A number of KTDA tea buyers and packers using the direct sales channel have embraced the usage of the Standard Gauge Railway (SGR) as it enhances logistical efficiencies and savings from the use of the railway to transport tea.
Nine tea factories managed by the Kenya Tea Development Agency (KTDA) have transported tea for export worth more than KShs 600 million using the Standard Gauge Railway (SGR) since May 2019; underpinning the continued commitment by KTDA and its factories to leverage on the Government of Kenya’s continued investment on infrastructure development.
The factories, Mungania, Ngere, Momul, Gacharage, Kapkoros, Makomboki, Motigo, Imenti and Kionyo, have used the SGR to transport over two million kilograms of tea to the market in a process known as ex-factory containerization.
Unlike the process where tea is taken to the auction in Mombasa, through Direct Sales,(DS) tea is processed, stuffed into containers for export at source (factory) and transported to the port of Mombasa without going to the warehouse, in a process referred to as ‘ex-factory containerization’. From the factories, the containers are ferried by road to the Nairobi Inland Container Depot (ICD) in Embakasi, where they are railed to the port using the Standard Gauge Railway (SGR) for export.
This process has led to enhanced efficiencies in the transportation of made tea to the market, with factories receiving payments much earlier for teas transported through this mode, compared to when tea is transported by road to Mombasa and sold normally after storage.
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Commenting on this, KTDA Management Services Managing Director, Alfred Njagi, said:
“Ex-factory containerization continues to be an increasingly preferable option for big packers that have direct sales arrangements with factories. Over and above being a more efficient method of transporting tea by cutting down on delays occasioned by road transport and warehousing, it has added advantages in that tea factories do not incur auction expenses such as warehouse storage and brokerage costs.”