Tea farmers will have an early Christmas after the Kenya Tea Development Agency (Holdings) declared a Sh734 million dividend.
The bonus is for the financial year ending June 30, 2020
This year’s dividend represents a 15 per cent increase from the previous year’s offer of Sh683 million.
It comes on the back of enhanced green leaf production over the same period which led to growth in total revenues for the year. KTDA said its newly established subsidiary businesses led to higher revenues.
KTDA Holdings Chairman Peter Kanyago also attributed higher revenues to increased tea sales volumes.
“Increased tea production led to high stocks at the peak of Covid-19 and exerted considerable pressure on working capital within the group,” he said in a statement. “The board has proposed a dividend of Sh734 million compared to last year’s Sh683 million, a welcome performance in a difficult year.”
He said the firm is addressing the cost of production to enhance the farmers’ earnings.
KTDA Holdings Group Chief Executive Lerionka Tiampati said the average cost of production had declined by 6.6 per cent on the back of effective cost-containment measures.
“The average cost of production reduced by 6.6 per cent from Sh88.98 to Sh83.09 per kilo, mainly driven by higher cost absorption from higher volumes and cost containment measures instituted,” he said.
Focus, noted Tiampati, will be placed on staff welfare, training and development and prudent financial management of each firm. Tea farmers under KTDA delivered 1.45 billion kilos of green leaf for the period under review, up from 1.13 billion kilos the previous year.
This translates to Sh79.0 billion in revenue from Sh69.8 billion last year.