Mombasa-based
businessman David Lagat is setting up a Sh249 million tea factory in
Nandi, stepping up competition for the green leaf in the region which is
dominated by the Kenya Tea Development Agency (KTDA) and multinational
companies.
The factory, which will process CTC black tea, will have one production line with allowance for future expansion.
The plant will be a subsidiary of the DL Group owned by Mr Lagat who has other tea processing companies in Kericho.
KTDA and multinationals such as George Williamson control a big share of the green leaves market in Nandi region. Multinationals have about 19 factories while KTDA has two.
Mr Lagat, who also has interests in shipping, owns Koisagat Tea Factory in Nandi.
Tea processors have been investing heavily and diversifying their products to compete with upcoming rivals.
For
instance, KTDA is expanding three of its factories that process purple
and orthodox tea which is in high demand and fetches more money compared
with traditional black tea.
Tea farmers affiliated to
the agency earned a record Sh84 billion from leaves delivered this
season, marking the second year of improved earnings helped by a stable
exchange rate and high pricing of the commodity in the world market.
The
record earnings placed Kenya at position one in terms of payments to
farmers among major growing nations, having paid growers an overall
average of Sh50 per kilogramme, followed by Sri-Lanka at Sh48.
In
the 2015 ranking, Sri-Lanka was placed first having paid its farmers
Sh49 per kilogramme compared to Kenya’s Sh41 for the same quantity,
placing the country in position two.
Kenya is the leading exporter of the commodity in the world. It sells 95 per cent of its tea to the world market.
A
National Environment Management Authority report says the proposed
factory will have several positive impacts including provision of
employment during construction and operational phases of the project.
Others
are boosting the local economy, provision of market for construction
material sellers, and source of revenue for both the central and county
governments.
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