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Njeru Industries Limited, a family-run tea company owned by Kenyan businessman Henry Njeru, was placed under administration on September 3 by a court order issued under the Insolvency Act. The move highlights growing challenges in Kenya’s $1.3 billion tea sector.
Court appoints administrators at Njeru Industries
The court appointed insolvency practitioners P.V.R. Rao and Swaroop Rao Ponangipalli as joint administrators, transferring control of the company’s operations and assets from its directors. Creditors have until Sept. 30, 2025, to submit their claims.
Kenyan tea exporters are having a hard time right now because auction prices are going down, the weather is unpredictable, and production costs are going up. Every day, Njeru Industries in Meru processes tens of thousands of kilos of green leaf. Smallholder farmers grow the green leaf.
Farmers, creditors face uncertainty
Court filings do not detail the specific creditor actions that led to the administration. Industry observers say cash-flow issues are common, often stemming from delays in export payments while farmers still need to be paid promptly.
Rao and Ponangipalli from Tact Consulting are now in charge of Njeru Industries. They have handled a lot of bankruptcies in Kenya. They are responsible for keeping the company's value safe and deciding if it should be sold, restructured, or liquidated.
The government has left smallholder farmers unsure of when they will get paid, creditors waiting to get their money back, and workers in Meru worried about losing their jobs. This problem has gotten a lot of attention in Kenya's tea-growing areas, where other factories are having the same problems. Kenya's agribusiness is having trouble with money.
Kenyan agribusiness is under financial stress
Henry Njeru, who owns Njeru Industries, grew the company by adding specialty teas, such as purple and orthodox teas. This got the attention of exporters and investors. The company's money problems show how hard it is for Kenyan agribusinesses to balance their desire to grow with the reality of cash flow.
Njeru Industries' problems are similar to those that other agricultural exporters in Kenya are facing, such as changes in global demand, currency fluctuations, and rising costs of doing business.
