Sisters turn family tea firm into a business – Business Daily
Workers sort tea leaves at the loading bay at a factory. FILE PHOTO | NMG
Ernestea has grown into a multimillion-shilling high-value export business over the last few years, bulking a trend that sees most Kenyan enterprises start a downward trend after the founder’s death.
The nine Lang’at sisters and their spouses have carved out a niche for themselves with their specialty tea in the US, United Arab Emirates, Europe, and Canadian markets.
What have they learned about running a family business and what has worked for them?
Rosemary Rop Lang’at, who heads the family business says their father, Ernest Lang’at, a former ambassador, made sure they were part of the business from a young age, working alongside their parents during holidays.
“One of the things that explain our success is that we have been part of this factory since it was established, we took part in its development,” says Ms Rop.
The sisters grew and studied abroad for most of their childhood as their father worked as Kenya’s envoy in many countries including the US and Russia.
Their father bought Kaptebeswet Farm in Kericho in 1961. At first, he bought three acres and later added 12 more. Currently, the family has over 80 acres of land under tea which is harvested every two weeks.
“As the years progressed, we expanded the farm. We used to help him plant the tea during the school holidays,” says Ms Rop.
But the family patriarch did not set out to start a business. There were delays by the existing factories in collecting the harvested green leaf, leading to huge farmer losses as the crop loses its quality whenever it’s not processed timely.
“Our parents decided to build a factory where they could manage the tea quality from the beginning to the end of the production chain. The goal was to eventually sell the tea under the name of our family-owned business,” says Ms Rop.
She adds: “Luckily, at the time, the tea board had liberalised the sector, allowing farm owners to process their tea in cottage factories. This was the golden opportunity that we had been waiting for to consolidate the vision and the investments made over the years into a bigger family-owned business.”
The Lang’at sisters registered the company and listed their spouses as shareholders. They have focused on Orthodox and specialty teas that include black, purple, and yellow teas.
Ms Rop says that even though it is wholly owned, they have a strong governance structure to ensure that the performance of the company is not compromised.
“We have a very strong governance structure that enables everybody to use their talents and to contribute resources,” she says, adding, “We have a constitution, hold annual general meetings, have separated the board from the management and hired professional staff.”
The firm also has two other outsiders who are the directors, playing the critical role of providing the much-needed checks.
The sisters have so far spent Sh100 million to put up the factory, as they compete with the big boys in the market.
Much of the investment has gone into acquiring modern processing machines to meet the needs of the niche market that requires high-quality tea in return for the premium price that they pay for the beverage.
Ernestea works with 300 tea growers for the supply of green leaves, which supplements what they already get from their farm.
The challenges that they face include the supply of quality green leaf and reliable markets but they say it is something that they are overcoming.
They say running a family-owned enterprise can also be challenging but the success of their business is based on the fact that they work together as a family.
“Everybody has a different personality, different expectations, different ways of working but what we’ve done is we have taken advantage of government instruments.”