Finlays announced the sale of its James Finlay Kenya Ltd. tea gardens to Sri Lanka-based Browns Investments. Terms of the sale were not disclosed.
The nine Finlays tea estates cover 10,300 hectares, including 5,200 hectares of land under tea. The remaining land includes 1,200 hectares of preserved indigenous forest. Finlays acquired its first Kenyan tea garden in 1925 and continuously expanded operations there over nearly 100 years.
The Finlays estates produce black, green, white, and purple teas manufactured by CTC and orthodox processes for sale to such markets as the U.K., Egypt, Pakistan, Russia, and the U.S.
Browns Investments in December 2021 acquired various Finlay tea estates in Sri Lanka, including Maturata Plantations, Hapugastenne Plantations, and Udapussellawa Plantations. Headquartered in Colombo, Browns owns 49 Sri Lankan gardens spanning 30,000 hectares and employs over 10,000 workers. It is part of LOLC Holdings, one of the largest listed corporations in Sri Lanka.
In a press release, Finlays said Browns was selected for its strong legacy of guiding its tea estates toward continued growth. James Finlay Kenya will retain its tea extracting facility at Saosa, tea packing operations in Mombasa, its timber business, and its services division supporting tea, coffee, and botanical ingredients.
James Woodrow, group managing director of Finlays, said, “We undertook a rigorous process when identifying a buyer for this unique business, prioritizing what was best for James Finlay Kenya and its community.”
“Having seen first-hand Browns’ unwavering focus on supporting local people and their communities to thrive when acquiring Finlays Sri Lankan tea estates business in 2021, we have no doubt that Browns is the ideal strategic investor for James Finlay Kenya. We will continue to have a very close relationship with James Finlay Kenya and look forward to continuing to source tea from it and championing Kenyan tea and botanicals across the world,” said Woodrow.
According to the release, Browns and Finlays “mutually agreed to acknowledge the long-standing support of the local community by selling 15% of shares in James Finlay Kenya to a locally owned co-operative.” In 2012, Finlays sold 10% of its operations to Kipsigis Highland Co-operative Society, which now has 70,000 direct and indirect shareholders across Kericho and Bomet counties.
A full plan is under development to ensure a smooth transition with no disruption to customers, according to Finlays. On completion of the sale, Browns intends to continue to run the business as it has been operated until now. The company said there would be no change in the employment arrangements for current employees of James Finlay Kenya.
Woodrow explained that following a strategic review in 2022, Finlays decided that a new strategic investor was needed to guide the venture’s long-term sustainable growth to benefit the whole community and the Kenyan economy. He said leaf tea will continue to be a critical part of Finlays’ portfolio, which has a strong global presence across the UK, Sri Lanka, Dubai, Kenya, Argentina, the US, and China.
According to Woodrow, the company decided to place greater emphasis on growing its tea and coffee extracts business, which it sees as offering strong growth opportunities.