Tag: Cavendish Lloyd

  • Farmers Earn $1.3 Million From Shisha Leaf

    Farmers Earn $1.3 Million From Shisha Leaf

    Photo: Cavendish Lloyd

    Farmers in Zimbabwe have earned $1.3 million so far after selling 92 percent of the projected shisha crop size this marketing season, reports The Herald. The season is coming to a close with only one outstanding sale before the 2024 marketing season ends.

    Yield projections dropped from 800,000 kg to 500,000 kg due to the El Nino weather pattern, which caused drought and negatively affected the 2023/2024 agricultural season.

    Recent Tobacco Industry and Marketing Board statistics showed that growers sold 387,559 kg of shisha leaf valued at $1.27 million. The average price dropped from $3.44 per kilogram to $3.28 per kilogram. The highest price of the season was $5.70 per kilogram, and the lowest price of the season was $0.75 per kilogram. There has been an 8 percent rejection rate.

    “We are left with only one sale to clear all the produced shisha crop,” said Tinashe Mukadzambo, CEO of Cavendish Lloyd, the country’s sole shisha buyer.

    The 2024/2025 season is expected to be more lucrative due to forecast La Nina weather patterns. Cavendish Lloyd has begun contracting farmers. 

    “Growers should have enough arable land for crop rotations, preferably sand to sandy loam soils with priority given to those with a good source of water and can irrigate,” said Mukadzambo. “A risk assessment will be done to check on whether the grower has any outstanding loans from their previous tobacco seasons.”

    Shisha production increased 270 percent from 110 hectares during the 2022/2023 season to 407 hectares in the 2023/2024 season. Production is expected to increase to 500 hectares in the 2024/2025 season. 

  • Gaining Momentum

    Gaining Momentum

    Photos courtesy of Cavandish Llloyd

    Cavendish Lloyd is eager to expand shisha tobacco production in Zimbabwe and elsewhere.

    By George Gay

    When I corresponded in 2022 with the president of Cavendish Lloyd, Koen Monkau, he was bullish about the market for shisha-style, low-nicotine flue-cured tobacco (LNFCT), the production of which his company was trialing in Zimbabwe. And, earlier this year, he was still bullish. The major manufacturers of shisha might have experienced a drop in sales recently, mainly due to vaping, he said, but a lot of new players had entered the market in the past few years, and shisha consumption was still growing worldwide. Five years ago, for instance, there were no shisha bars in Harare, but now there are plenty of establishments that offer shisha. “This is a worldwide trend,” he added.

    While this sounds like good news for Cavendish Lloyd, it seems to also be good news for Zimbabwe. As part of an email exchange in May, Monkau told me it was important for Zimbabwe’s tobacco industry that it diversified the portfolio of tobacco it offered buyers and, ultimately, manufacturers. “An industry is not sustainable in the long run if half its crop is sold to one customer, as is the case now,” he said. “LNFCT—and also other tobacco varieties—can assist in diversifying the industry so that it is able to stand the test of time.”

    Although Cavendish Lloyd is the only company currently producing LNFCT in Zimbabwe, it is certainly the case that the country’s tobacco industry, at least in the guise of the Kutsaga Tobacco Research Board (TRB), seems aware of the desirability of diversification. Monkau said his company had enjoyed a good cooperative relationship with the TRB, which had this season, 2023–2024, grown 7 ha for it on a commercial basis. At the same time, the TRB was continuing to experiment with alternative growing methods and different shisha tobacco seeds.   

    This season, Cavendish Lloyd is hoping that its Zimbabwe crop will reach 600,000 kg, and Monkau is looking for investors to help him expand LNFCT production into other countries, including Malawi, South Africa, Tanzania and Zambia. His company, he said, was now looking to hold talks with the tobacco research institutes of these countries, following initial approaches that had been made by the chief executive officer of the TRB, Frank Magama. In fact, Tanzania had already expressed serious interest in growing this crop, and representatives of the country’s Tobacco Research Institute had attended this year’s sales, which were ongoing at the time this story was written.

    Many Zimbabwean farmers are growing it for the first time this season.

    Challenges

    It would be wrong, however, to give the impression that everything has been going without a hitch. Monkau readily admits that his company was hit by financial and other constraints during the 2022–2023 season and that its crop of 150,000 kg was well below what had been initially targeted. And while the 600,000 kg crop expected this season would represent a major increase, it would have been even bigger, perhaps 1 million kg, but for the El Nino weather effect.

