Ragati Tea Factory Company Limited

Chairman's Report

CHAIRMAN’S REPORT FOR THE YEAR ENDED 30 JUNE 2012
I hereby submit the report on the performance of the company during the financial year ending 30th June, 2012.
CROP
Crop production for the year was higher than that of the previous year. Slightly over twelve million nine hundred thousand kilograms of green leaf were delivered for processing at the company's factory. Out of this amount of green leaf 3,142,395 kilogrammes of made tea was produced. This throughput was higher than last year's levels of 10,727,661 kilogrammes and 2,702,555 by 2,225,791 Kgs and 439,840 Kgs respectively. This achievement was at a conversion factor of 24.26% which is equivalent to 4.12 Kgs of Green Leaf to yield 1kg of made tea.
MADE TEA PRICES
There was a marked increase in tea prices during the year. The average price realized per kilogram of made tea sold was Ksh 280.06 compared to a price of kshs.249.41 in 2010/2011.This price translates to Ksh. 67.98 per kg of green leaf for the year under review.
MANUFACTURING COST
The average manufacturing cost for the year was Ksh.78.45 for every kilogram of made tea against the average manufacturing cost of Ksh.67.66 kg for the previous year. There was an increase in the manufacturing cost by Ksh.10.79 per every kilogram of made tea. This manufacturing cost includes monthly Greenleaf payment at Ksh. 51.22 per kg of made tea for the year which is higher than Ksh.47.63 per kg for the previous year .This year's manufacturing cost was equivalent to Ksh.19.03 per kg of green Leaf as compared to previous year when the cost averaged at 17.04 per kg of Greenleaf.
GREENLEAF PAYMENT AND DIVIDEND
The Company was able to make a payment to the farmers of Ksh.674,683,518 for the 12,953,452 kilograms of Greenleaf. This payment is higher than last year's payment of Ksh. 526,549,475 made for 10,727,661 kilograms of Greenleaf. The company is however pleased to note that the rate of payment to the farmer amounts to ksh.40.00 per kilogram of green leaf as compared to Ksh 37.10 per kilogram of green leaf in respect of the year 2010/2011. The board of the Company further recommended that payment of an interim dividend of 2.5% be paid as initial and final dividend to all shareholders appearing in the Company's share register as at 30th June 2012. A total sum of Ksh 1,882,797 is payable to the shareholders of the Company by way of dividends 
FUTURE OUTLOOK
The company continued to register improved profitability and growth, resulting from continuing strategies and measures, put in place to enhance product quality, cut down costs, boost incomes and improve our competitive capabilities in the tea markets. The first quarter of the financial year under consideration saw frequent fluctuations of the shilling against the major hard currencies, with exchange rates more stabilising later in the financial year. This trend played a major role in shaping level of sales income and cost of imported goods and services supplied to the Company.
As I mentioned in the last financial year, the Company continued with its replacement and modernization policy meant to enhance efficiency in made tea production. Notable investments were done both plant & machinery and the leaf carrier fleet. Next year, the Company will purchase an additional Continuous Fermentation Unit and a Steam boiler. Energy utilization efficiency continued to receive attention during the financial year and am happy to announce that currently there is in place a clear masterplan which if implemented together with future energy usage audit recommendations, will go along way in enhancing efficiency and cost savings. Firewood supply sustainability and the ever rising cost of securing this important input continues to pose a challenge. As the Company nears complete establishment of trees in the entire Luisoi
wood fuel farm coupled with the concurrent efforts to source for more suitable fuel wood land at an affordable cost, farmers are urged to compliment the Company’s efforts and plant more wood fuel trees on their farms. Apart from the positive effect on the environment, the wood will be purchased by the company as is currently the case. The introduction of Farmers field schools in the financial year 2010/2011 and the subsequent trainings on Sustainable Agriculture programmes has enormously contributed to better crop husbandry thus greater production despite the inevitable land subdivisions which have hitherto continued to impact negatively on tea production. I appreciate the positive contribution, these
programmes have made especially in creating awareness on better crop husbandry, the greater land use practices, environmental protection and social change. I urge the farmers to continue to engage the company’s extension services and relentlessly put the skills and knowledge acquired in the aforesaid programmes to boost their farm output and returns. In line with global market requirements trends, the company after rigorous implementation phases underwent the Rainforest/UTZ audits and received the relevant certifications. This will go along way in boosting the general acceptability of the company’s products in the competitive world market. Proper recruitment and training of staff are receiving special attention in the company. Towards this end, the company will continue to undertake restructuring of leaf collection staff and administrative cadres.
