Table of Contents

EXECUTIVE SUMMARY............................................................................................. 2
INTRODUCTION........................................................................................................ 4
OUR PRODUCTS....................................................................................................... 5
TECHNOLOGY........................................................................................................... 6
ENERGY REQUIREMENTS:....................................................................................... 6
MARKET ENVIRONMENT......................................................................................... 7
I).

Target market................................................................................................. 7

II).

Competition................................................................................................... 7

III).

Marketing/Sales strategy............................................................................... 8

BUSINESS MODEL.................................................................................................... 8
PRODUCTION/OPERATIONS.................................................................................... 9
I).

The Process:................................................................................................... 9

RAW MATERIALS/MANUFACTURING RESOURCES..............................................11

MANAGEMENT/PERSONNEL................................................................................. 12
i).

Key Personell................................................................................................... 12

ii).

Advisory Board............................................................................................. 12

REGULATIONS........................................................................................................ 13
i). Tea Act (Cap 343) and Tea (Licensing, Registration and Trade) Regulations,
2008...................................................................................................................... 13
ii).

National environmental management Authority (NEMA):..........................14

iii).

Other legislation:........................................................................................ 14

iv).

Quality certification:................................................................................... 14

CAPITAL REQUIREMENTS / FUNDING..................................................................14

EXECUTIVE SUMMARY.
1. Tumoi Teas limited intends to invest in the establishment of an
orthodox cottage tea manufacturing plant
2. Total estimated value of the investment is Kshs. 14,000,000
(Fourteen Million shillings).
3. The project will be financed
shareholders,

promoters

and

by

Equity

contribution

financier/strategic

from

partners

identified by the directors of Tumoi Teas limited.

4. The feasibility study reveals that the project will bring in profits in
the first year of operation and continues to be profitable even
after the sixth year of operation.
5. The project has good economic benefits to its shareholders and
the community around the location of the project. The project is
labor intensive and direct employment to about 200 with a
production of 200kgs of made tea a day and 15000 tea stars.
6. The returns on both the Equity and the Investment are quite good
and sustained by a good flow of cash.

7. The

project is technically feasible, economically viable and

financially sound and should be supported.

8.

Tumoi
Teas
limited,
in
collaboration
with
the
strategic investors, has identified all the resources needed for
immediate implementation of the project.

9.

The construction of the factory plant will commence as soon as the

Tea Directorate issues a manufacturing license to Tumoi Teas.

INTRODUCTION
Tumoi Teas was founded in the year 2013 and registered as a limited
company in 2015 after almost 3 years of extensive research in small scale
Orthodox tea manufacture also known as the cottage tea manufacture.
The Tumoi Teas stakeholders have been involved in tea farming, machinery
fabrication, tea packing and distribution for over 40 years. They propose to
invest in a tea manufacturing facility for Orthodox teas. The proposed facility
will be a cottage tea manufacturing and value addition facility.
The government has continued to encourage investment in tea sub-sector
processing, packaging and marketing since liberalization in 1992. This
liberalization meant opening the tea sector to various investments at various
levels. However certain regulatory procedures issued by the Tea Board of
Kenya (TBK) as stipulated in the Tea Act, must be met before and during
operations in any investment on Tea. These regulations covers various
categories in Tea handling such as in Planting, Manufacturing, Value addition,
Marketing, Tea Estate management, Warehousing, research Etc. While
fulfilling the regulations required by the Tea Act, Tumoi Teas Limited would
like to use this window of opportunity to invest in a small scale, labor
intensive tea manufacturing and value addition factory.
Tumoi Teas limited directors, shareholders and sponsors have a rich
background on tea operations and would like to use their experience for
further development in tea operations by investing in a manufacturing
factory. This project will entail the building of a cottage factory, acquisition
and assembly of state of the art tea manufacturing machines and facilitating
the acquisition of green leaf for conversion to black orthodox tea and other
specialty tea products.
Our products will deviate from the mostly
manufactured CTC teas to Orthodox teas which the world is conforming to.
This project appraisal examines in details the viability and feasibility of Tumoi
Teas vision of setting up a cottage tea factory to be located in Nandi
County in Rift valley province.

