Kenya Tea Development Agency Holding (KTDA(H) has approved the autonomy of two satellite tea factories in Region Five.
KTDA(H) national chairman Enos Njeru said the separation of Chalal and Toror tea factories from Litein and Tegat tea factories respectively would be done in accordance with the set processes.
Litein Tea Factory is the mother of Chelal Tea Company while Toror is a splinter of Tegat.
Njeru explained that separation is the process of giving autonomy to satellite factories from the mother factories after the former has gained sufficient capacity to operate on their own.
He said mother factories are facilities that were started by farmers collectively to process their tea while a satellite factory is set up because of an increase in production or that specific factory not meeting the capacity to process the tea delivered
“Due to this increase, farmers may decide to start another factory and the second factory which is termed a satellite is owned by the mother,all the management and leadership issues are overseen by the mother factory,” Njeru said.
Njeru spoke during a press conference on Monday.
He noted that the farmers who deliver their tea in the new factory may feel or decide that they need to separate from the mother because the issue of delivering, processing and other things are done separately yet they are still joined by either loans or investments.
“Loans may have been taken to start the satellite or they may have invested in other things and jointly, the farmers own the two facilities. When it comes to the issue of separation, there is a need to have a proper way of compensating the investors,” he said.
The National Chairman said the separation of accounts of the satellite factories from their mothers would proceed in the Financial Year 2024/2025, starting with the payment of green leaf.
Speaking during a meeting between the KTDA(H) board of Management and the boards of Litein/Chalal and Tegat/Toror, he added that the satellites will pay dividends to their mother factories based on policy to compensate the shareholders of the mother factory on their investments.
“A committee will be established to oversee the smooth implementation process by the end of this week and come up with a roadmap of separation of the two mother factories from the satellites,” he said.
Njeru said the shareholders would not lose their investments and urged the committee to keep the farmers updated on the progress of the separation process.
In the recent past, tea growers across the country have been pushing for the separation of satellite tea factories from their parent factories.
Through a movement dubbed ‘No Separation, No Operation’, the farmers maintained that satellite factories had gained the necessary capacities for autonomy.
