Ragati Tea Factory Company Limited
Chairman's Report
CHAIRMAN’S REPORT FOR THE YEAR ENDED 30 JUNE 2011I hereby submit the report on the performance of the company during the financial year ending 30th June, 2011.
CROP
Crop production for the year was lower than that of the previous year. Slightly over ten million seven hundred thousand kilograms of green leaf were delivered for processing at the company's factory. Out of this amount of green leaf 2,702,563 kilogrammes of made tea was produced. This throughput was lower than last year's levels of 13,229,609 kilogrammes and 3,246,714 by 2,501,948 Kgs and 544,152 Kgs respectively. This achievement was at a conversion factor of 25.19% which is equivalent to 3.97 Kgs of Green Leaf to yield 1kg of made tea.
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. 249.41. This compares with the price of kshs.237.88 in 2009/2010.This price translates to Ksh. 62.83 per kg of green leaf for the year under review.
MANUFACTURING COST
The manufacturing costs decreased during the year. The average manufacturing cost for the year was Ksh 67.66 for every kilogram of made tea against the average manufacturing cost of Ksh. 71.96 per kg for the previous year. There was a decrease in the manufacturing cost by Ksh. 4.30 per every kilogram of made tea. This manufacturing cost includes monthly Greenleaf payment at Ksh. 47.63 per kg of made tea for the year which is higher than Ksh.47.29 per kg for the previous year .This year's manufacturing cost was equivalent to Ksh. 17.04 per kg of green Leaf as compared to previous year when the cost averaged at 17.66 per kg of Greenleaf.
GREENLEAF PAYMENT AND DIVIDEND
The Company was able to make a payment to the farmers of Ksh.526,549,475 for the 10,727,661 kilograms of Greenleaf. This payment is lower than last year's payment of Ksh. 549,070,921 made for 13,229,609 kilograms of Greenleaf. The company is however pleased to note that the rate of payment to the farmer amounts to ksh.37.10 per kilogram of green leaf as compared to ksh 30.10 per kilogram of green leaf in respect of the year 2009/2010. 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 2011. 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 with the favourable growth trend set out in the last financial year. This increased payment to the farmer is a clear indicator of this trend. It is important to note that this is attributable to the deliberate efforts in planning and putting into place efforts meant to keep costs of production at the lowest possible level.
Inflation and by extension the FOREX movement continued to see the weakening of the Kenya shilling against major hard currencies. This when interpreted from a business perspective had a favourable effect on sales income while at the same time increasing tremendously the price of the company’s local and imported inputs including the price of the farmers’ fertilizer.
As highlighted in last year’s financial statements, the company continued with the replacement and modernization policy both in its plant & machinery and fleet enabling greater efficiency and flow in the production and cost saving capabilities and in the future the company will continue with its replacement and modernization policy in line within the strategic plan and budget.
Principal among the modernization efforts were the energy utilization and saving interventions so far instituted resulting to very significant savings as witnessed by the performance of the financial year under consideration. More enhancement opportunities exist in this area and the company will continue to explore and institute more interventions to curb possible/potential areas of energy loss hence cost savings.
The persistent upward movement in the Electricity power bill tariff continued to impact negatively on the company’s performance. I am happy to report that the company’s efforts to own electricity generation in collaboration with other interested partners have continued in earnest and more investment continue to be channelled to this noble project. When completed savings in the way of power bill will ultimately trickle down to the farmer by way of better company performance and returns surpassing the 76% that will be paid to the farmer this year.
I want to remind the farmers on the relation between better crop husbandry and improved returns. Crop husbandry will enhance better returns to the farmers and in this regard I wish to request the farmers to continue to engage the company’s extension services so as to boost their farm output hence returns.
Increased trade competitiveness and buyer awareness continues to take even greater shape as buyers continue to demand for more certifications on the company’s products. The company will in tandem continue to push for these certifications. Effort toward the Rainforest/UTZ certification is now in progress.
