Relationship between Modes of Tea Plucking and Profit Margins in Finlays Tea Estates in Kenya
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Date
2014-06-27
Authors
Koskei, Raphael K.
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Abstract
Tea plucking constitutes a significant proportion of the total cost of production of tea.
Hand plucking method has been the traditional mode of plucking but is becoming
increasingly unpopular primarily because of its low productivity resulting in high
plucking cost which translates to reduced profits. The ever escalating cost of production
on tea estates has necessitated the adoption of alternative means of harvesting tea by use
of special shears or plucking machines. These two methods are potential alternatives
owing to increased productivity but their effects on yields and made tea quality hence
prices casts doubt on their viability to increase profitability. This study formed the basis
of establishing the relationship between mode of tea plucking and profit margins. The
study focused on the nine tea estates ofFinlays (K) Ltd from the year 2008 to 2012. The
study was conducted via well structured questionnaires to provide primary data.
Permission was sought from the Finlays management to carry out this research and the
confidentiality of the respondents will be assured by requesting that they do not indicate
their names on the questionnaire. The Yamane's formula was used to sample respondents
who were clustered into four functional group. A stratified systematic sampling technique
was used to select respondents from the target population. Validity and reliability of the
data was measured using Cronbach's alpha reliability coefficient. Data was analyzed
using SPSS and descriptive statistical methods and presented using tables, graphs. The
study showed that there was a significant relationship between the mode of plucking and
profit margins. Mechanical tea plucking was found to be the most profitable followed by
shear plucking. Hand plucking was the least in terms of profitability. These findings were
largely attributed to the levels of productivity of each mode. Mechanical tea plucking and
shear plucking modes if adopted translates to increased profitability and are
recommended for adoption. The study is of importance to stakeholders and entrepreneurs
seeking to understand tea business dynamics and means of improving cost effectiveness
and market competitiveness.
Description
Department of Business Administration, 59p 2013