Focus more on value-addition, President Ruto challenges tea factories

President William Ruto addressing tea factories directors at State House on September 11, 2025/FILE

President William Ruto has challenged tea factories to focus on adding value to their products to realise more earnings.

 The President said this while addressing directors from Kenya Tea Development Authority (KTDA) managed tea factories during the handing over of over Sh2.65 billion that was recovered from collapsed banks to the agency.

 The funds were recovered from Chase Bank and Imperial Bank, which collapsed with farmers' funds five years ago and is now being returned to tea growers across the country.

 The President noted reforms in the agriculture sector had raised earnings for tea farmers in the last two years, noting that in 2022, the average price of green leaf tea was Sh51 per kilogramme and the same had risen to Sh64 by last year.

 Total tea export earnings recorded in 2022 were Sh138 billion which then rose to Sh196.97 billion in 2023 and Sh215 billion in 2024, out of which Sh181 billion were from exports.

 Ruto said his plan is to have the total earnings raised to Sh280 billion by 2027 which he said will be achieved through value-addition.

 “We must get our tea from where we are today but to do that, there are certain things we must do. We know very well that our made tea was 535 million kilogrammes in 2022 and last year we had 598 million kilogrammes.”

 “We need to push value addition. This is why Parliament passed a law to remove taxes on packaging materials. As a result, we have licensed five new companies that are setting up in Kenya to begin the process of value-addition,” he told the directors.

 He said the sector has to focus on selling more processed and orthodox tea to raise the earnings especially with his administration opening up new markets such as China that has lifted tariffs on all local agricultural products.

 He said the country currently produces about 13 million kilogrammes of orthodox tea but added that the production should be accelerated as the product fetches higher prices than CTC tea in the market.

 The President pointed out that his government plans to bring in more investors from China to process local tea which will create jobs and ensure the country exports processed products.

 He said the Tea Board of Kenya had earlier raised concerns that some equipment being used in factories were worn out, prompting the establishment of a Sh3.7 billion facility that will help factories modernise at the rate of five per cent through Kenya Development Corporation.

  “And if that kitty is depleted, we will add more money until all factories are modernised so that we can grow our exports but Tea Board of Kenya and other stakeholders including KTDA should begin to have a strategy on how to add value to our tea.”

 Ruto emphasised the need for local tea to have a Kenyan brand as it is sold in the external market saying many buyers have been purchasing local tea and selling it under their brands internationally.

 He said his administration has placed agriculture at the heart of the country's national transformation agenda, saying it remains the pillar of the economy, contributing nearly half of the country's GDP and creating millions of jobs while ensuring food security.

 "Through bold, deliberate and targeted reforms, we have registered 6.5 million farmers, distributed 21 million bags of subsidised fertiliser, dismantled cartels, streamlined management in the sector, opened up new markets and expanded support systems," he said.

 At the same time, the President said there would be no going back on the digital procurement of government goods and services, saying it will be implemented to prevent corruption and the theft of public funds.

 He explained that the e-procurement platform is a cornerstone of the government’s strategy to enhance transparency in the procurement of goods and services.

 He hit out at those opposed to e-procurement, saying they benefit from the inefficiencies of the current manual processes.

 Emphasising that no amount of resistance would deter his administration’s plans, he warned that officials unwilling to adapt to the digital platform should resign.

 "We lose 40 per cent of government money through procurement. That's why we must embrace e-procurement by all means," the President said.

 He said time had come for the public to be informed through a publicly available digital platform what was being supplied to the government and at what cost.

 "We are putting e-procurement in place so that everybody can know how much an item was bought for and who sold it to the government. This is part of transparency and accountability," President Ruto said.

 Agriculture Cabinet Secretary Mutahi Kagwe commended Parliament for its commitment to addressing issues affecting farmers.

 KTDA chairperson Chege Kirundi lauded the President for his intervention that had led to the recovery of the Sh2.65 billion that will now be returned to the farmers.

 "Without your intervention, we’d not have recovered the money," Kirundi said.