The sustainable supply of firewood at competitive prices to the factory continue to be a major challenge more so considering the dwindling tree cover in the factory catchment. The company continued with its tree planting efforts at the Luisoi wood farm project to ensure that the whole acreage is under tree plantation and efforts in prospecting for more wood fuel land is continuing. Farmers are requested to supplement the company’s efforts and plant more trees on their farms.
Considered together, these efforts will go along way in ensuring firewood supply sustainability. Improved funding of tea cess account as a result of better crop production has seen an improvement in the state of roads in the catchment’s areas terms of accessibility and motorability. The company will continue to pay more attention to the maintenance of these roads in a bit to improve on crop delivery to the factory while at the same time reducing the fleet maintenance costs.
In recognition of the central role of the human resource function in the organization, the company will continue to strengthen its human resource base through training on all potential areas of improvement in tea making and all other relevant disciplines while at the same time engaging in competitive recruitment on a need be basis.
Put together all the above efforts, measures and interventions will ensure greater business sustainability, boost our production and competitiveness capabilities, and contributes to cost cutting thus savings leading to ultimate better returns to the farmer and assured bright future for the company.
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 charting the company to better results in the financial year under consideration and urge them to double their effort to maintain the company’s good performance.
EUSTACE G. KARANJA (CHAIRMAN)
RIPOTI YA MWENYEKITI YA MWAKA ULIOMALIZIKA 30 JUNI 2011
Ningetaka kuwatolea ripoti kuhusu vile Kampuni ilivyofanya katika mwaka ulioisha tarehe 30 Juni, 2011.
MAVUNO YA CHAI
Mavuno ya Chai katika mwaka yalikuwa chini ya yale ya mwaka uliotangulia. Kilo 10,727,661 za majani chai zilipelekwa kutengenezwa katika kiwanda cha kampuni. Kutokana na kiasi hiki cha chai, kilo 2,702,563, za chai iliyotengenezwa zilipatikana. Kiasi hiki kilikuwa chini ya kile cha mwaka uliotangulia ambacho kilikuwa kilo 13,229,609 za majani mabichi na kilo 3,246,714 za chai iliyotengenezwa na tofauti ilikuwa kilo 2,501,948 za majani mabichi na kilo 544,152 za chai iliyotengenezwa.Mapato haya kwa kibadilisho cha 25.19 kwa mia ni sawa na kilo 3.97 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 Kshs 249.41. Bei hii ilikuwa juu ikilinganishwa na bei ya mwaka uliotangulia ya Kshs.237.88. Bei ya chai iliyotengenezwa na kuuzwa katika mwaka ni sawa na Kshs.62.83 kwa kila kilo moja ya majani mabichi.
GHARAMA YA UTENGENEZAJI
Gharama ya utengenezaji ilichuka katika mwaka na ilikuwa Kshs. 67.66 kwa kila kilo moja ya chai iliyotengenezwa. Gharama wastani ya mwaka uliotangulia ilikuwa Kshs.71.96 na kwa hivyo tofauti ikawa Kshs 4.30 kwa wastani kwa kila kilo moja ya chai iliyotengenezwa.Gharama ya utengenezaji imejumuishwa na ile ya malipo ya majani chai kwa mwezi ya kshs 47.63 kwa kila kilo moja ya chai iliyotengenezwa ambayo ilikua juu ikilinganishwa na ile ya mwaka uliotangulia ya kshs 47.29 kwa kila kilo moja ya chai iliyotengenezwa.Gharama ya utengenezaji katika mwaka ilikuwa sawa na Kshs 17.04. kwa kila kilo moja ya majani mabichi ikilinganishwa na Ksh.17.66 ya mwaka uliopita.
MALIPO YA MAJANI CHAI NA MGAO
Kampuni iliweza kulipa malipo kwa wakulima ya Kshs. 526,549,475 kwa majani chai iliyoletwa kiwandani.Malipo haya yako chini ya yale ya mwaka uliopita ya shilingi 549,070,921 iliyofanywa kwa kilo 13,229,609 za majani mabichi. Kampuni iko na furaha kueleza ya kwamba malipo kwa wakulima mwaka huu ni Ksh.37.10 kwa kila kilo moja ya majani mabichi ikilinganishwa na Ksh. 30.10 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 2011. Kwa jumla shilingi 1,882,797 zitalipwa kama mgao.
