Browns Plantations Becomes World’s Top Tea Producer With 100M kg Annual Output

A new titan has emerged in the global tea industry. Browns Plantations PLC, a subsidiary of Sri Lanka’s diversified conglomerate LOLC Holdings Group, has officially cemented its position as the world’s largest tea producer. This monumental achievement follows the strategic acquisition of James Finlay Kenya’s tea estates business and, implicitly, a significant portion of the Lipton tea supply chain, which has collectively boosted Browns’ annual production by an impressive 85 million kilograms. This acquisition, finalized in May 2023, now brings Browns Plantations’ total global tea output to approximately 100 million kilograms annually, a figure that redraws the map of global tea production.

Kapila Jayawardena, the Managing Director and CEO of LOLC Holdings Group, expressed profound satisfaction with this strategic leap. “The Group has firmly positioned itself in the global tea industry, now holding the title of the largest tea producer worldwide,” Jayawardena proudly declared. This move is not merely about scale; it’s a calculated maneuver to influence the global tea market and drive a paradigm shift towards value-driven growth, particularly in major producing regions like Kenya.

The Genesis of a Global Tea Powerhouse: Strategic Acquisitions

The journey to becoming the world’s largest tea producer for Browns Plantations is intrinsically linked to its ambitious acquisition strategy, particularly the landmark deal with James Finlay Kenya.

The Legacy of James Finlay Kenya

James Finlay Limited has been an indelible part of Kenya’s tea landscape for over a century, establishing its first tea estates in the colonial era. Known for its vast, high-quality plantations in the verdant Rift Valley region of Kenya, particularly around Kericho, the company has historically been a cornerstone of the Kenyan tea industry. Its estates were not just large-scale producers; they were integral communities, providing employment and social services to thousands. The Finlays brand became synonymous with premium Kenyan tea, supplied to major blenders and consumers worldwide. The acquisition of such a storied and productive asset immediately catapulted Browns Plantations to a new echelon in global tea production.

The sale included all segments of James Finlay Kenya Ltd’s tea estates business, encompassing the vast tea farms, processing factories, and associated infrastructure. Critically, the Saosa tea extraction facility was excluded from the sale and remains under Finlay’s ownership. This strategic carve-out highlights Finlay’s shift towards higher-value tea extracts and ingredients, rather than bulk tea production. Despite the sale of the estates, the continuity of the relationship is assured, as the tea extraction business will continue to source leaf tea, timber, and other services directly from what is now Browns Plantations’ Kenyan operations, ensuring uninterrupted supply for existing customers. This guarantees a stable off-take for Browns’ new Kenyan assets and allows Finlays to maintain its specialization.

The Lipton Connection

While the news snippet primarily highlights the Finlays Kenya acquisition, the mention of “Lipton tea” implies a broader strategic context. Lipton, a globally recognized tea brand, sources its tea from various estates worldwide. With the acquisition of Finlays Kenya, which was a significant supplier to Lipton, Browns Plantations implicitly becomes a crucial link in Lipton’s global supply chain. This means Browns is not just acquiring land and production capacity but also integrating into the supply network of one of the world’s most ubiquitous tea brands, further solidifying its market position.

Rationale for the Acquisition: A Global Vision

For Browns Investments PLC, the acquisition was a clear strategic move towards global dominance. It provided:

• Instant Scale: The addition of 85 million kilograms of production instantly transformed its capacity.
• Geographic Diversification: Gaining a significant foothold in Kenya, the world’s largest tea exporter, diversified its geographical risk and production base beyond Sri Lanka.
• Access to High-Yielding Assets: Kenyan tea estates are known for their high yields and efficiency, offering a competitive advantage.
• Market Influence: Becoming the largest producer provides Browns with greater leverage in global tea markets, potentially influencing pricing and quality standards.

The acquisition of such a significant and historic operation in the heart of Kenya’s tea country marks Browns’ first major foray into the Kenyan tea industry, which it views as an “exciting opportunity for future growth.” This suggests that the Kenyan investment is not a one-off but potentially the first step in a broader expansion within the region.

Browns Plantations and LOLC Holdings: A Conglomerate’s Strength

Browns Plantations is a highly successful and diversified conglomerate, forming a vital part of the LOLC Holdings PLC Group, headquartered in Colombo, Sri Lanka. LOLC (Lanka ORIX Leasing Company) is renowned as one of the largest and most profitable listed corporations in Sri Lanka, boasting a diverse portfolio that spans financial services, leisure, healthcare, trading, and agriculture. This robust financial backing and diversified business model provide Browns Plantations with significant capital and strategic depth to pursue its global ambitions.

