PRESS RELEASE
NYERI TEA FACTORIES SIGN MANAGEMENT AGREEMENTS WITH KTDA
NAIROBI – Monday, July 3, 2023: Smallholder tea factories from Nyeri County have today signed new management agreements with the Kenya Tea Development Agency Management Service Limited (KTDA-MS) for the provision of management services for the next five years. They join tea factories from the West of the Rift Valley, as well as those in Embu, Meru, and Kiambu counties in signing new agreements with KTDA-MS, committing to continue using the organization to manage their affairs for at least the next five years.
The signing of new management agreements between KTDA-MS and factories is part of the ongoing reforms in the tea sub-sector as contained in the Tea Act of 2020, and subsequent subsidiary legislation, which call for enhanced management agreements for factories in favour of the smallholder tea farmers.
The reviewed management agreements are a shift from the current arrangement which are expected to remedy the relationship between the parties and improve the management of tea factories for the benefit of tea farmers once implemented.
Among key changes in the reviewed management agreements include:
- Reduction of management fees factories pay management agents from the current 2.5% to 1.5% of net sales value of the tea sold per year.
- Introduction of key performance indicators to monitor the performance of the management agency on a continuous basis.
- Reduction of the term of the agreement from the current 10 years to 5 years which is expected to enhance accountability of the management agency.
- Clear demarcation spelling out the role of the management agency and the board to improve their services to tea factories and farmers.
Speaking following the signing of management agreement negotiations between Nyeri County tea factories and KTDA-MS, KTDA Holdings Chairman, David Muni Ichoho said:
“We are pleased to have Nyeri County factories committing to continue using KTDA for the provision of management services in what is a strong statement of confidence in what the organization manages to do for smallholder tea farmers in the country. This follows our resolve to enforce reforms in the tea sub-sector for the benefit of the smallholder tea farmers under the KTDA umbrella.”
The reviewed management agreements with KTDA MS Ltd will be submitted to the Tea Board of Kenya for review and approval before implementation.
ENDS.
For More Information, kindly contact:
Ndiga Kithae
KTDA Holdings Group Head – Corporate Affairs