Almost a dozen smallholder tea factories are seeking to dispose off parcels of land acquired in the last one decade to produce wood fuel to power boilers.
The acquisition of the land spread mostly in semi-arid areas was seen as a cheaper solution to their power needs as the factories diversified from using furnace oil-powered boilers to those fired by wood fuel.
Smallholder tea factories subsequently became high consumers of wood after they phased out furnace oil powered boilers for production of steam for leaf withering and drying.
But after a decade of experimenting with producing own wood fuel, the factories are moving on to a new diversification model and many are stuck with hundreds of acres of land that can’t recoup the original purchase price.
Worse still, some of those parcels of land are yet to produce any wood one decade later even though they were supposed to have been planted with fast maturing Eucalyptus trees.
Yesterday, three Kenya Tea Development Agency (KTDA) factories became the latest to separately re-invite bids for purchase of such land.
Mataara TF, which is in Gatundu North in Kiambu County, advertised for sale some 106.47 acres at Karai village in Naivasha, Nakuru county.
Nyeri’s Chinga factory invited bids for some 86.8 acres in Segera in Munyaka area of Laikipia county while Embu’s Rukuriri factory invited bids for some 71 acres at Rwika area in the same county. The earlier bids by some of the factories are said to have been unresponsive and far below the original purchase prices.
On November 17 last year, Ndima factory in Kirinyaga also floated bids for its 200 acres in Kihato area in Laikipia County. On the same day, some 101 acres in Maruriri area in Mbeere, Embu County was advertised for sale by Mununga factory which is also in Kirinyaga county.
Directors of some of these factories said although the factory shareholders had approved the sale of the forestry plots, the biggest hindrance was getting bids that would recoup the initial cost leave alone making any markups.
Representatives of farmers of one factory in Murang’a County were shocked recently when a tour of some of their land investment in the neighbouring Nyandarua county revealed sheer plunder of their proceeds.
“One of the farm belonging to our factory that we visited and measuring over 150 acres was a pure rocky outcrop with no soil to plant any tree. Not even acacia,” tea farmer Crowther Mwaganu said.
At Gathuthi factory in Nyeri, which purchased three farms totaling 140 acres at Mweiga area (68 acres), Pesi in Nyandarua (30 acres) and Kiawara in Laikipia (42 acres), a director said the last farm will soon be put up for sale because it was not suitable for growing wood as it was in a dry area and was rocky.
“It is over 10 years since this purchase and no trees have ever been harvested in that farm. It has some patches which are completely rocky,” said the director speaking in confidence.
But some factories such as the seven in Meru region appear to have invested wisely and recouped their costs.
The investments are the 1,512-acre Mwingiki farm near Timau owned by Kionyo, Kinoro, Weru, Githongo and Imenti factories while Kegoi and Michimikuru factories invested in their separate smaller plantations at Kimongoro and Amugaa farms in the north of the county.
Kenya Union of Smallscale Tea Owners (Kussto) secretary general Mugambi Nkanata said the wood farm venture by the Meru factories was above board and a worthy investment all having completed the first harvesting of mature eucalyptus.
KTDA Holdings chairman David Ichoho said the agency was helping factories which have decided to dispose unproductive land to get the best value from the transactions.
Ichoho blamed the previous team of directors for the mess, admitting these are some of the issues identified by forensic audits at the factories ordered by the government last year.
He said the two main problems identified with the land deals was that previous directors of some factories had purchased land in climatic zones where fuel wood trees could not be grown commercially or had purchased completely rocky plots.
“While for now I can say with certainty that the claims by some factories that the procurement of some of this land had some impropriety, these are some of the issues we have isolated and are pushing the Directorate of Criminal Investigations (DCI) to probe and if necessary take action to recover farmers money,” added Ichoho.
The audit was ordered by then Agriculture Cabinet Secretary Peter Munya.
“We want an audit firm that hasn’t done business with KTDA before to conduct a forensic audit on its books of financial accounts both at headquarters and at individual factories,” the CS said.