Tea wars: Kirinyaga, Nyeri tea directors seek more time to pick agents

KTDA Holdings National Chairman David Ichoho address Tea directors from 37 factories located in the East of the Rift valley during a consultative forum on Tea reforms in Embu County on April 15, 2023. [Murithi Mugo, Standard]

Leaders of tea factories in Nyeri and Kirinyaga counties have requested more time to negotiate the management agent contract.

The directors from at least 10 tea processing factories made the request after they met potential agents namely Kenya Tea Development Agency Management Services (KTDA MS), Tropical, Eastern Produce Kenya and Williamson Tea officials during the negotiation platforms organised by the Tea Board of Kenya (TBK).

In Kirinyaga, directors from Mununga, Kimunye, Thumaita, Ndima and Kangaita raised concerns about some of the clauses in the draft management contract and thus asked for more time.

According to sources who were in the meeting, the directors led by John Mithamo said there are clauses that need to be renegotiated to enable the Tea Act to benefit the growers.

The directors were in agreement on the duration of the contract which was reduced from 10 years to five.

But the bone of contention is on the reduction of management fee from 2.5 per cent of the total sale of made tea to 1.5 per cent.

A team was selected and given seven days to review the contentious issues and report back.

Kirinyaga directors met the firms seeking engagement with factories on May 4, and those from Nyeri on May 5.

Directors affiliated with tea factories in Embu County endorsed KTDA as the managing agent for the Rukuriri, Mungania and Kathangariri tea factories.

The regulator extended the deadline for the factories to conclude the negotiations and sign the management agreement from May 2 to 16, 2023, following an earlier request from the management of the tea factories in the East of Rift Valley.

Directors from Nyeri-based tea factories also requested more time to conclude negotiations. Nyeri has Gathuthi, Iriaini, Ragati, Gitugi and Chinga tea factories.

Tea Board of Kenya director representing Mount Kenya region Charles Kirigwi said the stakeholders are required to deliberate on the contract. "There is time for the directors to deliberate on the issues before the end of the time set," said Kirigwi when sought comments.

Negotiation period

The negotiation period was extended after directors from East of Rift bloc led by Prof Joseph Karanja of Ngere tea factory made the request citing the need to invite the four management agents licensed by the regulator to their meetings.

According to the schedule from the regulator, the directors from Gatanga, Kandara and Kigumo will meet the management agents on May 10 while those led by Chege Kirundi from Kiru tea factory will meet the management agents on May 11.

Present in the negotiation meetings in Embu and Kirinyaga was KTDA Chairman David Ichoho who divulged that KTDA last year paid Sh585 million as dividends.

Last month, 35 smallholder factories in the west of the rift appointed KTDA as their managing agent.