Despite one of the toughest years in global tea markets, the Kenya Tea Development Agency (KTDA) says the smallholder tea system is proving its strength, offering renewed hope for farmers and signalling a brighter future for the sector.

Speaking at the 2025 KTDA Directors Conference at Safari Park Hotel, the Group CEO Wilson Muthaura said that although the past year brought significant headwinds, including falling global prices, a stronger shilling, and high operational costs, the smallholder model continued to display exceptional resilience.

Green leaf production dropped by 12.1 per cent due to low rainfall, and made-tea volumes dipped by 11.55 per cent. Yet, in a remarkable show of strength, factories sold 319 million kilograms of made tea—a 10 per cent increase from the previous year.

“This is the strength of the smallholder system. Disciplined operations and optimised processes enabled us to deliver strong results even under immense pressure. The task ahead is to convert this operational resilience into sustainable profitability,” ”the CEO said.

While acknowledging the difficult operating environment, the CEO urged directors to view the moment not as a setback but as a springboard for transformation.

“Adversity brings clarity and forces transformation. Our focus remains firm: stabilise performance, enhance operational efficiency, and unlock new, reliable revenue streams for the long term,” he noted.

He emphasised that digital transformation will be central to KTDA’s revival and future growth. The full rollout of EWS Phase II across all 71 factories and the installation of 69 weighbridges have significantly reduced leaf collection inefficiencies. The SAP system is also deepening transparency, data accuracy and real-time reporting.

“Digital adoption is the heartbeat of our competitiveness. It empowers us to make faster, smarter decisions,” he stated.

On the farmer-focused agenda, the CEO highlighted ongoing sustainability efforts, including the replacement of moribund tea bushes with climate-resilient cultivars, and income diversification through avocados, livestock and other ventures supported by the KTDA Foundation. KTDA’s membership in the UN Global Compact, he added, positions the organisation as a responsible, future-facing global player.

“When the farmer thrives, KTDA thrives,” he affirmed.

Mixed performance

Performance across KTDA subsidiaries was mixed, but with notable bright spots. Chai Trading experienced a decline driven by forex losses, while Ketepa made a strong turnaround from loss to profitability.

KTDA Power posted higher profit before tax supported by new revenue streams, and Majani Insurance maintained stable performance.

“The message is clear: synergy and diversification are no longer optional; they are strategic imperatives that will define our next phase,” the CEO said.

He also underscored KTDA’s strengthened governance framework, which includes tighter enterprise risk management, stronger audit processes and enhanced conflict-of-interest compliance. These measures, he said, are vital for protecting assets, building investor confidence and maintaining the trust of farmers. “Good governance remains our anchor,” he affirmed.

The CEO further reiterated the importance of people and culture in shaping KTDA’s transformation journey. Investments in digital capability, leadership development, performance structures and accountability are reshaping KTDA into a modern, agile and farmer-centric organisation.

“Our people remain the centrepiece of KTDA’s transformation. With the right talent and culture, we will achieve remarkable growth.”

Ending on a strong note of optimism, the CEO told directors that KTDA stands at a pivotal moment, one filled with challenges but rich with opportunity.

“Resilience will carry us forward,” he said. “Together, we will strengthen our governance, deepen digital transformation, grow our subsidiaries, and secure the prosperity of the smallholder tea farmer for generations to come.”

The annual conference brings together KTDA directors from across the country to set priorities and chart a unified strategic path for the year ahead.