How scaling down of operations by tea multinationals will hit you

Some of the tea shades that were vandalised and set on fire by protestors at one of the Ekaterra Tea estates in Kericho County on May 22, 2023. [Courtesy]

The suspensions and scaling down of operations by multinational tea companies in Kericho and Bomet counties will lead to losses amounting to billion of shillings, and impact on the dollar inflow.

Players in the tea industry now want the government fail to tame continued arson attacks in the South Rift region.

Kenya Tea Growers chairperson Silas Njibwakale yesterday revealed that following the suspension of operations, Ekaterra Tea company sent home 16,000 workers for an indefinite period of time.

The workers who solely relied on the company for a living, he said will not be paid for the period the company will not be operating.

KTGA in a statement on Tuesday revealed that Ekaterra, formerly known as Unilever Tea, had suspended operations with other multinationals scaling down following the rise in insecurity and continued attacks on multinationals.

Large-scale tea producers as per the statement had incurred a loss of Sh170 million following a wave of arson attacks targeting tea harvesting machines.

On Monday irate youths burned four tea harvesting machines and tea-holding shades belonging to Ekaterra.

The protesters also attacked Ketepa offices and vandalised an ATM machine and made away with tea leaves.

In October 2022 ten two-man-held (TMH) tea harvesting machines were set on fire at the Chebown tea estate owned by Ekaterra.

One week ago 200 youths invade Chemasingi tea Estate owned by James Finlay tea estate in Konoin Sub-county in Bomet County. During the incident, a police vehicle was torched.

Njibwakale revealed that for each day Ekaterra does not work one million kilograms of tea is not collected.

The one million kilograms he said is about 230, 000 kilograms of black tea.

"Approximately Sh80 million a day is lost with the suspension and scaling down of operations by multinationals," said Njibwakale.

The KTGA chairperson said most companies are operating under fear and optimal performance is not there.

He revealed that close to 10, 000 small-scale farmers affiliated with Ekaterra will have their earnings reduced due to interrupted tea delivery.

The country he revealed will lose millions in tax and statutory deductions affected.

Tea companies in Kericho he said are the biggest producers of tea in the country.

He noted that tea buyers will be forced to run to other countries to look for the product.

"The suspension will cause a serious panic in the Mombasa Tea Auction. Cargill, the largest buyer of tea, and the buying arm of Ekaterra is the biggest buyer on the auction and if they withdraw the auction will not be supported hence affecting the dollar inflows significantly," he said.

He added that the worst will happen if Cargill withdraws from buying, prices at the auction will collapse because they are the biggest buyers.

The dollar inflows to the country he added will also be affected.

"The auction generates about 42.5 million dollars (approximately Sh5.8 billion) in a week. If the insecurity in the two counties is not dealt with the impact on the economy is going to be huge," he said.

Njibwakale called on President William Ruto to intervene and have the issues facing multinationals addressed.

In Kericho, business owners continue to feel the effects of the insecurity.

Bernard Soi, one of the directors of the vast Kipchimatt franchise, which includes a supermarket in Brooke trading center, expressed concern about the impact of the riots on the livelihoods of approximately 3,000 workers, including both permanent and casual employees.

"The aggression against Eketerra has forced our workers to stay at home, leading to the closure of businesses. As long as the demonstrations continue, we estimate a daily loss of at least Sh4 million in sales," he said.

Brooke trading center, located in the Ainamoi constituency, has been the focal point of street battles between the police, who were dispatched to protect the Eketerra headquarters, and unruly youths aiming to destroy and loot the multinational tea firm.

Soi attributed the invasion of tea estates and the destruction of Mechanized Tea Harvesters to reckless political statements targeting large-scale tea producers.

"Politicians should refrain from incitement and instead focus on creating new job opportunities, rather than letting the youth resort to tea plucking as their only means of earning a living," he said.

Kericho Boda- Boda chairman Edwin Koros, said the at least 300 boda-boda business operators whose stage is in Brooke had begun to feel the pinch of the ongoing riots.

"Each of them usually makes an average of Sh700 per day but there are days like on Wednesday when local roads were barricaded forcing the customers to postpone their journeys or talk a walk and thus the boda-boda riders' income took a huge slump," he said.

Koros added that some of his members jumped into the riots with eleven of them placed under arrest by the police and six others injured during the fracas with the police deployed to protect Ekaterra headquarters and tea estates

"We are yet to find out whether the suspects joined the protests on their own or there is a force behind the participation of a section of the boda-boda riders in the mayhem," he said.

The Kericho boda-boda operators leader argued that politicians' previous statements encouraging the youths to pluck tea bushes belonging to the tea companies bordering the local community are what precipitated the full-blown violence.

"Politicians' words are taken to heart by some people. When such individuals know that have political backing nothing can stop them from doing anything," said Koros.