KTDA embarks on journey to increase value addition, raise g****l market share

Kenya Tea Development Agency (KTDA) plans to invest heavily in tea value addition and specialty tea production as part of increasing its share in the international market.  

In its current business strategy, value addition, enhancing specialty tea production and diversification feature prominently aimed at boosting farmers earnings.

Wilson Muthaura (pictured), KTDA Chief executive said the agency in its current business plan, targets specialty teas production and enriching the produce to meet global standards as key drivers to expanding its share in the global tea market in the next five years. 

 “Our focus is to deepen footprints in the international market by increasing tea value addition. This requires putting more investment in new and current efforts to achieve the same,” he said in an interview with the Business Hub in his office. “Despite us producing quality and exporting bulk tea, we haven’t invested more in value addition in order to have a bigger share in the international market,” he added.

The value addition will be accompanied by exploitation of specialty tea production.  Kenya is the global leader in the export of bulk Black Cut Tea and Curl (Black CTC) followed by Sri Lanka and India. 

However, tea value addition in the country stands at less than 10 per cent compared to other tea producing countries in the world.

Despite Kenya holding nearly one third of the bulk black tea global market, Sri Lanka’s tea enjoys more attractive prices than Kenya’s because of their value-addition and domination of the orthodox tea sales which fetched higher prices.

Muthaura noted that efforts will be directed to develop brands that meet international market consumption requirements. President William Ruto when touring Mt. Kenya region early this month assured farmers that government is fast-tracking an initiative to enhance tea value addition in order increase farmers’ earnings.  “The government plans to achieve the same through increasing to at least 40 per cent in the next five years subject to meeting an annual target of at least five per cent,” he said.

In 1979, KTDA established the Kenya Tea Packers (KETEPA) to undertake value addition.  In the first decade, the company enjoyed 100 per cent share of the local market, but the market share has declined to 36 per cent as at end of December 2022.

 Significant presence

A situation the agency also explained was aggravated by licensing of more packers which to date stands at 200 packers.

But despite the decline in the market share locally, Ketepa value added teas have continued to enjoy significant presence in some segments of the global market.

These include Somalia at 29 per cent, US (22 per cent), Sudan, UAE, Tanzania and Zanzibar each enjoying 10 per cent respectively. Other market destinations of the Ketepa value added tea include United Kingdom, Angola and Japan. 

“Our focus is to have a competitive advantage in terms of exporting superior brands as part of the bigger strategy to increase farmers’ earnings,” he added.

Muthaura said specialty tea mainly orthodox fetches high prices above Black CTC in the global market and are consumed mostly in countries enjoying high gross domestic product (GDP) such as Russia, Continental Europe and Arab region.