Smallholder tea farmers to receive Ksh.649 million dividend boost
By Daisy Okanga | Smallholder tea farmers affiliated to Kenya Tea Development Agency (KTDA) managed factories will receive Ksh.649 million from their tea factories in the month of June.
This would be the dividends received from KTDA Holdings Ltd and its subsidiaries for the financial year which ended on June 30, 2019.
Over the last five years, factory companies have received more than Ksh.3.7 billion in dividends from KTDA and its subsidiaries’ business activities, the amounts having been previously consolidated.
Based on the different sectors and regulatory regimes, the various subsidiary companies are governed by different regulatory institutions in the country.
The tea factories, through resolutions of their directors, have resolved to pass the dividends received from KTDA holdings directly to the farmers who are the shareholders.
In observance of corporate governance rules, the payslips farmers will receive from their respective factory companies will now show the actual dividend payments accrued from the subsidiaries, separate from normal monthly payments for the delivery of tea.
The subsidiaries are; KTDA Management Services that deals with management of the tea factory companies in line with the recommendations made by the Tea Industry Taskforce of 2007; KTDA Power which is involved in power generation aimed at reducing the cost of energy for factories; Greenland Fedha which facilitates easy access to credit for farmers, and KETEPA, which is KTDA’s value addition arm that blends and packages tea for local consumption and export;
Others are Chai Trading Company Limited whose mandate is warehousing, blending, clearing and forwarding, value addition, export and general tea trading established to provide a modern workshop for fabrication and assembly of tea machinery for tea factories, and KTDA Foundation which focuses on corporate social investments.
These subsidiaries operate along the tea value chain by taking advantage of economies of scale to provide critical services to factories and farmers at competitive rates. The generated dividends are enjoyed by the factories and their farmers, and are reflected in the respective books of accounts.
The payment is over and above what farmers earn as monthly or initial payment.