Browns Plantations itself has a proud heritage in operating plantation businesses in Sri Lanka. It owns and manages key tea companies, including:

• Maturata Plantations 
• Hapugastenne Plantations PLC 
• Udapussellawa Plantations PLC

Together, these Sri Lankan operations comprise 49 individual estates covering over 30,000 hectares and employing more than 10,000 individuals. This vast existing experience in managing large-scale tea plantations, coupled with a deep understanding of the industry’s complexities, provides a solid foundation for its international expansion.

The Global Production Footprint and Future Targets

Browns Plantations’ current annual tea production of approximately 100 million kilograms is a composite of its operations across multiple geographies:

• Sri Lanka: Around 17 million kilograms, showcasing its traditional strength and commitment to its home market.
• Overseas Operations: A dominant 85 million kilograms sourced from its newly expanded operations in Kenya, alongside existing smaller footprints in Tanzania, Rwanda, and China. This highlights the transformative impact of the Kenyan acquisition.

Looking ahead, the company has set an ambitious target: to achieve a total global production of 150 million kilograms within the next few years. This 50% increase from its current level signifies aggressive growth plans, likely through further strategic acquisitions and optimizing current assets. Jayawardena also provided context for the broader Sri Lankan tea industry, estimating its sustainable upper limit between 200 and 250 million kilograms, indicating room for growth for Sri Lankan players while underscoring the scale of Browns’ global ambitions.

The Kenyan Tea Paradox: Volume vs. Value

One of the most critical observations made by Kapila Jayawardena highlights a significant paradox in the Kenyan tea industry: “Kenya produces more than twice the volume of tea compared to Sri Lanka, but the export income remains lower.” This statement points to a fundamental challenge and opportunity within Kenya’s tea sector, where a focus on bulk production has historically overshadowed value addition.

Understanding the Disparity

• Production Volume: Kenya is consistently the world’s leading exporter of black tea by volume. Its climate, soil, and efficient large-scale plantation model contribute to very high yields per hectare compared to many other tea-producing nations.
• Export Income: Despite its colossal production, Kenya’s tea export earnings often fall behind those of countries like Sri Lanka (famous for Ceylon Tea), which produces significantly less.
• The Auction Model: A significant portion of Kenyan tea (over 90%) is sold through the Mombasa Tea Auction, the largest tea auction center in the world. While efficient for bulk sales, this model often commoditizes tea, reducing the opportunity for higher prices associated with branded or specialty teas.
• Value Addition in Sri Lanka: Sri Lanka has successfully diversified its tea exports beyond bulk tea. It has invested heavily in value addition, including:
  • Branding: “Ceylon Tea” is a globally recognized brand, commanding premium prices.
  • Packaging: Exporting tea in branded consumer packs, rather than in bulk.
  • Blending: Creating unique blends and flavors.
  • Specialty Teas: Focusing on orthodox teas, green teas, and specialty varieties that fetch higher prices.
  • Direct Sales: A larger proportion of Sri Lankan tea is sold directly to buyers and brand owners, bypassing traditional auctions and allowing producers to capture more value.

Overproduction Concerns and Browns’ Vision

Jayawardena’s concern about “the risk of overproduction” in Kenya stems from the volume-driven approach. An oversupply of generic bulk tea can depress prices, diminishing earnings even with high production volumes. Sri Lanka, with its more diversified and value-added strategy, has largely managed to avoid this pitfall.

As a “significant player in the Kenyan tea industry” now, Browns Plantations is actively engaging with stakeholders – including the Kenya Tea Development Agency (KTDA), which manages smallholder farmers, and government bodies – to address this issue. Their vision is clear: “explore how the Kenyan market can adopt a more value-driven approach,” explicitly stating the intention to “follow Sri Lanka’s example to enhance export earnings rather than merely focusing on volume.” This would entail:

• Investing in Processing and Packaging: Upgrading existing factories and building new ones for value-added products.
• Brand Development: Creating distinct Kenyan tea brands for international markets.
• Direct Market Access: Establishing more direct sales channels to blenders and consumers worldwide.
• Product Diversification: Exploring specialty teas, herbal infusions, and other tea-based products.
• Sustainability and Certification: Emphasizing ethical and sustainable practices to cater to discerning global consumers willing to pay a premium.

This strategic shift, if successfully implemented, could unlock significant untapped revenue potential for Kenya’s tea industry, benefiting both large plantations and the millions of smallholder farmers who contribute a substantial portion of the nation’s tea.

Optimizing Land Use: Beyond Tea Cultivation

Beyond its core tea business, Browns Plantations is also exploring innovative ways to maximize the utility of its extensive land holdings in Africa. Jayawardena’s emphasis that “Land must be utilised to its fullest potential, and we need to consider the best use of the land,” underscores a modern approach to plantation management that goes beyond monoculture. His assertion that “underutilised land is of no benefit to any country” highlights an economic philosophy focused on productivity and diversification.

