Feasibility Study TET TEA FACTORY
Transcript of Feasibility Study TET TEA FACTORY
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TET TEA FACTORY COMPANY LIMITED
F E A S I B I L I T Y S T U D Y.
Done By:
J.K.A. Koech / R. Koech,Weldon Korir.
P.O. Box 27, Kericho
20200.
Cell: 0722 668 755; 0722 07 200e!"#il: $oel%oech&'#hoo.co" Pri(#)e #nd con*iden)i#l
December 2010
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1.2. +e# Proce44in....................................................................................................2
1%. F/nnc/ E#)/on.................................................................................................2
1-. Econom/c E#)/on.................................................................................................26
1. Sen'/)//)y In$/c)or' ................................................................................................26
16. Im&emen))/on Sc*e$#e..........................................................................................23
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1. -=-C>+?AR@ .
1. Tet tea Factory Company limited intends to invest inthe establishment of a tea Facto! in "im#lot Division
of $omet Co#nt!.
%. Total estimated val#e of the investment is "shs. %&'(
)))(&&& *T+o h#nded and nine million fo# h#nded
and fot! fo# tho#sand shillin,s-.
. The /o0ect +ill be nanced b! E2#it! contib#tion
fom shaeholdes( /omotes and nancie3state,ic
/atne as identied b! the diectos of Tet Tea
Factory Company limited.
). The feasibilit! st#d! eveals that the /o0ect +ill bin,
in /ots in the st !ea of o/eation and contin#es
to be /otable even afte the si4th !ea of o/eation.
5. The /o0ect has ,ood economic benets to its
shaeholdes and the comm#nit! ao#nd the location
of the /o0ect. This incl#des a diect em/lo!ment of
65 /eo/le and a s#stainable coo/eate ta4
emittance.
7. The et#ns on both the E2#it! and the Investment
ae 2#ite ,ood and s#stained b! a ,ood 8o+ of cash.
6. The /o0ect is technicall! feasible( economicall! viableand nanciall! so#nd and sho#ld bes#//oted.
9. Tet Tea Facto! Com/an! limited( in collaboation+ith thestate,ic investo( has identied all the machine!(
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e2#i/ments and mateials necessa! fo immediateim/lementation of the /o0ect.
'. The const#ction of the facto! /lant +ill commenceas soon as the Tea $oad of "en!a iss#es a
man#fact#in, license to Tet Tea Facto!
2. B#c%ro3nd .
9The Tet Tea Factory Company Limited, a company limited by shares, was founded in
2009.Her directors, shareholders and promoters have been involved in tea farming,
fabrication, assembly and maintenance of tea Machinery in various tea factories in East
frica for over thirty years. The directors of Tet Tea !actory "ompany limited would
li#e to invest in tea manufacturing facility, value adding of tea and in the mar#eting of
finished products in both local and international mar#ets.
9bThe government encourages investment in tea sub$sector since Tea processing,
pac#aging and mar#eting was liberali%ed in &992. This liberali%ation meant opening the
tea sector to various investments at various sections of the tea sector. However certain
regulatory procedures issued by the Tea 'oard of (enya )T'(* as stipulated in the Tea
ct, must be met before and during operations in any investment on Tea. These
regulations covers various categories in Tea handling such as in Planting,
Manufacturing, Value addition, Marketing, Tea Estate management, Warehousing,
research Etc. +hile fulfilling the regulations reuired by the Tea ct, Tet Tea !actory
"ompany -imited would li#e to use this window of opportunity to invest in a tea
manufacturing factory.
9cTet Tea factory company limited directors, shareholders and sponsors has a rich
bac#ground on tea operations and would li#e to use their eperience for further
development in tea operations by investing in a manufacturing factory. This pro/ect will
entail the building of a factory, acuisition and assembly of state of the art tea
manufacturing machines and facilitating the purchase of green leaf from the sponsors
and uppliers of green leaf for conversion to blac# tea and specialty tea products.
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9$This pro/ect appraisal eamine in details the viability and feasibility of Tet Tea !actory
company1s vision setting up of a tea processing factory to be located in (onoin district
in the 'omet "ounty in ift valley province.