OUR PRODUCTS
In the recent past the world has seen a gradual increase and demand of
orthodox teas. Tumoi teas realize Kenyas bias towards CTC leaving a gap in
the orthodox market, our proposal is to produce whole-leaf orthodox teas

for the mid to high end market segments. We propose to produce both loose
and tea bag tea, our orthodox tea bag is a patented concept of tying the
tea in a string hereafter referred to as a tea star. Through different degrees
of oxidation and fermentation, we have developed recipes for different types
of specialty tea that we are ready to produce. These are;
1.
2.
3.
4.
5.
6.

Green Tea,
Black Tea,
Yellow Tea,
Purple Tea
Oolong Tea.
White Tea

The tea will be packaged and branded as shelf ready products.

In collaboration with our major partner (JUSTEA), we have carried out
extensive market research in Canada and the wider North American Market
and are now ready to start producing for this ready market. As we grow our
operations we have plans to expand product line to include flavored teas.

TECHNOLOGY
The growing demand for orthodox teas in the high end segment is driven by
consumers who are interested in the story behind the tea. At Tumoi we have
passionately designed and assembled our own prototype machinery that will
be used in production of the teas. The advantage we gain from the process
allows us not only to have high quality machines that produce premium tea
but also a great story of the Kenyan tea farmers innovations and
employment creation.
We have partnered with a software company (Vookani) which has helped a
great deal in the Market research. With this technology our customers are
able to connect directly in real time with the tea process from the initial
stage of plucking to the final stage of packing. This real-time connection
between the consumers and the farmers/employees creates a great sense of
identity and authenticates the tea process and origin.
Quality control has been one of the major challenges in tea manufacture.
This is where recent advances in mobile technology become strategic.
Similar to the way M-Pesa has revolutionized handling money, the vookani
cloud based system allows the management team to see any problems in
real-time so they can step in and help .It tracks tea from farm (GPS) and
plucker (picture) through processing (temperatures, times, humidity, etc.)

and packaging to shipping. Any concern along the line can be traced back to
the person, equipment or situation that lies at the cause.

ENERGY REQUIREMENTS:
At the onset, the prime source of power for machines will be electric energy.
However,

Tumoi

have

designed

the

cottage

factory

using

modern

architectural concepts that reduce electric requirements on lighting by 20%.

In addition we have negotiated with Greenskies LLC a US based Solar
Company who are ready to install solar arrays that will provide power for the
cottage factory. Tumoi teas also realize the limited sources of firewood as
fuel for tea driers. In this regard, we have developed a machine that will be
used to convert bagasse and saw dust to briquettes. These technological
advancements will not only be cost saving measures but also major
marketing points.

MARKET ENVIRONMENT
I).

Target market

Our target market will be both domestic and international markets. Our
immediate international markets will be Europe, North America and Canada
through our Partners NOTHING BUT TEA, OMAR COFEE and JUSTEA
respectively. These groups of consumers value the health benefits of tea and
the story of the social impact of the products they consume. These
consumers can connect directly to the actual farmers and producers of the
tea and asses the social impact. These consumers can also follow the story
through social media sites.
Locally we intend to target the increasing number of coffee and tea cafes in
cities, High end hotels and restaurants, Gift shops and Duty free shops.

II).

Competition

The Asian markets Taiwan, China, India and Nepal are major competitors with
similar products. In Africa few companies have embarked on orthodox tea
manufacture and these is in very small scale production.
Our Orthodox tea manufacture will be based on Single origin which
increasingly resembles that of wine Origin (i.e. area/estate/ garden, single estate), cultivar, terroir, harvest year, name of the tea master, and method
of production have become important selling points for the high - level
segment. Its therefore highly unlikely that any other competitor can offer the
same product as ours.

