Small scale tea farmers will this month smile home with dividends amounting to Kshs.649 million for the financial year ending June 30, 2020.
Kenya Tea Development Agency (KTD) holdings and affiliate companies said dividends will be reflected directly in farmers payslips, separate from the normal monthly payments for the delivery of tea.
“In observance of corporate governance rules, the pay slips farmers will receive from their respective factory companies will now show the actual dividend payments accrued from the subsidiaries, separate from normal monthly payments for the delivery of tea,” said KTDA.
KTDA pays dividends to farmers accruing from the operations of its subsidiaries, which operate along the tea value chain by taking advantage of economies of scale to provide critical services to factories and farmers at competitive rates.
In a statement released early in June, the Agency refuted claims that there have been no dividends received by factories and tea farmers from their investments in KTDA Holdings and its subsidiaries in the recent past.
It further said its annual audited accounts is proof that dividends have consistently been paid to its shareholders who are the factory companies.
“The tea factories, through resolutions of their directors, have resolved to pass the dividends received from KTDA holdings directly to the farmers who are the shareholders of the tea factories that own KTDA Holding Ltd,” read part of the statement.
The subsidiaries include KTDA Management Services that deals with management of the tea factory companies in line with the recommendations made by the Tea Industry Taskforce of 2007; KTDA Power which is involved in power generation aimed at reducing the cost of energy for factories; Greenland Fedha which facilitates easy access to credit for farmers, and KETEPA, which is KTDA’s value addition arm that blends and packages tea for local consumption and export;
Others are Chai Trading Company Limited whose mandate is warehousing, blending, clearing and forwarding, value addition, export and general tea trading; Majani Insurance Brokers which was established to provide insurance brokerage services for tea factories and KTDA Group companies; Tea Machinery & Engineering Company Ltd – established to provide a modern workshop for fabrication and assembly of tea machinery for tea factories, and KTDA Foundation which focuses on corporate social investments.
The subsidiaries operate along the tea value chain by taking advantage of economies of scale to provide critical services to factories and farmers at competitive rates.
“The payment is over and above what farmers earn as monthly or initial payment.” Continued KTDA.
The generated dividends are enjoyed by the factories and their farmers and are reflected in the respective books of accounts.
KTDA claimed that over the last five years, factory companies have received more than Sh3.7 billion in dividends from KTDA and its subsidiaries’ business activities, the amounts having been previously consolidated.
Different subsidiary companies are governed by different regulatory institutions in the country, based on the different sectors and regulatory regimes.