Sanganyi Tea Factory Company Limited

Profile

1.Factory location:

(a) where it is situated: Kiabonyoru Location, Ekerenyo Division, Nyamira District, Nyanza Province.

The dominant community in the catchment are the Kisii of North and West Mugirango.

(b) latitude & longitude : 2200 metres above sea level

(c) distance from Nairobi: 315 kilometres west

2. Factory highlights:

(a) when it was built : 1981-Comissioning

(b) catchment & number of growers :  2899 Ha under tea, 18617 growers

(c) clones of tea grown :dominant clones: 6/8,31/8 and BB35

(d) community based projects:

3. Access roads:

(a) major highway: Kericho- Nyamira Highway

(b) feeder roads:

4. Geographical features:

mountains, ranges, hills, rivers, etc: The Kisii hills over – looking the Kano Plains and Lake Victoria

5. Climatic conditions:

(a) temperature

b) rainfall

(c) humidity

(d) altitude

(e) soils

6. List of current directors & top management;

Directors Area representing

1. Mr. Charles Arasa-Chairman Itibo Zone

2. Mr. Francis Ongwae-Vice Chairman Nyamusi Zone

3. Mr. John Bikondo -Member Mokomoni Zone

4. Mr. Jones Achanda- Member Ekerenyo Zone

5. Mr. Kennedy Agwata-member Nyabara Ibere Zone

6. Mrs. Mary Orwenyo-Member Nyaramba Zone

Top Management

1.  Mr.  Julius O. Oroko Factory Unit Manager

2. Mr.  Francis W. Wamae Production Manager

3. Mr.  Naftali  O. Shilenje Factory Accountant

4. Mr. John  P. Gitonga Field Services Coordinator

5. Mr. Polycarp Okora Field System Administrator

7. Unique aspects:

At the Highest Attitude  in the Kisii Region

8. Factory best known for:

9. First to: e.g. ISO certified, fair-trade, sustainable agriculture: implementation into Final ISO Certification on going. Implementing recommendations into Sustainable Agriculture.

Chairman's Report

CHAIRMAN`S REPORT FOR THE YEAR TO 30TH JUNE, 2012
I hereby submit the report on the performance of the company during the financial year to 30th June, 2012
CROP
Crop production for the year was lower than that of previous year. 11,504,074 Kilogrammes of Green Leaf were delivered for processing at the company's factory. Out of this throughput, 2,612,695 kilograms of made Tea was produced. This throughput and output were lower than last year's levels of 13,437,565 Kilogrammes and 3,145,022 Kilogrammes by 1,933,491 Kilogrammes and 532,327 Kilogrammes respectively. This achievement was at a conversion factor of 22.71 % which is equivalent to 4.40 Kilogrammes of Green Leaf to make one kilogramme of Made Tea.
TEA PRICES
There was a significant increase in tea prices during the year. The average price realised per kilogramme of made tea sold was Ksh. 272.46. This compares favourably with the price of Ksh. 240.25 in 2011.The prices, therefore, increased by Ksh. 32.21 per kg of sold tea. This year's price of one kg of made tea is equivalent to Ksh.61.92 per Kilogram’s of green Leaf.
MANUFACTURING COST
The manufacturing costs increased during the year. The total manufacturing cost for the year was Ksh. 138.49 for every kilogramme of made tea against the total manufacturing cost of Ksh. 115.71 per kg for the previous year. There was an increase in the manufacturing cost by Ksh. 22.78 per every kilogramme. This manufacturing cost includes monthly green leaf payment at Ksh. 55.12 per kg of made tea for the year which is higher than Ksh. 51.27 per kg for the previous year. This year's manufacturing cost was equivalent to Ksh. 31.45 per kilogramme of green Leaf as compared to previous year when the cost averaged Ksh. 27.08.
GREEN LEAF PAYMENT AND DIVIDEND
The company paid Ksh. 544,325,573/= to the farmers for the green leaf delivered during the year. This payment is lower than last year's payment of Ksh. 607,994,467/=. The Company managed to pay an advance or first payment of Ksh. 12.00 per Kilogramme of green leaf delivered for nine months and Ksh. 14.00 per kg for subsequent months in the period under review which is equivalent to Ksh. 55.12 per Kilogramme of made tea.