All the above taken together will help transform the company into a modernised and efficient tea factory able to make better biannual returns to the farmer
VOTE OF THANKS
Finally I wish to record my appreciation to the Board of Directors, Management and the entire staff body for their tireless efforts in making the company realise improved financial results and
better returns to the farmer.

RIPOTI YA MWENYEKITI YA MWAKA ULIOMALIZIKA 30 JUNI 2012
Ningetaka kuwatolea ripoti kuhusu vile Kampuni ilivyofanya katika mwaka ulioisha tarehe 30
Juni, 2012.
MAVUNO YA CHAI
Mavuno ya Chai katika mwaka yalikuwa juu ya yale ya mwaka uliotangulia. Zaidi ya kilo milioni kumi na mbili nukta tisa zilipokelewa kwenye kiwanda. Kutokana na kiasi hiki cha chai, mbichi kilo 3,142,395, za chai iliyotengenezwa zilipatikana. Kiasi hiki kilikuwa juu ya kile cha mwaka uliotangulia ambacho kilikuwa kilo 10,727,661 za majani mabichi na kilo 2,702,555 za chai iliyotengenezwa na tofauti ilikuwa kilo 2,225,791 za majani mabichi na kilo 439,840 za chai iliyotengenezwa.Mapato haya kwa kibadilisho cha 24.15 kwa mia ni sawa na kilo 4.12 za majani mabichi ambayo yanatupatia kilo moja ya chai iliyotengenezwa.
BEI YA CHAI
Bei ya chai ilipanda katika mwaka. Bei wastani ya chai iliyopatikana kwa kila kilo moja ya chai iliyouzwa ilikuwa Ksh. 280.06 ikilinganishwa na Ksh. 249.41. Bei ya chai iliyotengenezwa na kuuzwa katika mwaka ni sawa na Ksh.67.98 kwa kila kilo moja ya majani mabichi.
GHARAMA YA UTENGENEZAJI
Gharama ya utengenezaji katika mwaka ilikuwa Kshs. 78.45 kwa kila kilo moja ya chai iliyotengenezwa. Gharama wastani ya mwaka uliotangulia ilikuwa Ksh.67.66 na kwa hivyo tofauti ikawa Ksh 10.79 kwa wastani kwa kila kilo moja ya chai iliyotengenezwa.Gharama ya utengenezaji imejumuishwa na ile ya malipo ya majani chai kwa mwezi ya Ksh 51.22 kwa kila kilo moja ya chai iliyotengenezwa ambayo ilikua juu ikilinganishwa na ile ya mwaka uliotangulia ya Ksh. 47.63 kwa kila kilo moja ya chai iliyotengenezwa.Gharama ya utengenezaji katika mwaka ilikuwa sawa na Kshs 19.03. kwa kila kilo moja ya majani mabichi ikilinganishwa na Ksh.17.04 ya mwaka uliopita.
MALIPO YA MAJANI CHAI NA MGAO
Kampuni iliweza kulipa malipo kwa wakulima ya Kshs. 674,683,518 kwa majani chai iliyoletwa kiwandani.Malipo haya iko juu ya yale ya mwaka uliopita ya shilingi 526,549,475. Kampuni iko na furaha kueleza ya kwamba malipo kwa wakulima mwaka huu ni Ksh. 40.0 kwa kila kilo moja ya 
majani mabichi ikilinganishwa na Ksh. 37.10 kwa kila kilo ya majani mabichi mwaka uliotangulia. Baraza la wakurugenzi lilipendekeza malipo ya mgao ya asilimia mbili nukta tano (2.5%) kwa wanahisa wote wa hisa za "B" waliokuwa katika kitabu cha wanahisa cha kampumi mnamo
tarehe 30 Juni 2012. Kwa jumla shilingi 1,882,797 zitalipwa kama mgao.
