News - Finlays

News
Head Office
Glasgow Office Outing
Tea Estates
Kenya Update Nev Davies
At the time I
prepared the last
update, Kenya was
recovering from a
severe drought which
had very significantly
reduced the
availability of all
grades of tea on the Mombasa auction.
By the end of March, production of leaf
tea had fallen to 45% of budget. There
was an upside to this, however, in that
prices returned to levels that had not
been experienced since the late ’90’s,
and although crop levels on the JF(K)
estates were well below budget,
nevertheless the good prices have more
than compensated for the shortfall over
the balance of the year. By late August
the much stronger tea supply position
in Mombasa had resulted in a fall in the
prices for all teas; however, they have
remained reasonably firm and at levels
better than budget. The JF(K) estates
have recovered well from the effects of
the drought, and production is now at
normal levels.
The old adage states that every cloud has
a silver lining but, in the case of JF(K),
some Estate Managers have come to
associate that ‘silver’ with hail. The
damage as a result of hail-stones has
been particularly bad this year, with
some areas being repeatedly subjected to
severe storms and hail damage. In years
gone by, attempts were made to reduce
the severity of hail damage by ‘seeding’
the storm clouds with microscopic
crystals, launched from sky-rockets, but
the cost of doing so usually exceeded any
benefit. The problem with hail is that it
affects everything from a pluckable shoot
down to a new bud; it takes about two
months for a shoot to form from a new
bud.
As a strategic response to the long-term
trend of falling tea prices, rapidly
escalating labour costs and a stubbornly
strong Kenya Shilling, the decision had
been taken to significantly expand the
area being mechanically harvested. On
the one hand, this offered an opportunity
to significantly lower costs of production,
but the programme has not been without
its challenges. Although the Company
The Full Finlays!
Glasgow staff (l-r)
Pat Lockett, Duncan
Gilmour, Kerr Napier
and Peter Stabler
strut their stuff at the
office outing to a local
adventure centre on
25 August.
had repeatedly stated that employees
would not be made redundant as a result
of this change of policy, unfortunately
this development was interpreted by
various parties as being against the best
interests of the Government and the
Trade Union movement. Fortunately, this
issue has now been amicably resolved
and the mechanisation programme is
being successfully introduced.
A very thorough study has been
completed, which revealed that the
estates do not have sufficient reserves of
eucalyptus to provide the renewable
energy requirements for the future needs
of the Kericho-based businesses. JF(K) has
now embarked on a five-year programme
which will see a large area of the old, lowyielding
tea replaced with eucalyptus.
Some of the old tea will be replaced with
new varieties of high-yielding clonal tea,
to ensure an adequate supply of leaf to
both the black tea factories and the Tea
Extracts Division. The clonal tea is much
better suited to mechanical harvesting,
and this advantage provides a much more
attractive return on the very significant
investment required.
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