III). Marketing/Sales strategy

Marketing Partners: The secured Strategic Partnerships in UK, US, Canada will
act as manufacturer representatives and approach wholesalers, distributors
or retailers in the respective markets. Tumoi teas working with them will
continually attend tea fairs and tradeshows locally and internationally to
market and sell the teas. In addition, we plan to aggressively use emails and
telemarketing as they are the most cost effective tools and can reach many
people across the globe. We will aggressively use these tools and social
media platforms to popularize our teas.
Our major Selling points will among others be;

Diversity - a wide selection of flavors

Storytelling continually engaging the consumers on the social impact
of the tea and the people behind their great cup
Sustainability green energy tea production
Health Benefits antioxidants, lower levels of caffeine, pesticide free
Purple Tea a uniquely Kenyan product
Social impact our hand tied tea starts will employ many people

BUSINESS MODEL
Our business model will be based on the Single Origin tea Model. Single
origin teas are commonly defined as teas made from leaves harvested from
a single country, region or farm. Our tea will be produced, batched and
packed from the same farm. In this case the consumer will know the origin of

the tea being consumed as an unblended pure (Kenya/NANDI) tea. This is

critical because we want to sell the high quality Kenyan tea.

PRODUCTION/OPERATIONS
I).

The Process:

The steps involved in the orthodox tea manufacture include; withering,

preconditioning, rolling, fermentation, fixation/drying, grading & sorting and
finally packing.
Withering
Withering will be carried out by spreading the leaves thinly on banks of
bamboo trays. The trays are kept 12 to 15 centimeters apart, to allow free
access of air. There are two types of withering; outdoor withering and indoor
withering. The outdoor is natural withering in its simplest form. The
average length of time for withering is 12 to 20 hours. In general the teas will
be withered to a target moisture content of 60-65%.
Rolling:
When a satisfactory wither has been obtained the leaf is ready for rolling,
which twists the leaf, breaks it up and expresses the juices. The rolling will
compress and turn the leaf over. This step facilitates mixing up of cell
constituents thereby starting fermentation.
Fermentation:
Though actual fermentation starts at rolling it is continued in the next stage.
The sifted leaves are spread out in thin layers on tables or perforated
aluminum trays or into aluminum drums, in order to continue the oxidative
process. During fermentation, the leaf changes colour and turns into a dark
coppery tone. Typical aroma develops at this stage. When the fermentation is
judged to be sufficient (colour & nose assessment) the fermenting dhool is
transferred to the drier.
Fixation:

This is done to stop the tea leaf oxidation at a desired level. This process is
accomplished by moderately heating tea leaves, thus deactivating their
oxidative enzymes and removing unwanted scents in the leaves, without
damaging the flavor of the tea. The tea leaves are panned or baked using a
panning machine.
Drying:
A simple tray dryer will be used in the tea drying. After firing, the tea is
spread out to cool and then temporarily stored to wait sorting.
Grading and sorting:
Grading and sorting: Grading is carried out on mechanically oscillated sieves.
Finished grades are stored in air-tight bins until a sufficient quantity has been
accumulated to fill a consignment.
Packing:
The readymade tea will be packaged and shipped to consumers
The grades of orthodox teas that we intend to produce are only the whole
leaf grades indicated as follows;

Whole leaf

FP

Flowery Pekoe

FTGFOP

Fine Tippy
Golden
Orange Pekoe

TGFOP1

Tippy Golden Orange

Pekoe

GFOP

Golden
Flowery
Orange Pekoe

FOP

Flowery Orange Pekoe

OP

Orange Pekoe

BOP

Broken Orange Pekoe

one

GFBOP Golden

Flowery

Broken Orange Pekoe

RAW MATERIALS/MANUFACTURING RESOURCES

Tumoi teas Limited have an 80 acre tea farm that will be the source of green
leaf for the orthodox tea manufacture. Annual production of green leaf
currently is about 400,000kgs. We also have a 4 acre piece of land set aside
for the cottage factory. The site has access to water and electricity.
The requisite Machines for production have been fabricated / bought and are
ready for operations.

MANAGEMENT/PERSONNEL
i).