CHANGAMOTO NA MWELEKEO
Kampuni iliendelea na kuboresha matokeo yake mwaka huu kutokana na mipangilio na mikakati kabambe, ambayo Kampuni imeweka ili kupunguza gharama, kuboresha mapato na hivo kunufakisha uwezo wa bidhaa za Kampuni kushindana katika soko na hivo mapato bora.
Mabadiliko makubwa kwenye safu ya ubadilishanaji pesa za kigeni katika robo ya kwanza ya mwaka ilichangia pakubwa mapato yanayotokana na uuzaji chai a vile vile kuongezeka kwa vitu ambazo zinatumika katika Kampuni ambavyo vinaletwa kotoka nchi za ng’ambo. Kama nilivyotaja katika ripoti ya mwaka jana, kampuni iliendelea na mipango yake ya kuboresha mitambo, magari na mashine hivyo kuwezesha kwa hali kubwa utengenezaji wa chai ya hali ya juu. Mwaka ujao Kampuni itanunua mashine ya aina ya CFU na Boiler. Mipango ya uboreshaji utumizi wa kawi iliendelea kwa kiwango kikubwa. Niko na furaha kusema kuwa mipangilio mufti inayotokana na utafiti ambao umefanywa juu ya utumizi wa kawi katika Kampuni itaendelea kutekelezwa hivyo kupunguza ngarama ya utumizi wa kawi kwa kiwango kikubwa.
Kupatikana kwa kuni za utumizi katika kiwanda na kupanda kwa bei ya kuni ni changamoto kubwa . Wakati kampuni inaendelea na kukamilisha upandaji miti katika shamba la Luisoi na kutafuta mashamba zaidi ya kuupanda miti, wakulima wanaombwa kujitahidi kuongeza upandaji
katika mashamba yao. Zaidi ya manufaa inayotokana na kuchunga mazingira,kuni zita kazopatikana zitaendelea
kununuliwa na Kampuni kama ilivyo sasa.
Mipangilio ya Mashule ya Wakulima kwa jina maarufu FFS pamoja na mafunzo kuhusu kilimo bora (Sustainable Agriculture) imechangia pakubwa utunzaji bora wa kilimo ya majani chai na kilimo yote kwa jumla. Nawaomba wakulima wetu kuendelea kushauriana na maafisa wa nyanjani wa Kampuni ili kuendelea kunufaika na mbinu na taaruma mpya zinazozipuka na hivyo kuongeza mapato. Kuambatana na marsharti katika sokola kimataifa la chai,Kampuni iliweza kupata cheti cha Rainforest/UTZ.Hii itachangia pakubwa uuzaji wa bidhaa za Kampuni katika soko la kimataifa
lenye ushindani mkubwa. Kampuni itaendelea na kuwaajiri wafanyi kazi wenye maarifa kulingana n mahitaji na vile vile itaendelea na mipango yake ya kutoa mafunzo katika fani ya utengenezaji ,kuimarisha mafunzo kwa makarani na wafanyi kazi wengine. Mbinu zote ambazo nimetaja zikiwekwa pamoja zitasaidia pakubwa utenda kazi, kupunguza ngarama na hivyo kuimarisha mapato kwa Wakulima.
SHUKRANI
Ningetaka kuwashukuru Baraza la Wakurugenzi, mameneja wetu, wafanyi kazi wote, wanahisa na wakulima wote kwa kazi yao iliyowezesha Kampuni kufanikiwa katika mwaka huu.
EUSTACE G. KARANJA (MWENYEKITI)