The Kenya Tea Development Agency (KTDA) is setting up a committee of experts to manage the separation of satellite accounts from their parent factories. This committee, expected to be in place by the end of the week, will provide guidelines for 17 satellite factories seeking independence, ensuring protection from potential economic challenges.
KTDA Holdings Chair Enos Njeru, speaking at a press conference earlier this week, highlighted that the separation process would be executed carefully to maintain the economic stability of both the parent and satellite factories. Currently, two satellite factories—Chelal, aiming to separate from Litein, and Toror, planning to split from Tegat Tea Factory Limited—have agreed to proceed with the split.
“The separation of accounts between satellite and parent factories will start in the 2024/25 financial year, beginning with the payment of Greenleaf and the second payment,” Njeru stated.
He added that satellite factories would pay dividends to their parent companies according to policies approved by their boards, compensating the parent companies’ shareholders for their investments.
The satellite separation process commenced last week, with KTDA Group CEO Wilson Muthaura leading a tripartite meeting chaired by Agriculture Principal Secretary David Ronoh and attended by the Tea Board of Kenya. This meeting focused on the roadmap for account separation.
“KTDA will hold further consultative meetings next week with the directors of the factory companies owning the 17 satellite factories to discuss the matter,” Muthaura said.
Richard Rono, Chairman of Litein/Chelal, confirmed that farmers had agreed to the separation of the satellite factories from their parent companies. “We are taking the first step in this process and will proceed cautiously, following the guidelines to avoid any future consequences,” Rono said.
