Tea factories directors on spending spree as farmers' earnings shrink

Audio By Vocalize

Last month, the smallholder tea factories at KTDA simultaneously announced their second payment rates, unlike in the past when it was staggered over two weeks.

The hidden story was what it had cost farmers to make the announcement simultaneously. Whereas part of the announcements would be made after meetings in factory boardrooms or zonal offices, this year the East of the Rift Valley zone directors retreated to tourist hotels in Naivasha for four days.

All this happened in a year when farmers earned some of the lowest rates since 2020.

While it is a worry to the farmers, it is this carefree spending inspiring many directors to protect their seats by any means. Directors' expenses have risen rapidly in recent years. A look at the financial statements of a few companies gives a clear picture.

Mataara Tea Factory in Thika reported a turnover of Sh1.2 billion in 2025, down from Sh1 .6 billion in 2024. But directors’ fees, expenses and trainings/education tours was over Sh24 million and Sh21.7 million in the two years respectively.

Neighbouring Ngere Tea Factory, with Sh3.3 billion turnover in 2024 and Sh3.1 billion in 2025 spent Sh19.1 million and Sh23.3 million, respectively, to care for its directors. This curiously included over Sh1.1 million each year for managing agents' meetings. In both years, Mataara spent over Sh6.1 million on farmers' training and education tours, while Ngere used Sh12.9.

Chinga in Nyeri, which made Sh2.33 billion and Sh2.29 billion in the two years, spent Sh26.2 million and Sh30.6 million on directors' expenses across the two years.

At Theta Factory in Gatundu South, the 2025 spend on directors was Sh30.6 million, which included Sh9.2 million as income taxes and government expenses, while Sh27.6 million had been utilised in 2024.

This shows that a factory is spending between Sh19 million and Sh30 million an year on its six directors. That is as high as Sh2.5 million or Sh416,000 per director monthly.

A KTDA regional manager said factory boards have disregarded their advice. “We are now just simply toothless in reigning in on the directors. They claim to have the mandate of farmers and the final say.”

Before, meetings were held at factories or zonal offices, limiting mileage claims, and were capped at two meetings a month.

Last year, a Tea Board of Kenya audit found that directors at one factory in the Rift Valley had held over 100 meetings in a year; an average of eight meetings a month or two each week.

Another grey area is award of tenders to construct orthodox teas processing lines. Chinese speculators have in the last decade, targeted factories with inflated offers sweetened by a promise to purchase the produce.

“This is one of the main reasons why factories like Githongo have dipped considerably in rates paid to farmers. They are stuck repaying bank interest debts. There is simply no much market for orthodox teas,” says Paul Gitonga, former factory chairman.