Kenya Weather Patterns Worry Brooke Bond
3/3/00
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Title: Kenya weather patterns worry Brooke Bond
Source: Reuters
Status: Copyright 2000, contact source for permission to reprint
Date: March 3, 2000
Byline: David Mageria
KERICHO, Kenya, March 3 (Reuters) - Kenya's leading tea producer
Brooke Bond Kenya Limited says it is worried about increasingly
changing weather patterns in Kenya.
Managing director Julian Stanning said Brooke Bond was concerned
Kenya was fast losing its advantage of growing tea throughout the
year due to recent prolonged dry spells.
Stanning blamed deforestration for the drought and frost recently
experienced in key tea growing areas of the country.
``It is a major concern because we are looking foward to possibly a
much more seasonal climate in Kenya,'' he told Reuters in an
interview in the leading tea growing rural town of Kericho.
``In Kericho we are used to year round rainfall.''
A Unilever Plc company, Brooke Bond has invested heavily in growing,
manufacturing and selling of tea and recently sold its flower and
coffee units to concentrate on the tea business.
``It becomes much less attractive environment to make major
investment if you can only use your facilities for eight to nine
months a year,'' Stanning said.
Brooke Bond's after-tax profits fell 6.8 percent in 1999 hurt
primarily by a 23 percent drop in its tea production.
Most tea companies in Kenya also posted sharply lower profits last
year and put the falls down to declining yields, poor infrastructure
and high cost of labour.
BROOKE BOND TO INCREASE INVESTMENT
Stanning said Brooke Bond will make a capital investment of 300
million shillings ($4.1 million) in the next two years in a bid to
improve the quality of its tea.
``We want to introduce some novel ideas into the tea,'' he said
giving no details. ``With improvement in technology there are
possibilities of directing quality of tea to what the consumer
wants.''
He said the company was spending between 60 to 70 million shillings a
year on research and hoped in the longer term to introduce tea that
was more tolerant to dry weather.
Stanning said he was convinced Kenya could maintain its position as
leading exporter of black tea in the world especially if ``all looked
after the environment.''
An increase in population has put pressure on forests as people clear
them in search of new settlement.
Brooke Bond expects tea output to be depressed in the first quarter
of the year and see strong prices as a result. But the company adds
the improved prices are unlikely to offset the impact of low volumes
in the first half of the year.
Stanning said if good rains come, he hoped total Kenyan production
would be around 250 million kgs this year. Kenya's output was 248
million kgs last year versus 294 million kgs in 1998 when production
was heavily boosted by El Nino rains.