Kapchorua Tea records 27% profit surge to US$3M 

KENYA – Kapchorua Tea, a Kenyan agricultural plantation firm, has reported a 27 percent rise in profits to KES399.4 million (US$3M) for the financial year ending March 2024, up from KES314.5 million (US$2.4M) in the previous year.  

This surge in profits is attributed to improved production and a weaker shilling, despite ongoing challenges at the Mombasa tea auction. 

Revenue from tea sales also increased significantly, standing at KES2.19 billion (US$16.98M) compared to KES1.7 billion (US$13.2M) recorded the previous year.  

The company saw a 44.5 percent increase in tea production, with total output rising to 8.69 million kilograms (kgs) from 6.01 million kgs.  

This growth was largely driven by the completion of Kapchorua’s factory expansion, which enabled the firm to process and purchase more green leaf from smallholder farmers. 

“The factory expansion concluded and reported on last has enabled Kapchorua to purchase significantly more green leaf from small holder farmers than in previous years resulting in a record crop for the farm,” said Kapchorua in the 2024 annual report. 

The firm’s own-grown tea production grew from 1.73 million kgs to 2.2 million kgs, while green leaf purchases from smallholder farmers rose to 6.48 million kgs, up from 4.27 million kgs the year before. 

Kapchorua’s recent factory expansion, which included additional withering space, a new processing line, and expanded sorting and packaging facilities, played a key role in the company’s record production levels.  

The firm said that the additional processing would allow Kapchorua to take more green leaf during the heavy cropping months rather than limiting intakes to previous capacities benefiting the farmers and the company. 

Despite the strong production and revenue figures, the company sold 7.316 million kgs of tea during the period, leaving 1.375 million kgs unsold.  

The company cited backlogs at the Mombasa tea auction as a key factor, noting that many unsold teas, including those from the Kenya Tea Development Agency (KTDA), have strained the auction system. 

“To further complicate an already difficult situation the unsold, reprinted KTDA teas, often 50% of the Mombasa auction offerings are, along with many other teas, being sold in an auction that is currently unfit for purpose,” the firm said. 

Following the results, Kapchorua declared a final dividend of KES15 (US$0.12) per share, paid out on September 2, 2024.  

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