CHANGAMOTO NA MWELEKEO
Kampuni iliendelea na kuboresha matokeo yake mwaka huu kama ilivyodhihiriswa na malipo bora kwa wakulima ikilinganiswa na mwaka uliopita. Hii ilitokana na mipango na juhudi kababe zilizochukuliwa miaka ya hapo awali za kupunguza gharama kwa kiasi kikubwa.
Mabadiliko kwenye safu ya ubadilishanaji wa pesa za kigeni na hivyo kupanda kwa gharama ya maisha kuliadhiri kwa kiwango kikubwa thamani ya Shilingi.Tukio hili lilichangia mambo mbili muhimu i.e. mapato kutokana na mauzo ya chai kwenye mnada yaliongezeka ilihali bei ya bidhaa mbali mbali zinazotumika kwenye kampuni iliongezeka kwa kiwango kikubwa ikiwapo bei ya mbolea.
Kama nilivyotaja katika ripoti ya mwaka jana, kampuni iliendelea na mipango yake ya kuboresha mitambo, magari na mashine hivyo kuwezesha kwa hali kubwa utendaji kazi na vile vile kuchangia katika kupunguza gharama kwa kiasi kikubwa.
Mipango ya uboreshaji utumizi wa kawi iliendelea kwa kiwango kikubwa mwaka huu hivyo kupunguza gharama ya kawi.Mengi yanayohusiana na utumizi bora wa kawi yataendelea kufanywa.
Upunguzaji wa gharama inayotokana na utumizi wa nguvu za umeme ni jambo ambalo ni lazima liangaliwe kwa makini ili kuboresha mapato. Kampuni iliendelea na mipango yake ya mradi wa nguvu za umeme ikishirikiana na Kampuni zingine za jimbo la Kirinyaga. Mradi huu utakapomalizika, gharama ya utengenezaji chai itapungua kwa kiasi kikubwa na kwa hivyo mkulima ataendelea kunufaika zaidi. Ni nia ya Kampuni kuboresha mapato kwa mkulima kwa kiasi kikubwa hata zaidi ya asili mia 76% ya mapato yote watakaolipwa wakulima mwaka huu.
Ushindani mkubwa kwenye soko la chai iliendelea hata zaidi mwaka huu na pia wanunuzi waliendelea na kuweka marshati zaidi yanayohusiana na vyeti mbali mbali za kuhakikisha ubora wa bidaa Kampuni inatarajia kupata cheti cha Rainforest/UTZ katika miezi kadhaa ijayo.
Kupatikana kwa kuni za utumizi katika kiwanda kwa bei nafuu ni changamoto kubwa sana ikikumbukwa kuwa upandaji wa miti umepungua kwa kiasi kikubwa kufuatia kupungua kwa mashamba. Wakati kampuni inaendelea na kutafuta mashamba zaidi ya kuupanda miti na vile vile upandaji katika shamba la Luisoi, wakulima wanaombwa kujitahidi kuongeza upandaji katika mashamba yao.
Kampuni iliendelea na utunzaji wa mabarabara hivyo kupunguza gharama ya kutengeneza Magari na vile vile kuboresha uchukuzi wa majani chai mbichi kutoka kwa mashamba,
Kampuni inatambua jukumu muhimu linalotekelezwa na wafanyi kazi na kwa hivyo itaendelea na mipango yake ya kutoa mafunzo katika fani ya utengenezaji chai na nyanja zingine husika na vile vile kuendelea kuajiri wafanyi kazi wenye ujuzi kuambatana na mahitaji yake.
SHUKRANI
Kwa niaba ya Baraza la Wakurugenzi, ningetaka kuwatolea shukrani wakurugenzi wenzangu, mameneja wetu, wafanyi kazi wote wa Kampuni, wanahisa na wakulima wote walioleta majani mabichi ya chai katika Kampuni kwa kazi yao iliyowezesha Kampuni kufanikiwa katika mwaka huu.
EUSTACE G. KARANJA (MWENYEKITI)
