Category: Leaf

Malawi Hopes Lower Production Will Bring Higher Prices

Malawi is expected to produce 154.7 million kg of all tobacco types this season, 6.62 percent less than last year, reports The Nyasa Times, citing a recent assessment by the Tobacco Commission (TC) of Malawi. The trade also anticipates a 4.4 percent decline in demand for this year.
The TC attributes the decline to the low prices offered for Malawi tobacco during the 2019 marketing season and excessive rainfall during the growing season, which caused the leaching of crop nutrients.
The trade hopes the decline in production will result in attractive prices this year.
“With 2020 trade demand at 161.4 million kg, the 2020 estimated production is expected to attract competitive pricing as companies will out-compete each other to satisfy their requirements,” the report states.
“Regionally, the outlook shows expected reduction in production from neighboring Zambia, Tanzania, Mozambique and Zimbabwe arising from erratic rainfall followed by drought experienced at critical vegetative stage of the crop.”
The TC has suspended the opening of the 2020 tobacco marketing season due to coronavirus, which was declared a pandemic by the World Health Organization.
April 3, 2020
Universal Appoints Senior Vice President
Universal Corp. has appointed J. Patrick O’Keefe as senior vice president of Universal Global Ventures effective April 1, 2020.
Universal Global Ventures is a wholly owned nontobacco subsidiary of Universal Corp. that holds FruitSmart, Universal’s recently acquired independent specialty fruit and vegetable ingredient processor serving global markets.
O’Keefe will oversee the company’s nascent plant-based ingredient platform and the company’s previously stated efforts to continue to build out a broader agri-products services platform.
“We are pleased to welcome Patrick to Universal Corporation as we expand and deepen our strong bench of executive talent in areas outside of tobacco,” said George C. Freeman III, chairman, president and CEO of Universal Corporation. “With almost three decades of food and beverage industry experience, Patrick brings skills that are directly relevant to our ongoing strategic and growth initiatives in adjacent industries.”
O’Keefe brings nearly 30 years of diverse, multilevel experience in the food ingredients industry. Prior to joining Universal, O’Keefe served as chief operating officer for Allen Flavors. From 2015 to 2018, O’Keefe served as CEO of the Americas for Dohler Group. From 2007 to 2015, he served as president of Finlay Tea Solutions U.S. and then CEO of Finlay’s Extracts & Ingredients. Earlier in his career, O’Keefe held roles of increasing responsibility at Sensient Flavors, Givaudan Flavors and International Flavors & Fragrances.
April 1, 2020
Pyxus Reviews ‘Strategic Alternatives’

Pyxus International is evaluating strategic alternatives to maximize value. As part of the process, the board of directors established a special committee of independent directors, which will be chaired by Martin R. Wade III.
The special committee will consider and assess a range of strategic, operational and financial alternatives, which may include a sale, recapitalization or other transaction, and will make related recommendations thereon to the full board.
Pyxus has retained Lazard and RPA Advisors as its financial advisors to assist with the strategic review process and Simpson Thacher & Bartlett LLP as legal counsel.
Pyxus previously initiated an evaluation of plans for a potential partial monetization of interests in its nontobacco subsidiaries and launched a global operations efficiency program with the aim to position the company for long-term success.
The company has not set a timetable for completion of the review and does not intend to disclose developments related to the process unless and until the company executes a definitive agreement with respect thereto or the board otherwise determines that further disclosure is appropriate or required.
March 26, 2020
Malawi Delays Marketing Season

The Malawi tobacco marketing season will be delayed due to the spread of the coronavirus.
Traditionally, the tobacco market opens between March and April.
“The decision to postpone the opening to tobacco marketing season was made following an emergency meeting with industry stakeholders,” said Kayisi Sadala, the Tobacco Commission chief executive officer. The industry will reconsider opening the market after at least a month.
March 26, 2020
Karnataka Halts Tobacco Auctions