The Company made a second Payment of Ksh.151.69 per Kilogramme of made Tea. This is equivalent to Ksh. 34.00 per Kilogramme of Green leaf. The amount represents 4.62% increase compared to last year's rate of Ksh. 32.50 per Kilogramme of green leaf. The Board of the company recommends payment of dividend of Ksh. 2,755,640/= to all class ‘B’ Shareholders appearing in the Company's Share Register as at 30th June, 2012.
GENERAL INFORMATION
Sang’anyi has great potential of growth if all the registered growers deliver their green leaf to the factory. The decline in green leaf in the period under review compared to previous is attributed to the following factors: Tea hawking popularly known as ‘mangrito” Low fertilizer applications, neglected farms due to land disputes occasioned by land succession protocol and unfavorable weather conditions. Dangers of tea hawking should not be over-emphasized. It is obvious however if this goes on unchecked, the area will be faced with increased poverty and crime. More families will break up and children may not get proper and adequate education, and loss employment opportunities. This, therefore, calls for concerted effort from all the stake holders to ensure that the vice is eradicated from our midst once and for all, for the sake and survival of Sang’anyi Tea Factory. I am glad to report that the factory is Rain Forest Alliance certified. The Rain Forest Alliance is an international non profit environmental and sustainable development organization that works to conserve biodiversity and to ensure sustainable livelihoods by transforming land use practices and consumer behaviour. We have maintained and sustained the ISO certification requirements on food safety and quality management systems. We are through with the factory expansion and therefore past challenges on capacities are now behind us.
NYAKWANA HYDRO-POWER PROJECT
The appointed consultants from QUE Energy submitted a feasibility study report on Nyabunde site. The findings are positive with an initial proposal to generate 1.5 MW. Feasibility studies are in progress for the other sites. Sang’anyi equity contribution as at 30.06.12 towards this project is Ksh. 10,584,514/=. The required equity contribution is Ksh. 29,183,760/=.
CHALLENGES
Despite the significant role tea plays in the economic development of this country, the performance of the industry is faced with a lot of challenges, for example increasing costs of energy, labour and farm inputs.  Dangers of tea hawking should not be over-emphasized. Environmental degradation and decreasing farm sizes are a challenge to all stake holders. These have negative impacts of climate change. We encourage our farmers to get indigenous tree seedlings among others at subsidized prices from the factory for planting. Farm disputes, land subdivisions and neglected farms should be attended to as a way forward. This, therefore, calls for concerted effort from all the stakeholders to ensure that
the vice is eradicated.
FUTURE OUTLOOK
The future of the tea industry looks promising despite challenges. The Company has acquired 74 acres of land in Transmara of which 40 acres have been planted with trees for fuel wood during the period under review. This is one of the strategic measures the Company is taking to address the increasing energy costs and the progress is good.
SATELLITE
Following the resolution of the shareholders on  the need to construct a satellite that has indeed been long outstanding, the Board has authorized KTDA to speed up the process. Acquisition of the site (Kenyerere/Kea) is
in progress.
VOTE OF THANKS
On behalf of the Board of Directors I hereby wish to express my appreciation and gratitude to the staff of the Company, shareholders and growers who supplied green leaf to the company as well as the KTDA management for their good work which contributed to the success of the Company during the year under review.

