Sasini Worried By High Labour Costs

A tea producer says high wages and a firm shilling are eroding export earnings. According to a government task force report on tea released last month, payments to tea pluckers make up over 60 per cent of a producer's expenditure. "As we have mentioned before, cost of labour and exchange rates remain the main constraints to agriculture," said Sasini managing director Peter Muthoka.

Currently, the Kenyan tea industry pays workers at the rate of Sh173.37 a day, compared to competitors like Malawi, Rwanda and Uganda who pay less than Sh67.20 a day.

The Kenyan tea industry currently pays labour wages, which are more than twice the minimum agricultural wages (Sh84.67) a day as per the regulation of wages under the Agricultural Industry Amendment Order 2006, issued by the Labour and Human Resource Development minister. "This is due to the fact that tea industry is excluded from the Agricultural Wages Order," the report states.

Mr Muthoka backed the task force's recommendation to base tea workers' wages on their productivity. "However, we will always adhere to the collective bargaining agreements we sign with the union," he said yesterday in his Nairobi office, after announcing changes to the board of directors.

The board has appointed Dr James McFie a non-executive chairman, replacing Mr Andrew Hamilton who has retired. Dr McFie holds a PhD in accounting and is a Fellow of the Association of Chartered Certified Accountants. He is currently a senior lecturer in management accounting and financial reporting and analysis at Strathmore Business School. "Dr McFie brings all his professional expertise and experience to Sasini as it continues with its ambitious growth and diversification," Mr Muthoka said.

The board has also appointed Mrs Lucy Waithaka a non-executive director, replacing Mr M. Omar who has been in the board since 1989. Currently she is general manager in charge of supply chain development at the Export Promotion Council.

Mr Muthoka said Mrs Waithaka's selection was a sign of partnership between the Government and the private sector.