Feasibility Study TET TEA FACTORY

8/9/2019 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

1

mailto:[email protected]:[email protected]


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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.

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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.

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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.

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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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Feasibility Study TET TEA FACTORY

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