• Tea Production in Kenya

• Company Performance 2016

• 2017 and longer term prospects

WORLD TEA PRODUCTIO:2015&2016

China India Kenya Sri Lanka Turkey Vietnam Indonesia Japan Argentina

2015 2230 1191 399 328 230 165 129 82 83

2016 2350 1239 473 292 253 165 126 77 84

0

500

1000

1500

2000

2500

Major Tea Producing Countries-Million Kgs

2015 2016

Pakistan

Egypt

Kenya

27%

China

19%

Srilanka

16%

India

12%

Vietnam

7%

others

19%

Pakistan 29%

Egypt 19%

UK 10%

UAE 7%

Afghanistan 7%

Sudan 5%

Russia 4%

Yemen 3%

Kazakhstan 2%

Others 14%

PAKISTAN

EGYPT

UK

UAE

AFGHANISTAN

SUDAN

RUSSIA

YEMEN

KAZAKHSTAN

0thers

378 370

432445

399

473

200

250

300

350

400

450

500

2011 2012 2013 2014 2015 2016

'000 tonnes

Year

19% increase vs. 2015

2011 2012 2013 2014 2015 2016

2.99 3.18 2.53 2.16 2.98 2.36

2.993.18

2.53

2.16

2.98

2.36

1.00

1.50

2.00

2.50

3.00

3.50

21% lower vs. 2015

88.87

84.5286.13

88.08

98.59 102.29

55

60

65

70

75

80

85

90

95

100

105

11 12 13 14 15 16

Ksh/US$

4% increase

Vs 2015

11 12 13 14 15 16

266 270 218 190 294 241

70

120

170

220

270

320

18% decrease Vs 2015.

• Kenyan production 19% above 2015.

• US$ tea prices decreased by 21% from 2015

• Kenyan shilling depreciated by 4%

• Price in ksh decreased by 18%.

– Market challenges- instability in key export markets.

– Volatility in tea auction prices.

– Variability of climatic conditions

– Currency fluctuations

– Wage inflation and pressure to provide employment

2011 2012 2013 2014 2015 2016

628 651 689 770 692 711

0

100

200

300

400

500

600

700

800

900

+3% Vs 2015

2011 2012 2013 2014 2015 2016

102.5 116.0 104.2 92.3 122.4 103.9

0

20

40

60

80

100

120

140

2011 2012 2013 2014 2015 2016

163 178 151 120 174 146

-

20

40

60

80

100

120

140

160

180

200

16%Vs 2015

2011 2012 2013 2014 2015 2016

Shs / Kg 23.9 26.9 27.6 26.8 28.9 36.5

5

10

15

20

25

30

35

40 26%Vs

2015

-55

152535455565758595

105115125135145155

2011 2012 2013 2014 2015 2016

60

147

42

2 8-27

•Higher crop

•Lower Price

•Bio Assets

Value Loss of 5M

Low crop, High Price

Bio Assets Value +22 m

Higher crop, Low Price

Bio Assets Value gain of

13.5M down from 98.5m

in 2013.(decrease by

85M) 1. Price decline by

16%2. Cost increase due

to general

inflation and

higher Electricity costs.

Low crop, High Price,

Bio Assets Value +99 m

•Low crop

•Higher Price

• Crop 3% higher compared to 2015• Lower US$ prices than 2015• Decrease in profitability driven by low prices, and

increase in cost of sales.• Cost increases remain a cause for concern.

– Wages– Electricity – dependence on KPLC

• No dividend is recommended for 2016

• 2017 Q1 experienced prolonged drought that adversely impacted on production.

• 2017 crop expected to be lower than 2016

• Currency volatility expected

• We expect 2017 tea market prices to be in line with long term averages.

• Continued focus on costs management

• Continually improve tea quality

• Growth

– 9.64 ha replanted in 2016

– 12 ha to be replanted in 2017

• Maintenance of Rainforest Alliance certification

• Continued focus on employee social welfare.

Continued focus on employees’Safety, Health & SecurityImprovement in social infrastructure

▪ Maintenance of houses

& facilities

▪ Engagement with

pupils of Rongai

Primary school in LTC

on safety & security

for boys and

girls

2015 May view

NTD 12.6Ha (field 65) was planted in 2015 and will fully mature in 2018

2016 May view

2017 May view

THANK YOU TWAWEZA AWARD