Kanungu | RedPepper – A cold war over jobs is brewing up within southwestern Uganda’s Tea sector and in particular Kanungu district which boasts of six Tea processing factories out of the total 14 in the region.
Daily Pepper has learnt that if not handled with caution, it may affect the Tea sector in the region because it involves a big player—Kayonza Growers Tea Factory.
At the centre of this war are Kayonza’s former staff, area politicians and some businessmen who are all jostling for influence and jobs at the factory.
Some have reached to an extent of ganging up against current Kayonza Board of Directors chairman, Gregory Mugabe whom they want to be pushed out.
Ladies and gentlemen, we are not suggesting that Gregory is a saint. Not at all. He is human like anyone else. There could be one or two things (or more) that have gone wrong under his leadership but much of the demonization he has previously and still enduring may be part of these broader schemes (by adversaries) to get him out of the way so that “a more cooperative, accommodative and easy to manipulate” person becomes BoD chairman.
In this analysis based on documents obtained and as well interviews with those close to him and his nemeses, we reveal why Gregory is being targeted.
Among the crimes he is being accused of is allegedly sidelining a section of staff in favour of others. Some of those reportedly sidelined have since been even fired from the factory.
Despite overwhelming evidence by some of the fired staff being involved in financial improprieties and as well not performing to Board’s expectations, they feel Gregory should have protected them and they may now seek revenge against him.
For instance, there is James Mugarura, a former Human Resource officer who was fired in 2019. He was dismissed for reportedly “irregular misconduct” involving funds to a tune of Shs3,420,000 meant to pay a service provider (HR & Management Agency Ltd) who had conducted a two days training for Kayonza.
He insisted it wasn’t ‘intentional’ but Kayonza BoD parted with him. He would later scoop another job at Rwamwanja refugee settlement camp located in Kamwenge district in western Uganda but sources say he has also since left that job following an incident involving a Burundian refugee girl.
There is also Christopher Turyatemba, a former General Manager at Kayonza. He had a contract of three years. The Board of Uganda Tea Development Agency which had seconded him to Kayonza because of their deeper collaboration and understanding with the latter reportedly evaluated his performance and found wanting and decided not to renew his contract.
Accordingly, the Board evaluation criterion found him to have failed to manage stakeholder interests, especially farmers, suppliers, employees and general performance was reportedly wanting.
Another disgruntled staff member is one Solomon who was a one-time factory worker but he was fired. He now works as a pump attendant at a certain petrol station in Mutungo, Kampala.
Insiders also intimated to us that Caleb Kipande Twesimire, the former Board chairperson for Kayonza is also reportedly among those who are praying for Gregory’s exit.
Whereas, just like other companies have well laid down procedures to fire a staff which can’t be a one-man decision, these former staff reportedly feel Gregory didn’t do much to protect them.
Another crime Gregory is accused of is reportedly allowing the factory to sink in debts reportedly arising from loans to expand operations and also reported failure by management to ensure the company’s debtors and creditors pay on time which is the role of management that oversees the day to day operations but not the BoD chair.
However, according to sources, the truth is that Gregory found a lot of things wanting at Kayonza and embarked on expansion projects. Some involved constructing offices and others to do with expanding production lines from the current three to five.
This, therefore, prompted Kayonza Board to secure an USD4million loan from social impact investor Oikocredit-Netherlands. Kayonza is paying back this loan in a period of nine years.
This website understands that the Kayonza Board forecasted the excess green leaf situation because the government was planting and issuing free seedlings to farmers without investing in processing and it couldn’t sit back and see the cash crop being wasted.
So, with Gregory as BoD chair, it moved quickly to start another factory in Mpungu using the acquired loan. Kayonza with three lines can ably process 18,000,000 Kgs of green leaf annually.
However, in 2022, Kayonza is expected to receive 25 000,000 million Kgs of green leaf. This implies that 7, O00, 000 Kgs of leaf would be wasted if Mpungu factory is not operational. This will also benefit farmers who were formerly affected by distance to the factory.
“The appraisal for the project was done in 2017 when prices were for Kayonza average auction prices at USD 2.30. But for the last two years due to Covid-19 prices at the world market collapsed to very low levels of USD 1.2.
This has made payments to farmers and loans a bit difficult. Global consumption of Tea has declined and this is reflected in the prices currently we are getting.
Despite Covid effects, Kayonza has remained steady and ranked the best at auction in Mombasa for a very long time and all this is happening because of the good leadership at the factory facilitated by the Board chaired by Gregory,” an official at Kayonza explained to this website.
