Operational Value Determinants on the Financial Performance of Kenya Tea Development Agency-Managed Factories in Kericho County, Kenya

The study investigates the effect on financial performance by the value determinants considered necessary for improved financial performance at Kenyan tea plantations that are controlled by the Kenya Tea Development Agency (KTDA) in Kericho County, Kenya, in the context of continued falling profits. The rationale behind the study was based on sustained reductions in profits as well as inequality in bonuses paid to regional divisions and an upward trend in production cost which highlighted an empirical void of research and knowledge transfer on whether green leaf supply steadiness, tea quality controls, capacity utilization and energy cost controls can contribute to improved factory profit levels together. The study was anchored on four theories namely: Modern Portfolio Theory and Modigliani and Miller Capital Structure Theory. Correlational research design was employed. The study philosophy was based on the positivism paradigm. Primary data was obtained from 36 purposively selected staff from management and operational staff in six KTDA-controlled factories through use of Likert-scaled questionnaires. Data analysis was done through descriptive statistics and multiple regression analysis with the use of SPSS version 27. The result of the multiple regression analysis showed that the four independent variables together explained 67.1% (R2 = 0.671, F = 14.810, p < 0.001) of financial performance. Tea green leaf supply stability (β = 0.276, p < 0.001) was found to be the most positive predictor of financial performance. The order of predictors on the model by standardized betas was: tea green leaf supply stability (β = 0.276, p < 0.001), energy cost management (β = 0.177, p = 0.007), capacity utilization (β = 0.161, p = 0.041) and tea quality management (β = 0.108, p = 0.036), thus contributing to the rejection of all four null hypotheses. The study concludes that integrated operational value management is key for revenue growth and profitability. The study recommends that the plantation should make strategic energy investment, consolidate supply from the farmer-level, implement vigorous quality control and make production scheduling at the maximum state.

The ability of agro-processing industries to maintain their operations

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