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Kenya Tea Development Agency (KTDA) has set up a committee of experts to oversee the separation of satellite accounts from their parent factories.

This committee, expected to be established by the end of the week, will provide guidelines for 17 satellite factories to follow when seeking independence from their parent companies, ensuring they are protected from potential economic challenges.

Speaking at a press conference earlier this week, KTDA Holdings chair Enos Njeru emphasized that the separation process would be handled carefully to safeguard the economic stability of both the parent and satellite factories. So far, two satellite factories—Chelal, which seeks to split from Litein, and Toror, which plans to separate from Tegat Tea Factory Limited—have unanimously agreed to move forward with the split.

Tripartite meeting

“The process of separating the accounts between satellite and parent factories will begin in the 2024/25 financial year, starting with the payment of Greenleaf and the second payment,” said Njeru.

“Satellite factories will pay dividends to their parent companies in line with policies to be approved by their respective boards, compensating the parent companies’ shareholders for their investments.”

The satellite separation process began last week, with KTDA Group CEO Wilson Muthaura holding a tripartite meeting chaired by Agriculture Principal Secretary David Ronoh, and attended by the Tea Board of Kenya. The meeting focused on the roadmap for account separation.

“KTDA will hold further consultative meetings next week with the directors of the factory companies that own the 17 satellite factories to deliberate on the matter,” Muthaura said.

Richard Rono, chairman of Litein/Chelal, confirmed that farmers had agreed to the separation of satellite factories from parent companies. “We are taking the first step in this process, and we will proceed cautiously, following the guidelines to avoid any future consequences,” said Rono.