More so, there are voices pushing for an Annual General Meeting which will pave the way for elections of new directors and many parties are interested in these positions.
For the uninitiated, Kayonza is presently owned by 8425 shareholders/out-grower Tea farmers. Normally, such an AGM attracts all farmers who vote for these directors. According to Kayonza Growers Tea Factory Ltd articles of Association, the members are expected to attend the AGM physically in person or by proxy and when this is necessary half of the shareholders must form a quorum.
However, this cannot happen due to Covid-19 restrictions meaning they have to wait. So, those interested in director positions feel Gregory is frustrating the AGM as if he is the one who brought Covid-19 and are all out brazenly seething despite even the presence of a court order halting the AGM as long as Covid-19 is still raging.
For instance, Mugarura, a former Human Resource officer is reportedly pushing to have his wife Grace who works with Post bank appointed a director to represent women.
Her father Moses Twesigye is also an accountant at Kayonza. Now that he is jobless, he feels these can pave the way for his return. Insiders also whispered to us that Kipande, the former Bod chairperson is also positioning himself to contest as a director when an AGM is held. That also one of his brothers’ sons Abel Kipande and Nathan Kipande are campaigning to be elected directors in Kayonza and Mp Kinkizi west respectively.
All these parties are reportedly worried that because of Covid-19 restrictions, Gregory’s tenure as BoD chairman will be extended and that is why they are reportedly panicking. Farmers also are also reportedly thinking of extending Gregory’s term since they have seen his achievements in a short time.
We have also learnt that some big political players in the district are not happy with his decision to stand for Kinkizi West Member of Parliament in recently concluded general elections. Whereas he lost by a simple margin to James Kaberuka Ruggi, it did not go well with some players. They now feel he may leverage on his Kayonza job to mobilize massively and bounce back strongly in 2026 and the only way to nip in bud these efforts is to plot his ouster from Kayonza.
We have also learnt that Gregory’s stellar performance and his thick-skinned nature has rattled his adversaries and other Tea players in the region and all these reportedly see him as an insect that should be crushed there and then. For instance, when Kayonza started a new factory in Mpungu, one of Tea players in the region, tycoon Musinguzi Garuga reportedly rushed to set up a withering unit in the same area and buy Tea leaf cash.
The target is reportedly to frustrate Kayonza efforts not to get leaf and he becomes the only Tea investor in the region. This has been blamed also on absence of policies and laws to regulate the sector which the likes of Garuga are taking advantage of. “If there was a policy and law his [Garuga] investment in Mpungu would not be allowed since Kayonza already has a factory soon to be commissioned to serve that area,” an official at Kayonza stressed and went on to drive his point castigating Garuga’s underhand methods “
Kayonza invests in the procurement of NPK 25:5:5 fertilizer for Tea farmers. This is imported from China, Russia or Mauritius. Annually Kayonza imports 25000 to 30,000 bags depending on the cash flow. Each bag costs about USD 32. Over time our competitor [Garuga] does not give enough fertilizer or at times does not give at all but targets the green leaf from farmers who got fertilizer from Kayonza and buys the leaf cash. This has seriously affected Kayonza revenues because every year USD 960,000 is injected in fertilizer procurement and Garuga buys the leaf which is the long run will constrain Kayonza.”
These are reportedly some of the bad policies Gregory is fighting against something that has not gone well with other Tea players hence amplifying the war against him.
WHAT MAKES GREGORY TICK
Because of his stellar performance, Gregory’s adversaries feel farmers (who are shareholders) are ready to reward him with another term as Chairman BoD and this is their justification: “The public knows very well how Gregory has transformed Kayonza Growers Tea factory by building the 3rd production line; constructing a subsidiary factory in Mpungu; winning green leaf international awards, USD4m loan; maintaining the quality of Tea that conforms to the international standards; helping communities surrounding the Tea growing areas through corporate social responsibility; keeping the price of Kayonza Tea in Mombasa on top; observing and maintaining the selling word of Kayonza Tea; keeping the factory running well amid global challenges in Tea sector and sabotage from competitors within the same industry; becoming Chairman Uganda Tea Association; becoming a director in the East Africa Tea Association and hence controlling over 10 Countries in Tea production; keeping and maintaining the supply chain even amid the pandemic that has greatly affected the price of the cash crop; and above all, keeping the world consuming the beverage that has substances that keeps the brain active.”
Watch this space!