Tag: aoi

  • Alliance volumes increased

    Alliance volumes increased

    Alliance One International’s volume sales during the nine months to the end of December, at 251.6 million kg, were increased by 3.6 percent on those of the nine months to the end of December 2015 because of prior crop inventory sales and the timing of shipments in North America and Africa.

    But the company reported yesterday that sales had decreased by 5.7 percent to $1,105.1 million because of a product mix that had included an increased percentage of by-products rather than lamina, the El Niño weather impact of smaller crops in Brazil, the US and Tanzania, and the impact of the stronger US dollar.

    Gross profit had decreased by 2.3 percent to $149.5 million due to weather related smaller crops in certain origins and differences in product mix.

    But gross profit as a percentage of sales had improved to 13.5 percent from 13.1 percent.

    Meanwhile, volume sales during Alliance’s third quarter to the end of December, at 101.6 million kg, were down by 0.7 percent on those of the third quarter to the end of December 2015 because unhelpful weather led to smaller crops in the US and Tanzania.

    Sales had decreased by 7.5 percent to $454.5 million driven by a product mix with an increased percentage of by-products rather than lamina, the El Niño weather impact of smaller crops in the US and Tanzania, and the impact of the stronger US dollar.

    Gross profit had decreased by 5.1 percent to $65.2 million due to weather related smaller crops in certain origins and differences in product mix, while gross profit as a percentage of sales had improved to 14.3 percent from 14.0 percent, driven by differences in product mix and favorable currency impacts.

    Operating income had been unchanged at $38.7 million, while operating income as a percentage of sales had risen to 8.5 percent from 7.9 percent.

    “While it is still early, as we look to next fiscal year, La Niña weather patterns that support better global growing conditions are present and should support crop size increases in a number of key markets,” said Pieter Sikkel, CEO and president, in presenting the results. “As such, initial reports indicate larger 2017 crops that we have begun to purchase in Brazil and will start to purchase in Africa during the quarter ending March 31, 2017, which are planned to be sold during our fiscal year ending March 31, 2018.

    “The 2016 Brazilian Virginia flue-crop was abnormally low at approximately 410 million kilos versus 570 in the prior year. The 2017 crop is anticipated to be approximately 50 percent larger at 600 million kilos and current quality appears to be good and in line with expectations.

    “We are expecting similar positive crop size increases in other key markets.”

  • Jim Schneeberger to retire from AOI

    Jim Schneeberger, global business relationship director of Alliance One International and its predecessor companies, will retire on April 3, after 27 years of service. Schneeberger has served in several business relationship management positions throughout his career, most recently leading the Philip Morris International Global BRM team. Graham Kayes will take over the Philip Morris International Global responsibility in the interim.

  • PMI announces new U.S. tobacco purchasing model

    Philip Morris International is adopting a new leaf buying model in the United States. The company will transition from directly purchasing tobacco through contracts with U.S. growers to purchasing through two suppliers, Alliance One International Inc. (AOI) and Universal Corp. This new purchasing model will take effect on April 1, 2015.

    “Moving to a new system for leaf purchasing in the U.S. will help us achieve important supply chain efficiencies while remaining a major purchaser of U.S. grown tobacco,” said Nicolas Denis, vice-president leaf, PMI.

    “While we are changing our approach to buying tobacco in the U.S., PMI’s commitment to improving farm labor conditions on the farms from which we source tobacco has not changed. We require our suppliers to adhere to our practices, principles and standards, including our leading Agricultural Labor Practices (ALP) program. Through supplying leaf to PMI in many markets around the world, AOI and Universal are key partners in our efforts to implement our ALP program on the farms where we source tobacco. With these new U.S. supply agreements even more U.S. tobacco growers will come under PMI’s ALP standards,” said Denis.

    As a result of this transition, approximately 35 PMI employees based out of Richmond, Virginia, will be impacted.

    “It is unfortunate that this decision will impact some of our employees and it is our priority to provide them with the best possible support and assistance during this transition,” said Denis.

     

     

     

  • AOI to supply PMI

    Alliance One International has been selected to supply U.S. tobacco to Philip Morris International (PMI), as PMI adopts a new leaf procurement model in the United States and Canada.

    On Nov. 5, 2014, PMI announced its decision to transition from direct contracting and purchasing of tobacco from U.S. growers to sourcing its U.S. tobacco requirements from Alliance One International  and another global leaf merchant, effective for the 2015 crop.

    PMI’s supply chain modification will position AOI to expand its North American footprint to include additional tobacco growers, and further expand the availability of North American tobacco to the wider, global market.

    AOI and its predecessor companies have supplied tobacco to PMI for many decades. The two companies work closely together to advance continuous positive change in tobacco-growing communities on a global basis.

    This work includes the promotion of Good Agricultural Practices that provide growers knowledge and skills to produce higher quality cash and food crops with improved yields, while striving to mitigate environmental and social impacts. Alliance One says it is committed to action-oriented social responsibility and the best practices set forward in its Agricultural Labor Practices code.

    “The U.S. tobacco market has undergone substantial changes over the past decade, and continues to evolve at a rapid pace,” said Pieter Sikkel, president and CEO of Alliance One International. “PMI remains committed to sourcing in the U.S. market, and this transition ensures that PMI will continue to purchase high quality U.S. leaf through an optimized and efficient supply chain, while Alliance One expands its U.S. grower base and full service business. “

    “We remain proudly committed to our current, well-established U.S. grower partners and look forward to working with a new grower base as well as other service providers,” said Herbert Weatherford, AOI’s regional director for North and Central America. “The broader grower base better positions Alliance One to expand the availability of U.S. and Canadian tobacco to domestic and international markets.”