignite an old row between Kenya Tea Development Agency (KTDA) and investors over licensing of private tea factories.

KTDA says all tea farmers are affiliated to it, maintaining that any private investor intending to set up a factory should grow their own tea.

In their application dated November 15, 2017, managing director Paul Njeru said the company plans to include the crush, tear, curl (CTC) variety in the types of tea it produces due to low demand for black orthodox and purple orthodox types.

Mr Njeru said the application was also based on findings of a recent survey that there is low tea processing capacity in some counties. The study, ‘‘National Survey on Processing Capacity Needs for the Tea Industry’’, carried out by Lartech Kenya Ltd, recommends setting up more processing plants to maximise on Kenya’s tea production potential.

“From the report, Meru region has excess green tea production of 14 million kilos while Murang’a has 15 million kilos. We are being told that factories will be built but even before this happens in the next three to 10 years, farmers will still be losing their tea because factories cannot handle the crop,” Mr Njeru said yesterday in an interview at his plant in Meru town.

He claimed that KTDA had already applied for licences to establish factories in the areas, intent on blocking prospective investors. “It is in this light that we request the authority to intervene,” Mr Njeru said in the letter to CAK dated February 15, 2018.

“The authority should review all applications and ensure that other investors are given a chance to establish their own tea factories and are not frustrated by being subjected to stringent requirements, which cannot be met in order for only KTDA to qualify,” adds the letter.

KTDA head of corporate affairs Ndiga Kithae had not responded to our queries by the time we went to press on Thursday.