. on4or4 o* )he Pro$ec).
a* The pro/ect is to be sponsored by3
i* +e) +e# #c)or' Co"#n' i"i)ed: This is a company limited by shares and
incorporated in (enya under the company ct )"ap.456*. 7t is run by a board of
8irectors elected periodically. )ee &&en$/; 11 cer)/(/c)e o( /ncor&or)/on.
ii* "#ll 4c#le +e# *#r"er4: These are the suppliers of the raw materials to the factory.
They have also been offered shareholding in Tet Tea !actory limited.
iii* in#ncier/4)r#)eic #r)ner: Tet Tea !actory "ompany -imited has invited a strategic
partner to fill the shortfall in the financing of the pro/ect. The engagement will be based
on agreed Euity contribution.
iv* O)her 4h#reholder4:
These are drawn from the general public who may not necessarily be suppliers of green
leaf. Their input will be based on purchase of shares.
b S&on'or' E
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. e)#il4 o* +e) +e# #c)or' direc)or4.
Mr. Me)e) /&!oec* enne)*5 5 C*/rmn o( )*e Bor$ o( D/rec)or'5 Te) Te Co.
L)$.
(enneth is a graduate of Maseno niversity in 'achelor of cience in Horticulture.
He wor#ed with M: ulmac, a horticulture firm in ;aivasha in (enya before venturing
in to private agri$business.
He is result oriented personality, easily accessible and a team builder. He currentlymanages family tea and real Estates.
He is also a chairman of small scale tea farmers supplying green leaf to +illiamson Tea
"ompany in (ericho. He is the current lead trainer for t%, !air trade and ain !orest
certification of small scale tea farmers. He will be a big asset to Tet Tea !actory "ompanylimited in harmoni%ing Tea uality procedures and welfare of the community with
international standards.
Mr. D/$r S 8#n,n5 -/ce=C*/rmn o( )*e Com&ny
8idar is a Mechanical Engineer by profession. He has over
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Mr. Rober) C*er#/yo) Me)e)5
obert is a graduate of niversity of ;airobi in ?uantity urvey and Management. His
profession will be an asset to Tet Tea !actory limited in the management of resourcesduring the construction of the factory. His management s#ills will also be useful in the
design and placing of management systems and controls. obert is one of the small scale
tea farmers who will supply Tet tea !actory with green leaf. He will ta#e care of theinterests of small scale tea growers in the board.
Mr. In$er,/) S 8#n,n5 -1
7nder/it is a 'ritish citi%en and a Mechanical Engineer by profession. He has gainedsubstantial eperience in tea machineries relating to the design, fabrication, uality
control and installation. His international eposure in tea and tea machinery technological
advancement will be very beneficial to Tet Tea !actory. He is also a founder member of Tealand @roup of companies.
5. Ad(i4or' #nd Coordin#)in +e#".
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Tet Tea Factory Company limited has contracted the following team of three individuals to
provide advisory services. They will also coordinate the pro/ect starting from the feasibility
study until si months after the commissioning of the pro/ect.
9 Re*m/ . oec*: 7s a certified public accountant, has a bachelor of commerce from
;airobi niversity currently pursuing the final year in M' in the same university. He has
wor#ed in management position with ;ational housing corperation, 7ndustrial commerce
8evelopment "orporation )7"8"*, (enya ;ational Trading "orporation )(;T"* and now
wor#s with (enya 7nstitute of public policy esearch uthority )(7==*. He speciali%es in
uditing. He has been a national chairman of otary club among many other public
engagements.
b >e$on or/r3 is a certified public accountant with many years of service with nilever
limited. An retirement with nilever, he has been engaged in private business which includes
tea farming and service provision to Multinational tea companies in (ericho. +eldon has a
rich bac#ground in management and control of accounts. ome of the ma/or assignments has
been in sales collections mar#eting strategies, construction of unit accounts, setting and
managing !inancial controls, Eecutive reporting, appraisal of new pro/ects and their
implementations and evaluation.
9c ?oe .A.oec*: career manager of over
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Managing Balue adding pro/ects for specialty mar#ets.
7nstallation and =resentation of factory1s good Manufacturing practice )@M=* for
eternal udit.
Training assignments under !uture !orce Training "onsultancy "ompany.
He has etensive training in various fields both locally and in .(.
He will oversee and coordinate the implementation of the entire pro/ect of Tet Tea
factory company -imited.
6. ei4l#)ion.
