1. The Kenyan Tea Sector PRESENTATION BY: SICILY K. KARIUKI (Mrs.), MBS. MANAGING DIRECTOR TEA BOARD OF KENYA May 2010

2. Format of presentation TEA BOARD OF KENYA Introduction Kenyas Tea Sector Industry Performance Key Issues Opportunities Emerging Global issues Conclusion Sicily Kariuki … The journey so far 2

3. INTRODUCTION – Kenyas Tea Sector TEA BOARD OF KENYA Brief on TBKEstablished on 13th June 1950 under the Tea Act (Cap 343). Core MandateRegulating Promotion Research Others Vision To make Kenya tea the preferred tea in the world MissionTo promote the efficient production and marketing of high quality tea to the domestic and international markets 3

4. TEA BOARD OF KENYA 4 East of Rift West of Rift Growing areas

5. Sector Stakeholders TEA BOARD OF KENYA TBK GOK PROCESSORS/ FACTORIES FOREIGN DIPLOMATIC MISSIONS KENYAN DIPLOMATIC MISSIONS TEA COUNCILS/ ORGANIZATIONS GOVERNMENT AGENCIES GENERAL PUBLIC THE MEDIA TRADERS GROWERS/ FARMERS 5

6. Sectors Importance TEA BOARD OF KENYA 6 Employment Forex Earnings Rural Wealth Distribution F & B linkages R & D 6

7. Marketing Channels TEA BOARD OF KENYA 7

8. Major Export Destinations Egypt United Kingdom Pakistan Afghanistan Sudan TEA BOARD OF KENYA 8

9. Emerging Markets Emerging Markets TEA BOARD OF KENYA 9 Russia/CIS Iran Poland China United Arab Emirates West Africa South Africa Kenya and East African Community 9

10. Sector Performance TEA BOARD OF KENYA 10 3rd largest producer of Tea (2009) Largest Global Exporter (22%) Predominantly a Black CTC tea producer (99.9 %) 2 nd Largest Tea Auction in the world. 10

11. Production (2005 – 2009) TEA BOARD OF KENYA 11

12. Global Position (2009) TEA BOARD OF KENYA 12

13. Industry Performance TEA BOARD OF KENYA 13 Production, export and domestic consumption (MT)

14. TEA BOARD OF KENYA 14 Industry Performance

15. TEA BOARD OF KENYA 15 Industry Performance

16. 16

17. Key Issues TEA BOARD OF KENYA 17 Commoditized exports Hidden product Share of throat competition Low investment in R & D and Market Development Perception/consumer preference/convenience Limited product range High CoP

18. TEA BOARD OF KENYA 18 Opportunities Domestic/ Regional Market potential International Emerging Markets Value addition and branding Eco – tourism Leveraging on ICT Leveraging on health platform Product diversification 18

19. Emerging Global issues TEA BOARD OF KENYA 19 Supply Vs Demand (to grow more tea or not?) Price volatility Non-Tariff Barriers and Bilateral Agreements Competition Environmental concerns (e.g. degradation, carbon footprint, water footprint etc) 19

20. Conclusion TEA BOARD OF KENYA Potential not fully tapped More investment needed Innovation a pre-requisite Lessons from past bad experiences e.g. Coffee Thank You 20

21. Sicily Kariuki … The journey so far TEA BOARD OF KENYA 21

22. Contacts THE TEA BOARD OF KENYA Tea Board House Naivasha Road off, Ngong Road P.O. Box 20064- 00200 Nairobi Kenya Tel: (+254 20) 3874445/6 / 3872497 Wireless: (+254 20) 2536869 | 2536886 Fax: (+254 20) 3862120 / 3876337 Email: info@teaboard.or.ke www.teaboard.or.ke