James Finlay sale sparks storm in South Rift
A signage at James Finlay Tea estates in Kericho in this photo taken on March 10, 2023.
A Sri Lanka-based multinational has bought James Finlay Kenya, kicking up a storm in the South Rift region, where the processor’s operations are based.
In Kericho County, both Senator Aaron Cheruiyot and Governor Erick Mutai have threatened to file a class action suit against James Finlay for proceeding with the sale without involving the county government — which owns the land — and the local communities.
Browns Investments PLC, whose headquarters is in Colombo, Sri Lanka, is expected, over the next few months, to complete the sale deal according to a statement released yesterday.
A 15 per cent stake in the sale has been retained for the local community through an already identified cooperative society, but whose name has not been made public yet, according to a dispatch from the company.
However, James Finlay, which operates in Bomet and Kericho counties, has retained the Saosa tea extraction facility, which will be used to source and process green leaf so as not to interrupt supplies to its existing customers.
In a clear indication it would not be exiting the local business stage, James Finlay announced it was also retaining its sourcing and packing operations in Mombasa. The company has a presence in the UK, US, Sri Lanka, Dubai, Kenya, Argentina and China.
“We are proud to be moving a business with such proud heritage into a new phase of sustainable growth ... We warmly welcome all members of the James Finlay Kenya team into the Browns family,” Browns Plc Director Kamantha Amaraseka said.
James Finlay Group Managing Director James Woodrow said the company undertook a rigorous process in identifying a strategic partner for the business.
“Having seen first-hand Browns’ unwavering focus on supporting local people and their communities to thrive when acquiring Finlay Sri Lanka tea estates in 2021, we have no doubt that Browns is the ideal strategic partner,” Mr Woodrow stated. Browns Investments PLC is part of the LOLC Holdings PLC group of companies, which owns Maturata Plantations, Hapugastenne Plantations PLC, and Udapuselawa Plantations.
No disruption
It is one of the largest tea processors in Sri Lanka with 49 estates on 30,000 hectares with 10,000 employees. The two companies said that, despite the change in ownership, there will be no disruption in business and no change in the terms of employment terms for workers.
The announcement of the change of ownership, however, didn’t sit well with local leaders.
“There is an emerging trend where multinationals sell off their business without the consent and concurrence of the county governments whose land they use on lease. That is illegal and unconstitutional,” Mr Cheruiyot said. “We shall challenge the James Finlay sale in court in a class action suit.”
Likening the company to a tenant who cannot sell off a business without prior knowledge of the landlord, Mr Cheruiyot charged that “James Finlay [is] quite notorious at this. It began with flower farms and now tea the estates.”
Dr Mutai said the county will demand that Browns Investments PLC sign a memorandum of understanding and undertake to abide by the National Land Commission directive for resurveying of the tea estates' land.
“We are also demanding that the new company must revert to manual plucking from mechanization. In any event, Browns did not embrace mechanisation in Sri Lanka” Dr Mutai stated.
James Finlay Kenya Managing Director Simeon Hutchinson yesterday wrote a letter to the Kenya Tea Growers Association, the county labour office, the Kenya Plantation and Agricultural Workers Union and the Agricultural Employers Association informing them of the change of hands in the business.
Stakeholders, including local leaders and community representatives, were called to the company’s head office in Chepkembe estate in Bomet County where the news was broken.
The sale comes against the backdrop of a long-running dispute with the local community, trade unions, politicians and the county government over the mechanisation of tea plucking, which has resulted in massive layoffs.
Two weeks ago, a police officer was seriously injured when youths who had invaded James Finlay tea estates in Konoin, Bomet County, to illegally harvest green leaves attacked him with a panga. The police officer who sustained deep cuts on the head was treated at Kericho County Referral Hospital, and was part of a team of security officers deployed to arrest the youths.