1. Te Ac) 9C& 4 n$ Te 9L/cen'/n"5 Re"/')r)/on n$ Tr$e Re"#)/on'5
2006.This act generates the several regulatory reuirements in detail in the Tea sub sector of
the (enyan economy.
The directors and shareholders of Tet Tea Factory Company Limited
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are confident that they will satisfy all the reuirements and demands of the ct and
be able to obtain the various licenses from the Tea board of (enya for the intended
investment. standard form " is attached as appendi &2.
2. @)/on en/ronmen) mn"emen) A#)*or/)y 9@EMA:
Tet Tea !actory directors have an elaborate policy on environment, attached as
appendi &
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98#mn Re'o#rce.
i-"lo'"en) cre#)ion The pro/ect is epected to create C direct employment
opportunities with a multiplier effect of over 20 to give over 1000 indirect
opportunities for inhabitants of the area. (onoin and the greater (ericho districts has
plenty of eperienced and professional wor#force in tea processing in want of
immediate employment and Tet Tea !actory would li#e to tap into this available
human resource.
9//+c/n": This 7nvestment in a factory demands that the positions of both
management and directorship will be occupied by persons of high integrity and
professionalism. Tet Tea Factory Company Limited are already aware of this
prereuisite and will therefore put up rigorous engagement procedures for recruitingand placing of staff in both management and directorship. dditionally strict controls
procedures and modern professional management systems will be instituted to govern
this investment accountably and more so transparently.
9/// Mn"emen) In(orm)/on 'y')em: =laced human resource would reuire a
comprehensive computeri%ed management system as operational assistance.
The directors of Tet Tea Factory Company Limited are #een in putting in place
modern management information systems for use in running, monitoring, controlling
and evaluating every aspect of this investment instantly and periodically. This will
include the installation of security surveillance cover.
.
9/ Mn"emen) ')r#c)#re and Numbers:
Chaiman
Chaiman
Chaiman
12
:eneal Mana,e *1-
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;#man
*1-
Pesonnel
Assistant ? e c t i o n
; e a d s * 1 & - Technical
Assistant *-
Data Ent!
Cle> *)-
?toe
Cle> *1-
Facto!
En,inee *1-
: e n e a l F a c t o ! @ o > f o c e *)-
?ale
Cle
Tans/ot
Assistant
!actory unit
manager &
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(b)General ana!er: This is +ill be the chief e4ec#tive of the com/an!
and is es/onsible fo the da! to da! #nnin, of the facto!. ;e +ill be
e/otin, to the $oad of Diectos on the /efomance of the facto!.
(c) Factory "nit mana!er: ;e +ill be in cha,e of facto! o/eations
that cove /od#ction and /lant mana,ement. ;e +ill be assisted b! a
facto! en,inee( t+o shift mana,ement assistants and a eld e4tension
sevices assistant .;e +ill be e/otin, to the :eneal Mana,e.
(d) #ersonnel and administration ana!er: ;e +ill be in cha,e of all
/esonnel and administation mattes that incl#de facilitation of
em/lo!ment( /lacin,( tainin,( ,ovenance mattes( sec#it!( tans/ot
8eet mana,ement and /oc#ement. ;e +ill be e/otin, to :eneal
Mana,e.
(e)Factory $cco"ntant: ;e +ill be incha,e of all facto! acco#nts
e/otin,( sales acco#nts( stoes administation( and data ent!.
8. Prod3c)ion:
/ Te &ro$#c/n" re':
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The ma/or Tea producing areas include former districts of (ericho, ;a#uru, ;andi,
(isii, ;yamira, (iambu, (irinyaga, ;yeri, Muranga, Meru, Thara#a, ;ithi,
;yambene, Mt Elgon, 'omet, Bihiga, Tran%oia and now Transmara.
// +ro$#c)/on /n ono/n 5Bome) co#n)y:
The location of the proposed Tet Tea factory will be (onoin in 'omet "ounty where
there are si other factories which manufacture tea from small scale growers. The
8istrict has all agronomical and climatic factors which favors tea growing in all
seasons.
The sponsors of Tet Tea !actory are among those currently supplying green leaf to the
si factories in the %one. However, the eisting factories cannot cope with the volume
of leaf available throughout the year and especially in pea# seasons. The pea# season
normally starts in pril and continues into early >anuary with a clima in ;ovember
:8ecember.
