Editorial submitted by Smart Chireru, Founder & Managing Director, Bullion Essence (Pvt) Ltd, Zimbabwe
For decades, the global tobacco industry has focused on optimizing the last mile of the value chain — branding, distribution, taxation efficiency, and regulatory navigation. Entire corporate strategies have been built around managing downstream complexity.
Yet the most structurally inefficient part of the tobacco industry has remained largely unquestioned: Where value is created.
A Blind Spot Hidden in Plain Sight
Each year, millions of tonnes of African flue-cured Virginia (FCV) tobacco are grown, cured, baled, and exported — only to be shipped thousands of kilometres for processing before being redistributed to final markets.
This is not a marginal inefficiency. It is a systemic design flaw.
African tobacco routinely crosses oceans twice before reaching consumers, despite being cultivated in regions that already possess the labor, agronomy, and logistical access required for industrial processing.
The industry has normalized this pattern. That does not make it optimal.
The Question No One Asks
The dominant question in global tobacco manufacturing has long been: Where can we process tobacco at scale, with regulatory certainty?,
That question made sense 20 years ago. Today, the more relevant question is: “Why is tobacco not processed where it is grown?” Once that question is asked honestly, many long-held assumptions begin to collapse.
Cost Is Not the Issue — Structure Is
This is not a debate about labor arbitrage or cheap inputs. The global industry already understands cost.
The real issue is structural fragmentation:
● Leaf production in Africa
● Processing in Asia or the Middle East
● Redistribution to Africa, Europe, and emerging markets
Each handover adds:
● Logistics cost
● Inventory risk
● Compliance complexity
● Quality variability
● Capital lock-up
None of these add value to the product. They are artefacts of legacy thinking.
Modern Manufacturing Has Already Moved On
Other global industries resolved this problem years ago.
Automotive, electronics, agribusiness, and even pharmaceuticals have embraced:
● Near-source processing
● Export-oriented industrial zones
● Bonded manufacturing
● Integrated traceability
Tobacco remains one of the last global industries still anchored to 20th-century supply chain logic.
Africa Is Not the Risk — It Is the Missing Link
The reluctance to process tobacco at origin is often framed as a risk question: compliance, diversion, infrastructure, governance.
But risk does not disappear by shipping tobacco elsewhere. It merely becomes less visible.
Modern processing platforms at origin can now offer:
● Full bonded manufacturing
● Unit-level serialization
● Blockchain traceability
● Independent auditability
● Export-only operations
● Zero domestic market exposure
In other words, the same controls global manufacturers demand elsewhere are applied closer to the source.
Zimbabwe: A Structural Inflection Point
Zimbabwe illustrates what becomes possible when origin processing is treated as a strategy rather than an exception.
The country combines:
● Globally recognized FCV tobacco
● Skilled agricultural and industrial labor
● Proximity to regional ports
● Export-oriented Special Economic Zone frameworks
When modern European processing technology is deployed under such structures, the result is not “African manufacturing.”
It is globally competitive manufacturing — simply relocated to where it makes the most sense.
The Industry’s Next Advantage Will Not Be Marketing
The next competitive advantage in tobacco will not come from:
● New pack designs
● Marginal tax arbitrage
● Brand extensions
It will come from supply chain intelligence.
Manufacturers who shorten their value chains will:
● Lower true cost per thousand
● Improve blend consistency
● Reduce working capital strain
● Strengthen compliance credibility
● Enhance ESG alignment
Those who do not will carry inefficiencies their competitors no longer accept.
A Provocation, Not a Prediction
This is not a call to abandon existing hubs or partners.
It is a call to re-evaluate assumptions. The global tobacco industry has mastered distribution, regulation, and branding.
It has not yet fully modernised where value is created.
That opportunity now exists.
The companies that recognize it early will define the next chapter of global tobacco manufacturing.
Smart Chireru is the Founder and Managing Director of Bullion Essence (Pvt) Ltd, an export-only tobacco processing and toll manufacturing platform being developed in Zimbabwe under a Special Economic Zone framework.
