Tea farmers in Kenya are set to earn big from heightened value addition as Kenya prepares to host Africa’s first decaffeination facility that will see the country export the flavour to global energy drinks makers.
This is after Global Tea & Commodities Limited, an integrated tea processor offering a range of services at all stages of the supply chain acquired a 17-acre piece of land in Kwale County for the expansion of its activities in the country, an Sh3.2 billion investment that will see it set up a decaffeination facility, sixth globally.
Traditionally, Kenya has been exporting raw tea, coffee and macadamia to countries in Europe and Asia with established decaffeination facilities that later export back value-added products that cost almost 10 times the value of a kilo of raw tea.
Decaffeination, the process of removing caffeine from coffee beans, tea leaves, and other products, has gained prominence due to a growing awareness of the potential adverse effects of excessive caffeine consumption.
This market’s expansion can be attributed to various factors, including shifting consumer preferences, health-conscious lifestyles and a rising emphasis on sustainability and ethical sourcing practices.
According to the latest BCCResearch study, the demand for the global decaffeinated Products market is estimated to increase from $3.1 billion in 2022 to reach $4.7 billion by 2028, at a compound annual growth rate (CAGR) of 7.3 per 2022 through 2028.
In an exclusive interview with Global Teas & Commodities Kenya, managing director, Fahim Ahmed, the Star learned that the producer of Kericho Gold Teas and Baraka Chai is at advanced stage of sourcing strategic investors even as it plans to move its operations from Chai Street in Mombasa County, where it has been conducting business for nearly 30 years.
“The decaffeination facility will see us execute high-level value addition to locally grown tea and coffee, increasing returns and contributing to the social economic growth of the country,’’ Fahim said.
According to him, the fresh investment is expected to more than triple the firm’s operations, creating at least 600 new direct job opportunities and millions of shillings in economic value.
The current Mombasa-based facility has directly employed close to 800 people with several others indirectly employed in the firm’s supply chain, including distributors of its various brands across the globe.
According to Fahim, very few decaffeination and other high-tech value additions for tea and coffee are produced in the continent, forcing tea buyers to export most of the raw materials, generating little returns for farmers while subjecting companies like Global Tea and Commodities to high operation costs.
“The planned facility will increase our operations base to 170,000 square feet from the current 50,000 square feet at the restricted Export Processing Zone (EPZ). It will enhance efficiency and create a more conducive working environment for employees,’’ Fahim said.
He explained that the facility will host both loose tea packaging and bagging areas, with products specifically designed for different markets across the globe.
Apart from decongesting the operation base, Global Teas which hosts Crawn Gold Beverages will set up various social amenities to cater to employees’ needs including health and education facilities.
“We hold our employees in high regard. We will set up health and education facilities, complete with qualified personnel to cater to the families of our employees. Although we currently have health covers for them, they are forced to compete with the general population for available facilities, consuming most of their productive time,’’ Fahim said.
He disclosed that the plant will be purely green, with solar as the main source of energy. Water used at the facility will be recycled complete with modern water harvesting technologies.
The firm has previously won a Queen’s Award for Enterprise, specifically in the category of Sustainable Development, recognizing their achievements in social and environmental development within their tea production operations; highlighting their commitment to producing goods sustainably and adding value while minimizing pollution and waste.
The expansion will also see the firm cut on the importation of finished goods and raw materials, thereby massively cutting carbon emissions in its supply chain. Global Tea is among the few international firms expanding operations in the country at the time available data is indicating a slowdown in Foreign Direct Investments (FDIs).
The company has
been named as the largest buyer at
the Mombasa auction consistently
for almost a decade, accounting for
close to 15 per cent.
