Limuru Tea PLC in a public disclosure on Friday said it will operate under a separate entity following consumer goods major Unilever’s review of its global tea business.
Limuru Tea with 282 hectares of tea plantations, said the separation is projected to be concluded by the end of 2021.
“With relation to the balance of the Unilever’s tea brands and geographies and all tea estates in which Limuru Tea Plc falls, there is an intention to create a separate entity with the aim of maximising their potential and hence a process will now commence implement the separation, which is expected to conclude by the end of 2021,” said Dr. Richar Korir, Chairman Limuru Tea plc.
However, according to the disclosure, Unilever Tea Kenya Ltd.’s shareholding in Limuru Tea will remain unaffected.
As a result, Unilever will retain its tea businesses in India and Indonesia, and its partnership interests in ready-to-drink tea joint ventures.
UTKL provides management services to Limuru Tea in the manufacturing, selling, and marketing of its tea. The Limuru Tea estate green leaf is manufacturers in Mabroukie factory frown where it is sold for export and the Tea Auction.
Limuru Tea PLC (LIMT.ke), listed on the Nairobi Securities Exchange posted a pre-tax profit of Ksh 3.0 million in the year ended 31 December 2019 compared to a Ksh 3.7 million pre-tax profit in the prior year.
The firm says its five years program aims to replace old low yielding tea bushes with new clonal varieties which are high yielding and drought tolerant.
“So far, a total of 46ha has been replanted and a further 7ha arising from consolidation…and it is expected to boost productivity and increase the volume of green leaf tea produced by the company in the long run,” the firm says in its 2019 annual report.
In January, Unilever began to conduct a review of its global tea business in the face of slowing group sales growth.
“In January, Unilever announced a strategic review of its global tea business, which includes brands such as Lipton, Brooke Bond and PG Tips. This review has assessed a full range of options. We will retain the tea businesses in Kenya, India and Indonesia and the partnership interests in the ready-to-drink tea joint ventures,” Unilever said.
“The balance of Unilever’s tea brands and geographies and all tea estates have an exciting future, and this potential can best be achieved as a separate entity,” the company said.