This involves assessing “real estate development opportunities in Africa by converting underutilised plantation properties.” Such diversification could include:

• Eco-Tourism and Hospitality: Leveraging the scenic beauty of tea estates for tourism, developing eco-lodges, and offering tea tourism experiences, which can generate non-agricultural revenue and create new jobs.
• Residential and Commercial Developments: In areas close to urban centers, converting parts of less productive land for residential or commercial use, capitalizing on rising property values.
• Renewable Energy Projects: Developing solar farms or other renewable energy installations on suitable non-agricultural land within the estates.
• Other High-Value Agricultural Crops: Diversifying into other crops that may offer higher returns or better suitability for certain land parcels, such as avocados, macadamia nuts, or other horticultural products, subject to market demand and feasibility.

While no structural changes have been immediately implemented in the recently acquired Lipton and Finlays plantations, the company’s commitment is to a “holistic evaluation of land use,” ensuring a balance between agriculture and “responsible and economically viable diversification where appropriate.” This approach aims to enhance overall profitability while adhering to sustainability principles and benefiting local communities.

Future Global Expansion and Industry Impact

Browns Plantations’ strategic vision extends far beyond its current acquisitions. Jayawardena noted that the company “will continue to expand its operations across Africa, Asia, and South America within the tea industry.” This indicates a clear strategy for sustained global growth, seeking out new opportunities for investment, acquisitions, or partnerships in other key tea-producing regions. Potential expansion areas might include:

• Other African Nations: Exploring opportunities in countries like Uganda, Malawi, or other parts of Tanzania and Rwanda, where tea cultivation is significant.
• Asian Markets: Looking into opportunities in India, Vietnam, or Indonesia, which are major tea producers.
• South America: While a smaller tea-producing region globally, certain areas could offer unique opportunities for specialty teas or new cultivation techniques.

This global expansion strategy positions Browns Plantations not just as a producer but as a significant consolidator in the fragmented global tea industry. Its scale allows for economies of scale in procurement, processing, and distribution. Its commitment to a value-driven approach, particularly in Kenya, could serve as a model for other producers, potentially influencing global tea trading practices.

Community, Sustainability, and Workforce Welfare

Crucially, the success of large-scale plantation operations is inextricably linked to their impact on local communities and their commitment to sustainability. Browns Investments PLC was chosen as the approved buyer for Finlays Kenya due to its “strong legacy of fostering growth in its tea estates while prioritising sustainability and support for its workforce and local communities.” This commitment is vital.

• Workforce Support: Tea estates are major employers. Prioritizing the welfare of its more than 10,000 employees in Sri Lanka, and now a substantial workforce in Kenya, means ensuring fair wages, safe working conditions, access to healthcare and education, and opportunities for skill development.
• Community Engagement: Responsible plantation management extends to investing in local infrastructure, education, and health initiatives in the surrounding communities, fostering goodwill and sustainable relationships.
• Environmental Stewardship: Sustainability is paramount in agriculture. This involves practices like:
  • Soil Health: Implementing organic farming, composting, and proper fertilization to maintain soil fertility and prevent erosion.
  • Water Management: Efficient irrigation, rainwater harvesting, and protecting water sources.
  • Biodiversity: Protecting local ecosystems and promoting biodiversity within and around the plantations.
  • Climate Change Adaptation: Implementing measures to cope with changing weather patterns and reduce the carbon footprint of tea production.

Browns Plantations’ stated commitment to these principles is essential for its long-term success and for maintaining its social license to operate in its expanded global footprint.

Conclusion: A New Era for Global Tea Production

The acquisition of James Finlay Kenya by Browns Plantations PLC marks a definitive shift in the global tea industry’s landscape. It is not merely a transaction of assets but a strategic move that elevates Browns to the pinnacle of tea production, wielding significant influence over future market dynamics.

The ambitious target of 150 million kilograms in global production, coupled with a keen focus on value addition, particularly in key regions like Kenya, underscores a forward-thinking vision. By advocating for a shift from volume-centric to value-driven approaches, Browns aims to elevate the entire industry, ensuring better returns for producers and ultimately, a more sustainable future for tea-growing communities. Furthermore, its holistic evaluation of land use signals a progressive approach to managing vast agricultural assets, exploring diversification while maintaining core farming operations.

As Browns Plantations continues its expansion across Africa, Asia, and South America, its journey will undoubtedly shape the future of tea, emphasizing efficiency, quality, and a renewed focus on unlocking the full economic potential of this cherished beverage. The move signals a vibrant new chapter for global tea, with a Sri Lankan conglomerate leading the charge towards a more integrated, value-conscious, and sustainable industry.

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Photo source: Google

By: Montel Kamau

Serrari Financial Analyst

26th June, 2025