Key Personnel

Boaz Katah
Boaz is the principal director of Tumoi teas. He is a seasoned businessman
involved in tea packing and distribution since the year 2007. He holds a
bachelors degree in computer science from Emporia State University and an
MBA (finance) from the University of Nairobi. For the past 2 years, Mr Katah
has been involved in orthodox tea research.
Jamilla Kangahi Katah
Jamilla is a banker and handles the financials of the company. She brings in a
wealth of experience in matters finance. She holds a Bachelors Degree in
Education (Arts) and an MBA (Finance) from the University of Nairobi. Jamilla
will be in charge of the Finance and Administration departments.
Maurice Agoro
Maurice is a diploma graduate in Engineering. He is the brains behind
machinery that we use. Maurice will be in charge of the Engineering
departments.

ii).

Advisory Board

In order to meet high quality standards, Tumoi has engaged the following
persons on advisory positions.

Jacob Katah
Jacob Katah retired from Eastern Produce Kenya in the 2013 having worked in
the tea industry for 40 years. At the time of his retirement he was the
production Director. He has been a big asset in Tumoi tea research for the
past one and a half years with his knowledge and extensive expertise in all
matters tea.
He is also a Director of Siret tea company which is wholly owned by farmers
and managed by Eastern Produce. He will continue being a big asset to
Tumoi Teas limited in harmonizing Tea quality procedures and welfare of the
community with international standards.

Buddha Dev Acharya

Bhudha like Jacob has over 30 years experience in tea manufacture with a
bias on orthodox tea. He has worked in India and Nepal as a consultant in
orthodox tea manufacture. Bhudha is the Tumoi Teas consultant on orthodox
tea manufacture process and machinery.
Doug Penner
Doug is a software and communications expert from Canada. He developed
an application (vookani) that is used by Tumoi Teas to connect with the
consumers all over the world in real time.

REGULATIONS
i). Tea Act (Cap 343) and Tea (Licensing, Registration and
Trade) Regulations, 2008.
This act generates the several regulatory requirements in detail in the Tea
sub sector of the Kenyan economy.
The directors and shareholders of Tumoi Teas Limited are confident that
they will satisfy all the requirements and demands of the Act and be able
to obtain the various licenses from the Tea Directorate for the intended
investment.

ii).
(NEMA):

National environmental management Authority

The directors have engaged the services of Westfield Company limited

to carry out an impact assessment and to develop a comprehensive
environmental policy

iii). other legislation:

These include licenses from the county government, Water companies,
Kenya Power and lighting. The process of acquiring these required
documents is already on- going. Water Resource Management
Association of Lake Victoria Basin will process the water abstraction
permit once the mandatory conditions have been satisfied.
The Kenya Power and Lighting Company limited Western Kenya Region
have confirmed their willingness to connect electricity to the factory
once the construction starts

iv). Quality certification:

Tumoi teas will pursue FDA, KEBS, Public Health certifications

CAPITAL REQUIREMENTS / FUNDING

We have outlined the cost of 1 tea cottage in the table below. The total cost
for a fully operational cottage is Kes. 14, 000,000/-. Our concept is to
ultimately multiply the tea cottages and provide employment to as many
people as we can. One Tea cottage can employ up to a maximum of 250
persons and can produce up to 200kgs of made tea and 20,000 tea stars in a
day.

ORTHODOX TEA MACHINERY

7,500,000.00

STRUCTURES

2,500,000.00

TRAINING

1,000,000.00

POWER
CONNECTION

1,000,000.00

WORKING CAPITAL 2,000,000.00

TOTAL

14,000,000.00

Funding will be drawn from the project sponsors and shareholders.

a) The project will be sponsored by:

i)

Tumoi Teas Limited: This is a company limited by shares and

incorporated in Kenya under the company Act (Cap.486). It is run by a
board of Directors elected periodically

ii)

Financier/strategic partner: Tumoi Teas

Limited has invited a strategic

partner to fill the shortfall in the financing of the project. The

engagement will be based on agreed Equity contribution.
iii)

Other shareholders:
These are drawn from the general public who may not necessarily be
suppliers of green leaf. Their input will be based on purchase of shares.

b) Sponsors Equity: The entire investment will be financed by Equity

contribution from the sponsors as in (a) above. It is estimated that the total
cost of the factory will be Kshs.14,000,000.