• Ikumbi tea factory signed an MoU with Poly Intercontinental Trading company to supply and instal a Sh57 million plant that will produce a variety of specialty tea.
• The Chinese company has guaranteed farmers that it will buy all the tea processed through the plant at a minimum price of $8.
Image: Alice Waithera
@Alicewangechi
A tea factory in Murang’a county has inked a deal with Chinese investors to have some of its produce sold in the Asian country.
In the deal, the Chinese investors will help Ikumbi tea factory in Kigumo subcounty to set up an orthodox tea processing plant in which more than 2,000 kilos of tea will be exported every day.
The factory with 6,500 active tea farmers signed a memorandum of understanding with Poly Intercontinental Trading company to supply and instal a Sh57 million plant that will produce a variety of specialty tea for the Chinese market.
The Chinese company has guaranteed the farmers that it will buy all the tea processed through the plant at a minimum price of $8 (Sh1,164), far exceeding the current prices for the conventional tea that stands at $2.50 (Sh363.75).
Orthodox tea is processed using a traditional procedure that includes plucking, withering, rolling, oxidation and drying, resulting in loose and curly tea leaves.
It differs from the black tea that is processed by crushing, tearing and curling, producing small hard pellets and is the common tea consumed in most households in the country.
The partnership will last for an initial renewable period of five years and is set to be a game changer for tea farmers as it will provide an alternative market for their produce.
Image: Alice Waithera
Factory’s chairperson Onesmus Kibuna said the factory that produces an average of 50,000 kilos of tea daily during the low season will see a significant reduction in the amount of tea being sold through the Mombasa auction.
He said the Kenyan tea depends on a limited market in the United Kingdom, Pakistan, Egypt, Sudan and Afghanistan and that farmers suffer when it is destabilised.
“Like in Sudan, we have been unable to sell our tea there since June when the civil war started,” Kibuna told farmers.
He said the deal will provide a ready market while boosting farmers’ returns, adding that the vast Chinese population has an insatiable demand for tea.
This, he said, is despite the fact that China consumes all tea produced by its farmers.
Kibuna appealed to farmers to maintain high quality of their produce by ensuring they harvest two leaves and a bud so as not to compromise the standards set for the deal.
Bai Junsheng, who represented the Chinese company, said the firm already processes and sells more than 100,000 tonnes of tea to the Chinese population annually.
The deal, he said, will provide an opportunity for local tea farmers to access the Chinese market and will strengthen trade ties between the two countries.
“Once we are able to market your tea and your brand becomes popular in China, the prices will increase. We will continue to walk together in partnership” Junsheng said.
KTDA board member representing zone two, James Githinji, said the partnership will be a hallmark in relations between the two countries on tea trading.
He hailed the factory for being visionary and reaching the deal that will improve farmers earnings.
Image: Alice Waithera
Githinji said the factory had set the way for factories managed by KTDA venture into specialty teas and diversify their markets.
“Private factories have been milking this opportunity for a while and I'm glad our factories started exploiting it too,” he said.
According to the Tea Board of Kenya, the industry earned the country Sh138 billion in exports and Sh20 billion in local sales.
The sector accounts for 25 per cent of the country’s total foreign exchange earnings and contributes seven per cent of the GDP.
Board’s acting CEO Peris Mudida said the government has prioritised a variety of value-chains, key among them tea, coffee, leather, textiles and garments, edible oils, dairy, meat and meat products that are expected to lead export-led economic growth.
“In the tea sector, the tea board is focusing on promotion of value added tea, expansion of market and diversification into specialty tea.”
She said the board has sanctioned a marketing consultancy to develop a five-year tea global market expansion strategy targeting 13 priority markets including USA, Canada, Germany, Poland, Saudi Arabia, UAE and Iran.
Others include Turkey, Japan, China, South Africa and Ghana.
She lauded the factory for embracing value addition and product diversification, saying the new approach will result in more earnings for farmers.
Charles Kirigwi, a director at Tea Board of Kenya representing East of Rift Valley region, said the President has given instructions to have tea going through the Mombasa auction reduced in the next five years.
Annually, he said, about 30 per cent of black tea taken to the auction fail to sell, saying it’s the first time that the country has penetrated the Chinese market, favoured by the good flavour of the local tea.
He said the government is liaising with foreign countries such as China that export commodities into the country to have them buy locally produced goods for balance of trade.