This bottlenec# in factory capacity has given room to informal transfer of leaf to other
manufacturing facilities far away from the farmers1 area of operation. !urthermore, the
informal green leaf transfer gives the farmer erratic and low income i.e. the farmer is
not adeuately rewarded for both the ?uality and the ?uantity of leaf he produces.
This has impacted negatively on improvement of yields and on the desired epansion
programme by the growers. They believe that by supporting Tet Tea factory they will
get access to farm etension services that can translate to better yields and to improved
factory capacity that can encourage them to epand their area under tea.
7n answer to the wishes of the sponsors )green leaf suppliers* Tet tea !actory -imited
will set up systems that will ensure the farmers are well rewarded for their efforts in
the supply of both uality and uantity of @reenleaf at all times.
The factory will also wor# with the farmers by providing etension and advisory
services.
Tet Tea !actory "ompany limited will also, on behalf of the farmers, connect with
other sta#eholders e.g. Tea esearch !oundation, elevant government departments
and other gencies to ensure the sponsors do not lac# behind in relevant information
and latest technological advancement
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. Con43")ion.
9 Loc con'#m&)/on: The production of tea in 20&0 stood at total of three hundred
and ninety eight and a half )
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Tea is allocated to registered bro#ers contracted to each producer for purposes of
obtaining the highest price of tea for each of their clients. The bro#er doubles up as
security in the collection of proceeds from sales for the account of their clients. 7t
should be noted that this process is long and epensive but secure. Tet Tea Factory
Company limited while using this outlet, will eplore other outlets that would
minimi%e the supply chain.
9bD/rec) /n!"e o#)e):
This outlet is referred to as !orward contracts or 8irect ales through =rivate Treaties
for both local and international mar#ets
Most consumers and distributors are now moving into direct lin#ages with the first
line producers. This will bring the benefit of maimi%ation of product uality, pricing,
identity, and traceability. Moreover, most consumers of commodity products
worldwide have rising awareness on social responsibilities and would li#e to
participate directly in the social development of the communities producing products.
Tet Tea Factory Company Limited would develop and identify themselves with these
group of end users of tea.
c#c)or' #)e 4#le4 o3)le):
8irect @ate ales to a multiplicity of buyers at the factory gate either for local
distribution or consumption or for repac#ing for resale is a recent mar#et opening in
the country.
The consumption of tea in the country is still very low compared to rise in population
)a scanty half a #ilogram of tea per person annually*. There are various companies for
both branded and strait teas from multinational, local companies and upcoming small
tea pac#ers engage in this sector of the mar#et and yet the local demand for uality
tea is still low. The value addition such as flavored teas, ready to drin# tea, etc. are
largely undeveloped and the country depends largely on imports for this category of
tea. Through consistent production of good uality product and innovative mar#eting,
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the Tet Tea Factory Company Limited epects to enter into this high premium
flavored tea mar#et.
11. Po)en)i#l #r%e) O3)le)4.1 .Br#nded )e#:
Tea sales to the foregoing mar#ets are serviced almost eclusively with bul# eports
9#nbrn$e$ and therefore sub/ected to rewor#ing elsewhere before it reaches the
end consumer. This unnecessary long supply chain erodes substantial income that
would have benefitted the producer.
The rewor#ing and re $handling of tea before the end consumer not only
compromises uality but also ma#e the tea lose its original identity.Tet Tea Factory Company Limited would li#e to develop branded teas with consistent
uality for both local and international mar#ets. This will be possible with partnership
where necessary with other mar#eting partners.
2.
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7t is should be noted that very small amount of tea are value added at the country of
origin before eporting. This robs the farmer )primary producer* the premium price
that is associated with value addition. Tet Tea Factory Company Limited plans to add
value to part of its Tea products before releasing to the mar#et. 7t is anticipated that
pac#eted teas, flavored teas and ready to drin# Teas will with time be produced by Tet
Tea !actory limited.
