The Kenya Tea Development Agency (KTDA) declared Ksh 734 million in dividends for tea farmers for the period ended 30 June 2020. This is a 15% increase from the previous dividend of Ksh 683 million, following growth in revenues for the year due to enhanced green leaf production.
KTDA Holdings Chair Peter Kanyago attributes the higher revenue to increased tea sales in the past year.
“Group revenues grew last year, driven mainly by increased tea sales volumes. Increased tea production led to high stocks at the peak of Covid-19 and exerted considerable pressure on working capital within the Group. The Board has proposed a dividend of Ksh. 734 million compared to last year’s Ksh. 683 million, a welcome performance in an otherwise very difficult year.” said Kanyago.
Higher greenleaf volumes helped to buoy against lower earnings per kilo. Earnings per kilo of tea fell from $2.59 last year to $2.38 this year.
Greenleaf from farmers grew from 1.13 billion kilos last year to 1.46 billion kilos in the year ended 30 June 2020. Consequently, revenues in the period under review grew by 13% to Ksh 79.0 billion from Ksh 69.8 billion in the previous year.
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KTDA Records Lower Costs of Production
The agency recorded lower costs of production, following cost-cutting initiatives such as seasonal labor outsourcing. KTDA Group CEO Lerionka Tiampati says the average cost of production per kilogram of made tea fell by 6.6%.
“The average cost of production reduced by 6.6% from Ksh. 88.98 to 83.09 per kilogram of made tea mainly driven by higher cost absorption from higher volumes and cost containment measures instituted,” said Tiampati.