The tobacco auction in Karnataka, India, has been halted across all 10 platforms due to a statewide lockdown to prevent the spread of coronavirus.
The auction began in September 2019 and was scheduled to close by the end of March 2020.
The suspension comes amid rising tobacco prices due to unavailability of tobacco from China.
“Unfortunately, the farmers will not be able to delay the auction endlessly as it is a perishable commodity,” said Javare Gowda, president of the Federation of VFC Tobacco Growers’ Association of Karnataka. He requested that the auction be resumed as soon as the lockdown is lifted.
March 25, 2020
Restrictions Threaten Zimbabwe’s Season
Restrictions on public gatherings to prevent the spread of coronavirus
infections are threatening to disrupt the Zimbabwean tobacco selling season, reports
The Zimbabwe Daily Mail.
The tobacco selling season attracts thousands of farmers to
Harare and selling points outside the capital to trade in Zimbabwe’s prime
foreign currency earner. Apart from farmers, thousands of traders and other
small businesses flock to tobacco auction floors in an annual ritual.
On Tuesday, President Emmerson Mnangagwa announced measures
to contain a possible outbreak, which included banning of gatherings of more
than 100 people.
March 20, 2020
Pyxus Reorganizes Its Operations
Pyxus International announced the next steps in its business transformation. The company will consolidate its emerging market branded businesses under a new operating model, implement a global operations efficiency program and streamline its senior management reporting structure.
The new operating model aligns the company’s B2C and B2B e-liquid, legal cannabis, industrial hemp, and CBD businesses and brands under FIGR Brands, a wholly owned Canadian subsidiary of Pyxus. The combination of the company’s investments in Purilum, Humble Juice Co., Criticality and Twelfth State Brands into one operating model is designed to allow Pyxus to more effectively leverage the entities’ collective strengths to build a global consumer products brand business that can deliver the next generation of THC, CBD and e-liquid consumer products to legal markets around the world.
Harvey Carroll, current president of FIGR Brands, will manage the new operating model and will report to Pieter Sikkel, Pyxus’ president and CEO.
The global operations efficiency program is currently underway and is a comprehensive review of Pyxus’ global footprint and cost structures. This review encompasses all of Pyxus’ business units, including FIGR Brands and its leaf tobacco business, Alliance One International, with the aim to create more value for its customers and shareholders and position the company for long-term success. Pyxus management will report on progress in the implementation of the global operations efficiency effort by May 1, 2020.
Effective immediately, the board of directors has appointed Martin R. Wade III as nonexecutive chairman of the board. Daniel A. Castle, founder of Castle Brand Group, will transition from being a member of the board of directors to serving as a consultant to Pyxus. Bryan Mazur, who has served as executive vice president of global specialty products, will be leaving the company as that position is being eliminated.
“Pyxus continues to transform how it operates as we work to build a more streamlined organization for the future,” said Sikkel. “The new consumer products branded business model is a natural milestone in our company’s transformation journey to deliver superior value for the benefit of our stakeholders. We remain committed to achieving long-term, sustainable growth and look forward to building a stronger Pyxus as we continue to execute against our vision to transform people’s lives so that together we can grow a better world.”
March 10, 2020
Zimbabwe Postpones Selling Season
The start of Zimbabwe’s 2020 tobacco marketing season will be delayed due to late rains, according to Patrick Devenish, chairman of the Tobacco Industry and Marketing Board (TIMB).
Last year, the marketing season commenced on March 21. Tobacco deliveries hit an all-time high of 259 million kg in 2019 but, at $2 per kg, average prices were the lowest in years.
As of Dec. 20, farmers had planted 81,977 hectares of tobacco against 79,708 hectares planted during the same period last year, according to TIMB data. Output for this year is estimated at 225 million kg.
Tobacco is one of the country’s top earners of foreign exchange, which is necessary for the importation of raw materials, fuel and pharmaceuticals among other products.

