Online Reporter
Michael Tome-Business Reporter
TANGANDA Tea Company Limited says its export sales volume grew by 39 percent to US$15,1 million in the year to September 2024, which accounted for 59 percent of the group’s total revenue.
In contrast, the company experienced a 16,5 percent decline in local sales volume to US$10,6 million.
The surge in export sales was primarily attributed to a substantial increase in avocado export volumes.
As the restrictions imposed by the Covid-19 pandemic eased, the company benefited from both the recovery in selling prices and an upswing in demand.
Avocado exports grew significantly, climbing by 40 percent to 2 997 tonnes, compared to 2 148 tonnes in the same period the previous year.
This rise was bolstered by an increase in average selling prices, which improved to 75 US cents per kilogramme, up from 44 US cents in the past year, reflecting the global market’s improved conditions following the easing of pandemic-related restrictions.
However, not all product categories shared this positive trajectory.
Macadamia nut exports faced challenges, experiencing a decline of three percent, dropping to 1 508 tonnes from 1 551 tonnes the previous year.
This downturn was largely due to logistical complications stemming from rescheduled shipping, which affected the final consignment of 286 tonnes.
Similarly, bulk tea exports also saw a slight decrease, falling two percent to 6,137 tonnes from 6,238 tonnes in the prior year. The drop in tea export volumes was linked to a decline in tea quality, negatively impacted by extreme temperature conditions experienced throughout the year.
Additionally, the prevailing market conditions in Kenya significantly affected the tea-export average selling prices. They decreased from US$1, 44 per kilogramme in the prior year to US$1, 34 per kilogramme in the current fiscal year, further worsening the challenges faced by Tanganda.
“Revenue for the year of US$25, 7 million grew by nine percent from the prior year of US$23, 6 million primarily attributable to an increase in avocado export volumes and the recovery of their selling prices as Covid-19 pandemic restrictions eased,” said Herbert Nkala, Tanganda Tea Company chairman in the full year financial review to September 30 2024.
Mr Nkala highlighted that the developments occurred against a backdrop of economic instability characterised by exchange rate fluctuations, depreciation of the local currency, and persistent inflationary pressures.
After the new local currency was introduced on April 5, 2024, the economy witnessed a resurgence of the challenges, culminating in a 43 percent devaluation of the ZiG in September 2024.
This devaluation contributed to a further weakening of market confidence in the local currency.
Despite the Government’s implementation of tight fiscal and monetary policies to stabilise the economy, Tanganda said, domestic currency stability continued to be threatened by structural economic challenges.
The situation had been further compounded by the El Niño which adversely impacted the agricultural sector and coincided with a period of subdued international commodity prices, thus significantly affecting overall economic performance.
Despite navigating these mixed challenges, Tanganda achieved a profit after tax of US$1, 4 million, a turnaround from a loss of US$3, 1 million reported in the previous year.
The company’s total revenue for the year reached US$25, 7 million, reflecting a nine percent increase from the prior year’s US$23, 6 million.
Operating profit also increased significantly, soaring by 223 percent to US$1, 9 million.