RIPOTI YA MWENYEKITI YA MWAKA ULIOMALIZIKA TAREHE 30 JUNI, 2012
Ningetaka kuwatolea ripoti kuhusu matokeo ya Kampuni Katina mwaka ulioisha tarehe 30 Juni, 2012.
MAVUNO YA CHAI
Mavuno ya Chai katika mwaka yalikuwa chini ya yale ya mwaka uliotangulia.Kilo 11,504,074 za majani chai  zilipelekwa kutengenezwa katika kiwanda cha Kampuni.Kutokana na kiasi hiki cha chai, kilo 2,612,695 za chai iliyotengenezwa zilipatikana. Kiasi hiki kilikuwa chini ya kile cha mwaka uliotangulia ambacho kilikuwa kilo 13,437,565 za majani mabichi ya chai na kilo 3,145,022 za chai iliyotengenezwa na tofauti ilikuwa kilo 1,933,491 za majani mabichi na kilo 532,327 za chai iliyotengenezwa.Mapato haya kwa kibadilisho cha 22.71 kwa mia ni sawa na kilo 4.40 za majani mabichi ambayo yanatoa kilo moja iliyotengenezwa.
BEI YA CHAI

Bei ya chai ilipanda katika mwaka. Bei wastani ya chai iliyopatikana kwa kila kilo moja ya chai iliyouzwa ilikuwa Shillingi 272.46. Bei hii ilikuwa juu ikilinganishwa na bei ya mwaka uliotangulia ya Shillingi. 240.25 Kwa hivyo Kampuni ilikuwa na tofauti katika hizo bei ya Shillingi. 32.21 kwa kila kilo moja ya chai iliyouzwa. Bei ya chai iliyotengenezwa na kuuzwa katika mwaka ni sawa na Shillingi 61.92 kwa kila kilo moja ya majani mabichi.
GHARAMA YA UTENGENEZAJI
Gharama ya utengenezaji ilipanda katika mwaka na ilikuwa Shillingi 138.49 kwa kila kilo moja ya chai iliyotengenezwa. Gharama wastani ya mwaka uliotangulia ilikuwa Shillingi.115.71 na kwa hivyo tofauti ikawa Shillingi. 22.78 kwa wastani wa kila kilo moja ya chai iliyotengenezwa. Gharama ya utengenezaji imejumuishwa na ile ya malipo ya majani chai kwa mwezi ya Shillingi 55.12 kwa kila kilo moja ya chai iliyotengenezwa. Hii ilikua juu ikilinganishwa na ile ya mwaka uliotangulia ya Shillingi. 51.27 kwa kila kilo moja ya chai iliyotengenezwa. Gharama ya utengenezaji katika mwaka ilikuwa sawa na Shillingi 31.45 kwa kila kilo moja ya majani mabichi. ikilinganishwa na ile ya mwaka uliotangulia ya Shillingi 27.08
MALIPO YA MAJANI CHAI NA MGAO
Kampuni iliweza kulipa malipo ya kwanza ya Shillingi 540,325,573/= kwa majani chai ambayo ililetwa Kiwandani. Malipo haya yako chini ya yale ya mwaka uliopita ya Shillingi. 607,994,467/= .Kampuni iliweza kulipa malipo ya Ksh. 12 kwa kilo moja ya chai iliyotengenezwa kwa miezi tisa kufikia tarehe 31 Machi, 2012 na Shillingi. 14.00 kwa miezi iliyosalia. Kampuni ililipa marupurupu ya pili kwa kiwango cha Shillingi 34.00 kwa kilo. Kiwango hiki kilikuwa juu ya kile cha mwaka uliopita ya Shillingi 32.50 na asilimia nne nukta sitini na mbili. Baraza la wakurugenzi linapendekeza malipo ya mgao ya Shillingi 2,755,640/= kwa wanahisa wote wa class 'B' waliokuwa katika kitabu cha wanahisa cha Kampuni mnamo tarehe 30 Juni, 2012.
MAMBO YA DHARURA (CHANGAMOTO)
Gharama ya uzalishaji imeendelea kupanda kama vile mafuta, kawi na mishahara.Kudidimia kwa mazingira uuzaji rejareja wa majani chai mabichi na upungufu wa mashamba ni changamoto kwa kila muhusika. Ni jukumu ya kila mmoja kupando miti na kushungulikia jangaa hizo kwa juhudi ya kuendeleza kiwanda hiki. 
MATARAJIO NA MWELEKEO
Tutaendelea kuweka mikakati kabambe ili kuzuia changamoto zinazoikumba Kampuni kama ongezeko ili kuwapa wakulima mapato bora.Tuko na mipango ya kuhakikisha ya kwamba biashara yetu itaendelea hata siku za usoni. Nina furaha kuwajulisha ya kwamba Kampuni imenunua shamba ekari 74 huko Transmara na miti ya kutumia kama kuni imepandwa kwa shamba ekari 40 huko Transmara .Upanzi unaendelea mwaka huu kwa ekari 34.
MRADI WA KAWI-NYAKWANA
Utafiti unaendelea kwa sehemu zote ambazo zimetambulika kwa ajili ya mradi huu.Mtaji wa hisa ulioidhinishwa ni Shillingi 29,183,760/= kwa kila kiwanda.Sang’anyi imeweza kuchanga Shillingi 10,584,514/= hadi 30.06.12.
SHUKRANI
Kwa niaba ya Baraza la Wakurugenzi, ningetaka kuwatolea shukrani wafanya kazi wote wa Kampuni, wanahisa na wakulima wote walioleta majani mabichi ya chai katika Kampuni pamoja na wasimamizi wa KTDA kwa kazi yao iliyowezesha Kampuni kufanikiwa katika mwaka tunaoufikiria.
STEPHEN N.MESA

Corporate Social Responsibility

CORPORATE SOCIAL RESPONSIBILITY STATEMENT

Sanganyi is committed to supporting the development of communities among whom it operates business. Working with managers and other stakeholders across the region, Sanganyi offers support in areas of education, environment, water and sanitation, welfare and infrastructure improvements.

From the current financial year, Sanganyi has strengthened its ability to effectively support the communities by joining hands with other KTDA managed companies to form the KTDA Foundation, a charitable trust with the mandate to carry out community support initiatives. The Foundation is directed by the board of directors’; besides this initiative every factory has set aside Kshs 120,000 in their respective financial budgets to cater for unforeseen circumstances in their areas of jurisdiction. Corporate Social Responsibilities initiated by the factories will be undertaken in consultation with the Foundation.

Sanganyi has impacted the community around it by partially sponsoring bright and needy students in the catchment to recognized technical training colleges under the Directorate of Industrial Training Programme.

The company supports environmental conservation through the Rain Forest Alliance Initiatives by giving free tree seedlings to the community to plant to ensure conservation of biodiversity, continued improvement to water catchments and sustainable livelihoods by way of transforming land use practices and consumer behavior.

This has also been enhanced through the Farmers Field Schools, a programme that the factory has undertaken to train at their cost tea growers who deliver the green leaf to the station practical lessons in good farming practices.

The company participates in donations to areas stricken by natural calamities and disasters within our nation.

The company has undertaken measures to ensure that all roads within the catchment are accessible not just for the purposes of delivering tea to the factory but also boosting economic activities in the area by way of improved infrastructure.