Nairobi, Kenya, October 4, 2012 —
IFC, a member of the World Bank Group, today announced an investment of
$12 million (about Ksh1 billion) to support the operations of Kenya Tea
Development Agency [Holdings] Ltd. KTDA will use the loan to build a 200,000-square-foot
warehouse to store tea and other commodities in Mombasa.
The new warehouse will increase the capacity
of Chai Trading Company, a subsidiary of KTDA, to store more tea from KTDA’s
65 factories across the country, while eliminating the need to hire additional
The loan was signed by Jin-Yong Cai, IFC’s
Executive Vice President and CEO, and KTDA [Holdings] CEO Lerionka Tiampati,
at KTDA’s head office in Nairobi.
Cai said, “IFC’s investment in KTDA will
not only optimize business for KTDA, but will increase revenues and living
standards for the smallholder farmers, whom the company represents. The
new warehouse in Mombasa will also create employment opportunities for
KTDA’s local suppliers and distributors.”
Tiampati said KTDA warehouses in Mombasa
currently handle about 300 million metric tons of made tea annually that
is transported from the tea factories across the country.
“While this represents the bulk of our warehousing
business, there is increasing demand for warehousing space from other clients.
This has necessitated an expansion of our existing 600,000 square foot
of warehousing space by an additional 200,000 square foot that will be
built through IFC funding,” Tiampati said.
The new facility will enable Chai Trading
Company to expand its warehousing business, thereby increasing the return
to the farmer. The more than 560,000 smallholder farmers who supply tea
leaf to the factories are also shareholders in the 54 factory companies
which own KTDA [Holdings] Ltd, and therefore any profitable business venture
ultimately benefits them.
Tiampati pointed out that KTDA’s business
diversification strategy had seen it expand its investments along the value
chain, which has now received a major boost from the IFC.
Cai said IFC is committed to investing in
local companies like KTDA which will help develop Africa’s agribusiness
value chain. The new facility will also boost KTDA’s business with
other entrepreneurs who provide packaging and transportation services.
Tiampati noted that as KTDA’s varied
businesses grow and farmers produce more tea, the demand for warehousing
space will increase. “We are already witnessing increased demand for warehousing
space and are planning ahead to accommodate this growth,” he said.
The ultra-modern warehouse will maximize
on the utilization of space and meet all international warehousing standards
for storage of food products and other commodities, Tiampati said. IFC
will support KTDA on adopting innovative green building standards in the
Tea exports contribute over $1 billion
annually to foreign exchange earnings for Kenya and benefits over 4 million
people, or 10% of the Kenyan population.
Earnings by small-scale tea farmers affiliated
to KTDA reached an all-time high this year with a payout of $533 million
(Ksh45.3 Billion), up from $477 million (Ksh40.5 Billion) paid to the farmers
The agribusiness sector is a key strategic
priority for the IFC, as it employs a large percentage of Africa’s labor
force, and has a strong impact on small and medium-sized enterprises. During
fiscal year 2012, IFC invested $550 million in African agribusinesses.
About the KTDA Group
KTDA (Holdings) Ltd is a private enterprise
that manages a total of 65 tea processing factories located across all
of Kenya’s tea growing counties, through its subsidiary, the KTDA (Management
Services) Ltd. The factories are owned by 54 Tea Factory Companies, whose
shareholders are the more than 560,000 small-scale tea farmers who are
also the suppliers of the leaf.
KTDA [Holdings] Ltd has the following subsidiaries:
KTDA (Management Services) Ltd, Chai Trading Company Ltd, Majani Insurance
Brokers, Greenland Fedha Ltd, and a microfinance company, KTDA Power Company
Ltd, Kenya Tea Packers (KETEPA) Ltd and the KTDA Foundation.
For more information, visit www.ktdateas.com;
or email firstname.lastname@example.org
IFC, a member of the World Bank Group is the largest global development
institution focused exclusively on the private sector. We help developing
countries achieve sustainable growth by financing investment, mobilizing
capital in international financial markets, and providing advisory services
to businesses and governments. In FY12, our investments reached an all-time
high of more than $20 billion, leveraging the power of the private sector
to create jobs, spark innovation, and tackle the world’s most pressing
development challenges. For more information, visit www.ifc.org.