. -"erin "#r%e)4
The nited tates, "anada and ustralasia despite their big purchasing power are
not ma/or tea consumer but tea is beginning to gain popularity. 7t should be noted
that there is a growing 8iaspora population emigrants from tea drin#ing and
growing regions that could assist in the introduction of Tea drin#ing in these
countries. 7t is gratifying to note that our Tea 'oard of (enya has also identified this
window of opportunity for mar#eting (enyan Tea as in their TE ;E+ issue of
Actober : 8ecember 20&0. High premium mar#ets such as ;orth mericas >apan
and ustralasia are still lowly developed and yet there is a considerable influ of
immigrants from tea drin#ing countries to these areas. Tet Tea Factory Company
Limited would develop mar#eting channels for its range of product in these areas.
This would ta#e the engagement of the population 8iaspora to /ump start the
mar#eting operations in those regions..
9bThe Middle East and the entire Muslim world is a very important mar#et for
(enyan Tea and its potential is yet to be optimi%ed. The !ar East$ >apan, "hina, and
ussia have a big potential, which is yet to be eplored by the tea producers in
(enya.
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12. Pricin )r3c)3re4 .
The current mar#et price for processed tea is '* 260 per #ilogram in the local
mar#et and '* 220 for eport and the sponsors will retain and even improve on these
price levels. The real value of this price levels is heavily dependent on the strength of
(enya shilling against the dollar. Tea is auctioned in Mombasa in 8ollar.
7t should be noted that that prices of tea are normally set in reference to the prevailing
levels at the Tea auctions which varies every wee#. Tet Tea Factory Company Limited
will negotiate regularly with consumers for dynamic and progressive changes in price.
The negotiated price would be much improved from auction prices .This is possible on
selling direct to the consumer on a forward contract. The company will therefore avoid
the current long chain of middlemen as much as is practicable.
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1. i4)ri93)ion: The blac# tea will be distributed through the following Autlets3
i Re)#iler4:
This will be to the supermar#et chains both locally or internationally3 This will gather
for the bul# of the value added Teas. The supermar#et chains are currently spreading
their influences across the country and their direct collaboration with producers is
being developed. This is an area the Tet Tea Factory Company Limited would li#e to
maimi%e on.
ii irec)l' 4#le4 )o con43"er4
This is locally referred to as factory gate sales which will ensure speedy delivery to
individual consumers. Tet Tea factory company limited will establish a sale
distribution system locally..
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9/// Momb' A#c)/on:
This would ta#e substantial volume of loose teas from Tet Tea factory "ompany
-imited.
1. oc#)ion o* )he ro$ec) #nd #))end#n) 3)ili)ie4:
9/Loc)/on:
The pro/ect will be located in (onoin district in 'omet "ounty. The area
has good soil, adeuate rainfall, and good supply of labor force that has
supported tea growing.
9//T*e '/)e $e'cr/&)/on:
9 The land parcel for the factory site has been identified, surveyed and the
process of acuisition is complete. pplication for transfer are attached as
appendi 1.
9bThe parcel of land is fronted by a permanent water spring that will be the
source of sufficient water to the facility.
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9c7t is situated within two hundred meter distance from a developed mar#et
centre supplied with water,
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9/ roer'&&/cn)' re"/')er:
Ser/@o.
@me Acre' ID @o. T/)e Dee$ Re"/')r)/onn#mber'
& Musa (iplangat otich &00 &602
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ammy "hep#wony C0 &29&C4C6 (er:(im:249
5 nnah " "hep#wony 20
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that are convenient and cost effective. 7n particular, use of briuettes made from
agricultural wastes e.g. bagasse or tea waste will be evaluated.
!urnace oil, coal or electricity are not cost effective but a standby facility will be installed
for use in dare emergency only.
.
ii -ner' 4o3rce *or "#chiner' #nd lih)in need4: The prime mover for machines will
be electric energy sourced from (enya =ower and -ighting "ompany. However, there
will be a standby generator to gather for unepected power interruptions.
16. +e# Proce44in.
9 8re')/n" n$ +#c!/n" /n )*e Frm':
The final uality of tea in a cup depends on the genetic composition of the leaf, the
agronomic practices, pluc#ing standards and the handling of the pluc#ed leaf. The
=luc#ing of tea is meticulously done to ensure that only the upper two leaves and a bud
are pic#ed.
Tet Tea Factory Company limited will provide Etension services to the farmersI ensurethe farmer get access to information and technological advancement to ensure good
gricultural practice is upheld at all times.
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9b Fc)ory +ro$#c)/on:
Recei(in o* reen le#*:
?uality assurance of green leaf is done at the receiving bay in the factory by a process
called leaf count. The inspection of green leaf ensures that only the best uality of leaf will be manufactured and poor uality leaf is re/ected.
