Kenya Tea Development Agency Holdings has announced a dividend payout of Sh1.04 billion for the year ended June 30, 2024, the highest in the history of its operations.
The dividends are payable to farmers through their factories which are the 54 corporate shareholders of KTDA Holdings Limited.
They are derived from the profits made by KTDA Holdings and its subsidiaries which include, KTDA Management Services, KTDA Power, Majani Insurance Brokers, Greenland Fedha, Chai Trading Company, Tea Machinery and Engineering Company (Temec), Chai Logistics, and Ketepa.
The high payout to tea farmers under KTDA management comes after the company’s earnings went up to Sh89.21 billion, from Sh68.22 billion recorded same period last year.
“Our focus is to ensure that every decision and strategy we adopt directly benefits our farmers by increasing their earnings, reducing costs, and improving overall efficiency in the tea value chain where the farmers have invested,” KTDA Holdings national chairman, Enos Njeru, said.
Group CEO Wilson Muthaura said KTDA will continue to invest in new technologies and innovations to enhance operational efficiency.
“As management, we are working with factories to increase efficiency and diversify our products. In the wake of climate change, we are also looking to introduce high-yielding teas to ensure that tea production remains sustainable,” Muthaura said.
Njeru has lauded the continued government support, especially on fertiliser subsidy which saw farmers this year save an average Sh900 per bag of 50 kilogrammes.
The dividends come even as farmers push for direct shareholding in KTDA, a process that was mooted in 2021 but failed to be implemented.
The agency’s former leadership had amended the company’s Articles of Association to allow individual farmers to directly own shares in KTDA, as opposed to the current format where the farmers own shares in their respective factories, which then have shareholding in the company.
The 620,000 farmers have accused management of denying them a chance to have a representative in the board, while blocking them from direct shareholding.
The farmers also claim the company has removed the requirement for approval by 50 per cent of shareholders when directors want to sell KTDA assets above the value of 10 per cent.
Removal of the power of farmers to elect their zonal representatives directly, on a one man one vote model, as opposed to directors voting one of their own, remains a bone of contention.
Farmers were to be allotted five million shares that would have allowed them earn dividends directly in addition to their entitlements to what their respective factories get, which is the currently announced dividends.
KTDA management however said KTDA intends to maintain the existing structure where the farmers own shares in the factories, while the factories own shares in KTDA Holdings.
“It is a duplication to have a mother board member appointed directly by the farmers as the current board members are the farmers’ representative duly elected as directors,” KTDA group head of corporate affairs, Ndiga Kithae, told the Star.
Last month, Agriculture Cabinet Secretary Andrew Karanja appointed a task force to look into smallholder tea farmers’ issues including the governance structures in KTDA.
The 14-member team and a secretariat of six members is set to perform regulatory functions, policy
assessment and recommendation,
development and implementation
of an action plan, propose practical
solutions, and a performance review
of the 54 KTDA-managed smallholder tea factories.
