The Kenya Tea Development Agency (KTDA) has declared a KSh734 million dividend for its smallholder farmers for the financial year ending June 30, 2020 representing a 15% increase from the previous year’s dividend of KSh 683 million and comes on the back of enhanced green leaf production over the same period which led to growth in total revenues for the year.
KTDA Holdings Limited Chairman, Peter Kanyago, attributed increased revenue growth to enhanced tea sale volumes that led to high stocks at the peak of Covid-19 pandemic and exerted considerable pressure on working capital within the Group.
He said the company was continuously working on addressing the cost of production to improve farmers’ earnings. “We continue to address the escalating cost of production through various ongoing initiatives, the latest being the seasonal labour outsourcing and energy efficiency programs,” said Kanyago.
Group Chief Executive Officer (CEO), Lerionka Tiampati, said average cost of production had declined by 6.6 percent on the back of effective cost containment measures from KShs 88.98 to KShs 83.09 per kilogram of made tea driven by higher cost absorption from higher volumes and cost containment measures instituted.
He said the group would continue to focus on its value chains ensuring that each company remained financially strong and relevant in the chain.
” Enhanced stakeholder management, adoption of new technologies and diversification of products and services will be key in navigating the future with increased focus on staff welfare, training and development,” he said.
Tiampati revealed that small holder tea farmers under KTDA management delivered 1.45 billion kilograms of green leaf for the period under review, up from 1.13 billion kilos the previous year, translating to a 13 percent growth in total revenues for the factories from KSh 69.8 billion last year to KSh 79.0 billion.
He said the dividend was paid directly to farmers’ accounts as per resolution of the 54 tea factory company directors last year.