The green leaf is also weighed and recorded. Tet Tea Factory Company Limited will
invest in computeri%ed digital scales lin#ed to various terminals users.
9c >/)*er/n" ')"e:
The green leaf once in the factory is spread on to large troughs by the green leaf labor.
The large troughs are fitted with reversible low pressure fans to assist in removal of moisture from the leaf. The target is to remain with a moisture content of 6C$0F. This is
referred to as =hysical wither. The leaf stays in withering troughs for a period of
between &2$&6 hrs to allow for the necessary biochemical reaction in the leaf. This is
referred to as chemical withering . Tet Tea Factory Company limited plans to invest inwithering troughs complete with motori%ed fans. These troughs are available and ready
for installation by our strategic as soon as a manufacturing license is issued.
9 #cer#)ion:
Maceration process is the stage where semi permeable membrane in the leaf is rupturedand distorted allowing the /uice and the sap to be mied in the presence of oygen. This
commences the chemical changes necessary for blac# tea production through the process
of oidation. The green leaf color changes to golden brown. There are many systems of
maceration of green leaf depending on the targeted end product. Tet Tea Factory limited plans to initially invest in one line of modern "T" macerating machines. This will be
followed later with other types of machines. These "T" machines are readily available
e Jstoc# from our strategic partner in (ericho.
9b er"en)#)ion )#e:
The fermentation is the most distinguishing uality factor in blac# tea processing. 7t is at
this stage that most important properties of tea ualities of tea are produced. The leaf is
#ept here for about 90$&20 minutes under strict temperature controls between &5$26 0 ".
t the end of this duration, the fermented leaf attains a bright copper brown color. The
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=rocess demands machinery that allow free flow and abundant oygen to reach every
particle of macerated leaf in the allowed fermenting time. There are several types of
fermenting euipment but the most preferred for consistent uality is "ontinues!ermenting ystem. Tet Tea Company plans to install a modern "ontinuous !ermenting
ystem commonly referred to as 7ntelligent "ontinuous !ermenting ystem.
9c r'in roce44:
This is the stage where heat energy is used to dry Tea with a moisture content of 6CF
reduced to below
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eparated blac# tea, referred to as primary grades, is conveyed into a fibro screen with
layers of different sieves with various holes si%es. The fibro screen separates granular
si%es into grades as below and their percentages3
'ro#en =e#oes )'= &* &0 F
=e#oe !annings )=!&* 60 F
=e#oe 8ust )=8* 20 F
8ust & )8* C F
=rimary grades are all conveyed to the storage bins.
The fibrous teas are conveyed to a sorter that separates si%e particles into secondary
grades. These are3
Fnn/n"' 9F 1 2
D#') 9D 2
Bro!en M/;e$ F/ber 9BMF 1
ll sorting machines are readily available in (ericho for immediate purchase andinstallation by Tet Tea Factory Company Limited.
9$ )or#e #nd P#c%in:
The biggest percentage of tea will be pac#ed in large consignment for sale and Eport .7tis therefore necessary to store made tea in large uantities before pac#ing.
=roperly designed bins will be installed in Tet TE factory for storing particularly the
primary grades which constitute over 9CF of the total production.
econdary grades of tea are normally floor bul#ed before pac#ing for the mar#et.
o):. -#ch 4)#e o* "#n3*#c)3re h#4 Dell 4e) E3#li)' #r#"e)er4,
con)rol4 #nd record4 %e) *or )he 3ro4e o* E3#li)' #443r#nce #nd
)r#ce#9ili)' o* )he rod3c). +e) +e# *#c)or' l#n4 )o in(e4) in "odern
E3#li)' #443r#nce eE3i"en) rele(#n) )o e#ch 4)#e o* "#n3*#c)3re.
0
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17. Pro*i)#9ili)' #nd in#nci#l -(#l3#)ion
a* Any'/' o( &ro(/) n$ o'' (orec'):
si year forecast has been tabulated and shows that progressive profits are
reali%ed from the pro/ect from the first year of operation.
