Tobacco Reporter announces the recipients of its 2015 Golden Leaf Awards.
TR Staff Report
Tobacco Reporter announced the winners of its 2015 Golden Leaf Awards during the Global Tobacco & Nicotine Forum gala dinner on Sept. 16 in Bologna, Italy. Recipients accepted trophies for their accomplishments in five different categories—Most impressive public service initiative, Most exciting newcomer to the industry, Most promising product introduction, BMJ Most committed to quality and Most outstanding service to the industry. The Golden Leaf Awards are sponsored exclusively by BMJ.
Alliance One Tobacco Malawi
Alliance One Tobacco Malawi (AOTM) received a Golden Leaf Award in the “Most impressive public service initiative” category for its reforestation program in Malawi.
In Malawi, tobacco provides jobs for 430,000 people and contributes 60 percent of the country’s foreign exchange earnings.
But while Malawi’s “green gold” provides substantial economic benefits, the production of tobacco also consumes natural resources. In 1990, more than 47 percent of the country was tree-covered, but, by 2010, 16.9 percent had been lost. According to Alliance One Tobacco Malawi, 7 percent of the wood consumed in Malawi is used in tobacco production, either as a construction material for building barns or for tobacco curing.
Eager to address the environmental impact of tobacco growing, Alliance One International’s local affiliate, Alliance One Tobacco Malawi, has worked hard to improve the success rate of its forestry program. In partnership with customers, it is now growing trees on commercial plantations. Beginning with the 2013–2014 crop season, Alliance One Tobacco Malawi started delivering firewood to contracted farmers, reducing pressure on unsustainable and indigenous wood.
Alliance One Tobacco Malawi’s holistic approach to wood resource management resulted in remarkable success in the 2014–2015 crop season. The company provided its customers with tobacco that is grown from 100 percent sustainable sources. It distributed 5,707,119 seedlings and planted almost 6 million trees across smallholder farms, commercial farms and government plantations.
Alliance One Tobacco Malawi has also outlined a series of objectives to achieve by 2020, which include:
- All wood for tobacco used for tobacco curing will be from a sustainably grown source.
- Curing wood for both commercial and smallholder FCV growers will come from AOTM plantations. FCV growers should have their own woodlots.
- By the end of the 2019–2020 crop season, all AOTM burley farmers will be curing their tobacco in live barns.
SCM/TDC received a Golden Leaf Award in the “Most promising product introduction” category for its Genesis e-cigarette machine.
With the vast majority of e-cigarette hardware currently being produced manually in China, SCM/TDC recognized an opportunity to improve the quality of such products through automation. As regulation of the e-cigarette industry takes effect, quality and safety requirements will become much stricter, and many of the handmade products will fall short of the new standards.
To meet this increased demand for safer products, SCM/TDC has developed a machine—the Genesis—to automate parts of the production process and bring production quality up to the high level that is common in the tobacco industry.
The machine is built modularly to accommodate next-generation products and future product design changes, which are likely, given the fast development of e-cigarette technology.
One of the most vital parts of the production process is testing the cartridge or disposable. The Genesis subjects every unit to a smoke test or resistance check, and quality control is carried out quickly and with great accuracy. This ensures that only products of the highest quality will end up in the hands of customers and that e-cigarette manufacturers will be able to comply with the strictest regulatory requirements.
Headquartered in the Netherlands, SCM and TDC are members of the ITM Group, a global provider of machinery for the tobacco industry.
Stand Point Vapor
Stand Point Vapor (SPV) received a Golden Leaf Award in the “Most exciting newcomer to the industry” category.
Headquartered in Shanghai, China, the company was established in 2014 to provide the most consistent and reliable e-liquids, e-cigarettes and accessories, as well as snus, with world-class customer care service.
The company’s mission is to dramatically enhance customers’ experiences with new tobacco products.
SPV is a fully owned subsidiary of Huabao International Holdings, a Hong Kong-based market leader in China’s tobacco and food flavors and fragrances industry. Backed by the expertise and resources of Huabao International Holdings, SPV has an unparalleled global supply chain, allowing it to secure the world’s best-quality raw materials, process them into finished goods and distribute them around the world.
SPV is also the first massively promoted e-cigarette brand in China. The company is looking to expand internationally and is currently looking for strategic partners in the EU and the U.S.
Universal Leaf Tobacco Co.
Universal Leaf Tobacco Co. received a Golden Leaf Award in the “BMJ Most committed to quality” category for its commitment to quality and excellence throughout the tobacco supply chain, as demonstrated by a variety of projects and initiatives.
Headquartered in Richmond, Virginia, USA, Universal is the world’s leading leaf tobacco supplier and has long been a vital link in the global tobacco supply chain. The company procures, finances, processes, packs, stores and ships leaf tobacco for sale to manufacturers of consumer tobacco products throughout the world.
Universal’s leading position is based on its operating presence in all of the major tobacco sourcing areas; its ability to meet customer style, volume and quality requirements; its expertise in dealing with large numbers of farmers; its long-standing relationships with customers; its development of processing equipment and technologies; and its financial position.
For tobacco production to thrive, the company believes that the supply chain must be preserved and improved through sound production and processing techniques and by conducting business according to ethical standards that protect and serve growers, employees, communities, the environment, customers and shareholders.
Those at the beginning of the chain—the tobacco growers—must be able to sustainably produce and profit fairly from their crops. At the other end of the supply chain, tobacco product manufacturers are increasingly demanding not only quality leaf but quality, compliant leaf.
Universal manages to simultaneously satisfy, in a competitive manner, these vastly different yet interdependent stakeholders through its investments in cutting-edge Extension services, good agricultural practices, research, training and social responsibility initiatives.
The company employs more than 27,000 workers and conducts its business in more than 30 countries on five continents.
U.S. Tobacco Cooperative
U.S. Tobacco Cooperative (USTC) received a Golden Leaf Award in the “Most outstanding service to the industry” category for its contributions to the sustainability of U.S. flue-cured tobacco production.
Based in Raleigh, North Carolina, USA, and comprising more than 850 member growers throughout North Carolina, South Carolina, Virginia, Georgia and Florida, USTC is the largest grower-owned marketing cooperative in the U.S. The cooperative also has a compliant and efficient processing facility located in Timberlake, North Carolina.
Whereas the major leaf suppliers will return a dividend to their shareholders and investors, USTC reinvests most of its profits in its contracted tobacco growers. In the past five years, the company has declared patronage dividends of $37.9 million to its member growers, including $19.8 million in cash. USTC’s patronage dividend gives its growers the opportunity to invest in efficiencies, which improves the U.S. flue-cured production model in terms of the environment, people and the planet.
Volume and pricing predictability are essential for growers’ viability and the sustainability of their flue-cured crop. As global and domestic demand fluctuates according to sales of manufacturers’ smoking products, USTC’s patronage dividend helps growers offset the impact of supply/demand cuts in contract volumes and is paramount in their ability to invest in growing high-quality, compliant flue-cured tobacco.
The patronage dividend is not a premium, bonus or subsidy, and it does not increase the cost of the tobacco to the end user—it is purely the distribution of profits made by USTC from its sales of leaf and related products back to its grower members.
The company has also passed $14 million in tax deductions to its growers through the Section 199 Domestic Production Activities Deduction, which offsets most of the taxes owed on the dividend.