“Our tea company now follows a business model that respects circularity and optimal use of raw materials, energy, water, and waste management. Integration of these ideas has helped us improve in many ways.” Robert Koech, Managing Director of Siomo Tea Factory Kenya told participants at the WTO Aid4Trade Stocktaking event on opportunities for sustainable economic development and transition to circular economy earlier this year.
Climate change endangering tea production
While worldwide demand for tea grows, tea producing countries face challenges due to their susceptibility to climate change. In early May, the vulnerability of Kenya – one of the top four black tea exporters of the world – to climate change made headlines. Unusual rainfall patterns and rising temperatures resulted in floods, droughts, plagues and locusts could harm tea farming in the country.
Making a business case for environmentally sustainable production
Although the outlook may seem bleak, there is hope in the introduction of more sustainable practices within the tea industry. Siomo Tea Factory is a Kenyan small and medium-sized enterprise (SME) from the South Western Highlands. The company processes tea leaves picked from around 4,000 smallholder farms in the region, which are sold through the Mombasa auction to the whole world. When the business began operations in 2017, international prices for tea were high. The company purchased machinery for automated withering, to improve efficiency and reduce losses. However, the machinery could not attain the desired moisture content in the product. As prices were high, the profits were good despite the problems in tea quality. But as soon as international tea prices dropped, the company found itself in hot water. Struggling to find solutions to handle defective machinery, management was on the verge of scrapping its withering equipment.
Supporting SMEs to go green for improved competitiveness
Early last year, Siomo Tea Factory Kenya was selected for a coaching programme on Resource Efficiency and Circular Production (RECP) delivered by the International Trade Centre (ITC) through the European Union – East African Community Market Access Upgrade Programme (MARKUP) and has, since then, introduced significant changes in its business practices. After joining the RECP coaching, Robert went from being skeptical to being an advocate of introducing sustainability and circularity measures in the business strategies of Kenya’s tea sector. “The support from MARKUP coaches accelerated our company’s path towards improved energy, water and waste management systems. They helped us see the immediate benefit of circularity,” Robert continued at the WTO stocktaking event. Instead of replacing the machines, project consultants advised the factory to improve the existing equipment. This enabled the factory to spend approximately 20,000 USD instead of 333,333 USD on upgrades for continued use. Adopting a new approach to strategizing business was key to understanding the value of repurposing and reusing. This was the first example for the company which showed that all resources – including waste – are worth preserving and costs can be spared in unexpected ways. The benefit of adopting RECP measures for small businesses is threefold: enhancing competitiveness; accessing new markets and improving environmental performance. “It is important to package circularity as a profit. Make it clear that it is a tool to save money and generate jobs.” Robert stands ready to share his company’s experience across Kenya and hopes to preserve the production of tea throughout the country.
International Tea Day
On May 21st, the world celebrates the annual International Tea Day, declared in 2020 by the United Nations. The day aims to raise awareness of the importance of tea production and processing for rural development and livelihoods along the tea supply chain, in line with the objectives of the 2030 Agenda for Sustainable Development.
Within the tea sector, the International Trade Centre’s (ITC) commitment through MARKUP includes the establishment, in collaboration with the East African Tea Traders Association (EATTA), of an online auction for specialty tea which is currently under preparation. The European Union – East African Community Market Access Upgrade Programme (MARKUP) is a regional development initiative designed by the East African Community (EAC) Secretariat in partnership with the European Union (EU) and the governments of all five countries. It is funded by the EU.
Source: International Trade Centre UNCTAD/WTO 1994 – 2015