8etails of the pro/ection are tabulated in &&en$/; 6 attached.
b* C'* (o Any'/': =roceeds from sales are reali%ed within three months of each
production and this will well sustain the cash reuirement for the pro/ect. The
cash reuirement will only be a challenge in the first three months of operations
and this will be provided for in the initial wor#ing capital. 9'ee &&en$/; 10.
1
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c* A Bnce '*ee) See A&&en$/; 3.
d* 7)*er': A&&en$/ce' 1 )o 1- con)/n o)*er nece''ry &or)r/)' o( )*e
&ro&o'e$ &ro,ec).
e* >or!/n" c&/): 7t is anticipated that once the factory is commissioned cash
remittance from tea sales will ta#e three months to be reali%ed. wor#ing capital
of #shs.5 million has been set aside for operations during that period.
18. -cono"ic -(#l3#)ion
/ The proposed unit will create direct permanent employment for at least C
individual and over
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1. en4i)i(i)' ?ndic#)or4 #nd )heir "i)i#)ion.
The sensitivity analysis has been performed to assess the viability of Tet Tea !actory "o.
-td. under unforeseeable changes and the current assumptions. The sensibility of issues below can be as low as CF change and calls for stringent controls to be set in place.
!i" Decre'e /n )e &r/ce' re/Gbe /n )*e mr!e): This comes as a resultof drop in uality or worldwide mar#et forces of demand and supply. s
mentioned earlier Tet Tea factory will set up systems that would guarantee
uality at all times. TT!"- also intends to put up forward mar#etintelligence and contracts that would guarantee a premium sale price
return over her own original estimates and the prevailing Mombasauction price level.
!ii" Incre'e /n )*e co') o( &ro$#c)/on: stringent management and systemcontrols with alarm indicators will be set up in all areas of operations.
!iii" Decre'e /n (c)ory "reen e( )*ro#"*): This is a volume basedindicator and any downward trend in the supply of green leaf will
negatively impact on use of assets and hence unfavorable condition on
dilution of fied costs. Tet Tea !actory "ompany limited will ensureconsistent supply of raw materials and high level of efficiency in
machinery maintenance and human resource management. 7t should also
be that value addition is part of Tet factory1s strategy and this is epectedto bring in sales premium even with low factory throughput.
!i#" !#c)#)/on' /n E;c*n"e r)e': part from local sales, all teas are sold inforeign currencies and predominantly in ..8ollar. strong (enya shillings
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will 7mpact negatively on Eport sales whereas a wea# shilling will bring
more cash volumes into the business.
The above has sensitivity as at CF change but adverse effect will be more profound at
&0F negative change. The 8irectors of Tet Tea factory company limited fullyunderstand these challenges and have program in place to success fully face up to
these challenges.
e)#il4 o* +e) +e# #c)or' direc)or4.
Mr. Metet (ip#oech (enneth, ames !inlay )(*-td.* in their tea plantations and factories. He has been mainly involved in the research
and development of new varieties of tea machineries. He is all round trained on tea
production and uality control
Mr'. Born/ce So/5 %4
4
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he is an astute educationist and a devoted farmer. he is also an established and
respected business lady based in (ericho with substantial interests in real estate and
agriculture
Mr. /r& S 8#n,n5 -4
Mr. ( Hun/an is a Mechanical Engineer and has been involved ma/orly in the designand fabrication of tea and coffee machinery but more widely on tea
Mr. Rober) C*er#/yo) Me)e)5 1
obert is a ?uantity urveyor:Management by profession and will be an asset in the #ey
elements of the design and contract management of the pro/ect
Mr. In$er,/) S 8#n,n5 %3
7nder/it is a 'ritish citi%en and a Mechanical Engineer by profession. He has gainedsubstantial eperience in tea machineries relating to the design, fabrication, uality
control and installation.
T%
T&e mana!in! Director '
Tea Board of enya'
Tea Board o"se'
*ai+as&a ,oad-o. *!on! ,oad'
#/%/Bo0 1224-22122'
*$I,%BI -5*6$/
1t& arc& 12/
Dear adam'
,5F : $pplication for tea man"fact"rin! license for Tet tea
factory /
%
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,efer is made to yo"r TB8T9D8C%*F1 dated 2t& 9eptember 122 on
t&e abo+e application for a license/
5nclosed' please ;nd:-
(a),eport on 5n+ironmental Impact $ssessment as done by
Greanei cons"ltants/(b)Copies of letters of commitment by t&e !ro
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