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Nairobi, Kenya – September 17, 2024 – The Kenya Tea Development Agency (KTDA) and the boards of Litein/Chelal and Tegat/Toror Tea Factories have announced plans to proceed with the formal separation of their satellite factories. This strategic move aims to streamline operations and improve financial transparency between the mother factories and their satellite counterparts. The decision comes after months of deliberation and consultations among stakeholders.
A dedicated committee will be established in the coming week to oversee the separation process. The committee will manage the division of accounts between the mother factories—Litein and Tegat—and their satellite factories, Chelal and Toror. The implementation is expected to commence in the 2024/2025 financial year, with the process beginning with Greenleaf management and the allocation of second payments.
The separation will follow the approved policies of each factory’s board, ensuring a fair distribution of resources and responsibilities. Notably, the satellite factories will be required to pay dividends to the mother factories as compensation for the investments initially made by shareholders of the mother companies. These payments are intended to create a win-win outcome for both sides, preserving the interests of shareholders and promoting financial sustainability.
According to a KTDA official, the move is seen as a positive step toward improving operational efficiency within the tea sector. “This separation will allow both the mother and satellite factories to focus on their own operations, making management more effective and ensuring that each entity can maximize its potential,” the official stated.
The separation comes amid increasing demand for transparency and improved governance within the tea industry. Farmers and shareholders are optimistic that the new arrangement will lead to better financial management, more equitable distribution of profits, and overall growth in the sector.
As the committee gears up to implement the separation, stakeholders will be closely monitoring developments to ensure that the interests of all involved parties are safeguarded. The KTDA, known for its role in managing smallholder tea production, will continue to work alongside the factories to ensure that the separation process proceeds smoothly and is completed within the designated timeline.
The successful separation of these satellite factories is expected to serve as a model for other tea factories in the region, signaling a new era of operational independence and accountability in Kenya’s tea industry.
