In a strategic move to diversify its product portfolio and increase returns for tea farmers, the Kenya Tea Development Agency (KTDA) is pursuing Ksh10 billion in financing from banks.
The funds will be used to expand orthodox tea production lines across 32 of its factories that are currently producing black CTC tea.
KTDA recognises the potential of specialty orthodox teas in the global market, which command significantly higher prices compared to traditional black CTC.
For instance, a kilogram of orthodox tea can fetch over Ksh1,000, while black CTC tea typically sells for up to Ksh300 per kilogram.
“In pursuit of our management mandate and to maximise returns for tea farmers, KTDA has embarked on product diversification through the installation of orthodox tea processing machinery,” said KTDA.
“KTDA-MS, on behalf of the managed tea factories, is inviting proposals from potential lenders for the provision of financing to roll out orthodox tea plants and automated withering systems in an additional 32 factories. The financing facility required is approximately Ksh10 billion or its equivalent in dollars.”
The agency has already installed 11 lines of orthodox tea processing machinery in select factories, and it now plans to integrate new production units within its existing factories, which primarily produce black tea.
Last year, KTDA sought a Sh800 million grant from the government to expand its production lines for high-value specialty tea in response to surging demand in the international market.
The agency reported receiving six-month upfront orders from international buyers as the popularity of specialty tea continues to grow worldwide.
This loan request represents one of the largest financing initiatives by KTDA in recent years. In the previous year, the agency secured a Ksh15 billion loan from various banks to disburse a controversial early bonus to farmers shortly before the 2022 General Election.
Orthodox teas are whole-leaf teas processed using specialised machinery, employing a delicate method of gradual rolling and drying to create various twists and styles.
Interested financiers are encouraged to submit their proposals for this project by October 24, 2023.