March 9, 2020
Better times ahead
The Tobacco Industry and Marketing Board (TIMB) expects higher tobacco prices in Zimbabwe this year.
Farmers received lower prices for their crops last year due to the country switching from the U.S. dollar to local currency at a 1:1 rate. This led to grossly discounted prices for the tobacco, according to Andrew Matibiri, TIMB chief executive. The average price of tobacco was 31 percent lower last year than in 2018.
“Personally, I remain very positive that prices will be much better than they were last year, and the demand for Zimbabwean tobacco is still there,” said Matibiri. “Zimbabwean tobacco is a premium product and it is wanted by all cigarette manufacturers for inclusion in their blends.”
The opening date for this year’s tobacco marketing season has not been set, but deliveries are expected to start next month. Last year, deliveries reached 258 million kg. Lower output is projected this year due to reduced hectarage and fewer growers, but deliveries will not be down by more than 20 percent, according to TIMB.
March 5, 2020
If Warehouses Could Speak
A new book explores the architectural heritage of tobacco.
By George Gay
If you have to spend time waiting in the reception area of a company operating at some level within the tobacco industry, chances are there will be available to you a number of publications, most of which will comprise newspapers and magazines that specialize in business and financial matters, and, if you’re right out of luck, a couple of dog-eared annual reports and faded promotional brochures of the company you’re visiting. Not so long ago, however, the mix of publications available for perusal would probably have been broader and would have included some coffee table tomes illustrating various aspects of tobacco and its peripheral industries. At that time, most tobacco companies had libraries varying in size from a couple books to hundreds of books, and at least one had a librarian, but I suspect that few now have such facilities, and I know that at least one fair-sized library was cast aside in the name of “efficiency” and “progress”—read: cost-cutting.
Of course, it is not possible to take the moral high ground here. While the business publications available now tend to peddle only a gratuitous version of business, many of those coffee table tomes of yore also largely told stories that businesses wanted to get across: picture-based tales of smiling farmers working in sunlit uplands, who, in reality, even if they could have been considered to be tobacco industry stakeholders, more often than not simply wound up with splinters in their hands.
But relief is at hand with the publication of a fascinating book that will appeal to those focused on the tobacco industry, those with specialized interests that include but transcend tobacco, such as architects, historians, economists, town planners and sociologists, and those simply possessed by a natural curiosity: The Tobacco Warehouses of Thessaloniki: The Architectural Heritage of Tobacco During the 20th Century.
Indeed, if it is placed in reception areas, visitors might be tempted to slip this book into their briefcases as they leave. I say this because while the book’s title is somewhat formal—its contents are based largely on an academic study—it can be entertainingly educational—for example, when the basement of a warehouse designed in 1956 and completed in 1959 is described as having been designated for use as an air raid shelter under the applicable regulations of that time.
The book, which is in Greek and English, is in A4 format and, with 450 pages, weighs in at 1.6 kg (so only the more muscular visitors will be able to slip it into their briefcases).

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Following forewords by Nikos Allamanis, who is president of the board of directors of the Hellenic Association of Tobacco Processing and Trading Industries (HATPTI) and well known to readers of this magazine, and by Olga Traganou-Deligianni, architect emeritus of the Ministry of Culture, the book is divided into chapters on the historical background of Thessaloniki and Greece’s leaf processing and global trading industries; the development of the necessary warehouses and processing facilities; an architectural analysis of those buildings; and, by far the largest chapter, illustrated descriptions of those buildings, their ownership and the ways in which they were used.
The book is worth reading, or just dipping into if you’re in a reception area, simply for the history it provides about an industry that played a huge role in the economy of Thessaloniki—for a long time the main port for Greek tobacco exports—and Greece as a whole. Some of the history will be familiar to many readers: the boost given to the industry by Greece’s accession in 1981 to what was then the European Economic Community and the blow that was delivered to that industry in 2006 with the EU’s changes to its agricultural subsidies. Meanwhile, some of the history will be familiar, I should imagine, only to those with a close association with the Greek tobacco industry. For instance, the fact that it was the first wave of warehouse development, which occurred during the period from 1923–1939, that turned Thessaloniki into the most important Greek tobacco center. But some references will surely be new to all but a few. Apparently, between 1573 and 1589, two French importers grew tobacco in the suburbs of Thessaloniki.

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The Greek tobacco industry was built by a large number of family businesses that formed and were supported by regional associations. In such a competitive environment, what had been labor-intensive operations increasingly became mechanized, and, gradually, consolidation reduced the numbers of both businesses and associations. The industry changed from being a large number of small enterprises to a small number of large enterprises with the inevitable result that many warehouses became surplus to requirements.
And in this regard, while the book is of much historical significance, more importantly perhaps, it tells of a living history in which those fighting to preserve an important industrial heritage seek to rally support from citizens, warehouse owners and government institutions. The authors of the study on which the book is based, architects Sofia Gkouvousi and Spiridon Tavlikos who were supported and helped by the HATPTI, describe 88 warehouses in Thessaloniki, some of which no longer exist, some of which are in need of redevelopment and some of which have been reconfigured already to provide such things as commercial and office space, craft units, hotels and storage.
Is it worth the effort? Would it not be better to pull down the old and build anew? Having wandered through the book and some of the streets on which those warehouses stand, I would have to come down on the side of preservation where this is practical. For one thing, I would guess that the damage caused to the environment in reconfiguring a building would generally be less than demolishing and rebuilding. But there’s more to it than that. The operation of those warehouses not only provided work opportunities, social cohesion and economic prosperity, but their design and style also heavily influenced the buildings around them and therefore provide a link and a signpost to the past, a solid grounding of the present and perhaps even a pointer to the future.
The Tobacco Warehouses of Thessaloniki: The Architectural Heritage of Tobacco During the 20th Century is published by University Studio Press.
George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit,have earned him a loyal following among Tobacco Reporter’s readers.

March 1, 2020