    But then El Nino affected all tobacco (and other) crops in Zimbabwe (and elsewhere, and the resulting drought was eventually declared a national disaster. The unhelpful weather conditions did not come out of the blue, however, and, in mitigation, Cavendish Lloyd was able to focus on growing an irrigated crop from the start. At the same time, Monkau said, the dryland crop had had to be scaled back to ensure that growers did not plant crops that they would not have been able to sell.

    Unfortunately, the current situation implies that things could reverse next season and create problems for those who use irrigation for growing tobacco because there has not been enough rain to fill dams and reservoirs.

    Despite these setbacks, it is not proving difficult to attract farmers to LNFCT. Cavendish Lloyd started out on this project three seasons ago with just one grower, who is still on board, but he has been joined by about 40 others, ranging from commercial to small-scale farmers. Monkau said that LNFCT was relatively easy to grow and provided good returns when cultivated well, so farmers had been lining up to produce this variety.

    LNFCT is closer grown than standard flue-cured tobacco; it requires the application of less fertilizer; it is not topped; it provides for faster harvesting because more leaves are reaped with each pass; and it requires less energy during curing. All this adds up to efficiency savings and better returns, not to mention environmental gains.

    Nevertheless, the switch from growing a regular flue-cured crop to LNFCT requires some adjustments on the part of the grower, who is presented with logistical challenges if he grows LNFCT alongside regular flue-cured. For instance, because LNFCT cures faster than regular flue-cured, growers need good barn management skills when scheduling curing. In fact, Monkau believes it is preferable for growers to concentrate on either LNFCT or regular flue-cured.

    To help growers further, Cavendish Lloyd is currently looking at employing more sophisticated ways of crop management than are now used. “By using satellite imaging to monitor crops, we can deploy our agronomy team more efficiently to areas that need immediate and special attention rather than have them do their weekly rounds of farmers,” he said. “It is a relatively cheap way of potentially increasing crop yields dramatically, and it is quite amazing what kind of information can be gathered on a day-to-day basis.”

    Looking to the future, I asked if African-grown LNFCT might be used for purposes beyond shisha manufacture, to which Monkau replied that his company had already had inquiries from companies operating in the cigarette and RYO markets that were interested in obtaining a bright, low-nicotine-style tobacco that fitted their established blends. In addition, a recent sale of 10,000 kg of LNFCT to a flavor extraction plant in Zimbabwe had shown that there were other outlets for this type as well.

    In finding and establishing these other outlets, it probably helps that as well as being involved in LNFCT production, Cavendish Lloyd has contacts made through some of its other operations, which include the marketing and distribution of cigarettes, and the trade in tobacco, cut rag and tobacco production materials, such as packaging. And since 2023, cigarette manufacturing can be added to that list since the company last year established a manufacturing plant in Lusaka, Zambia.

    This season, Cavendish Lloyd is hoping that its Zimbabwe shisha tobacco crop will reach 600,000 kg.

    Limits to Production

    Looking away from the demand side and toward the supply side of the LNFCT business, I also asked what limited the amount of this type that could be grown. “Limits are mainly defined by how much capital we can raise to fund the growers,” Monkau said. “I believe there is room to expand production to 5 million kg in Africa on a sustainable basis,” he added before providing an interesting comparison, “which would be comparable with the crop size of Germany.”

    This comparison chimes with a point Monkau had made to me in response to an earlier question about whether LNFCT could now be seen as an established commercial crop in Zimbabwe. No, it was not, he replied. Many farmers this season were growing it for the first time, so it would be an experiment to see if it worked for them. Only one farmer was growing it for the third time, and for several, it was their second season. Even with the volume of all Zimbabwe’s flue-cured crops expected to total less than 250 million kg this year because of El Nino, LNFCT would account for only 0.2 percent of the total.

    That, for sure, seems to be only a modest amount of LNFCT, but I was interested to know if it had been a smooth ride getting to that point. There was no such thing as a smooth ride in Zimbabwe, Monkau told me. The financial/economic situation in the country always kept you on your toes. For instance, on Cavendish Lloyd’s first sales day of 2024, April 5, the government had abolished the Zimbabwe dollar and introduced a new currency, the ZiG, which put the whole financial system on hold for a few days, and the company was still dealing with the fallout from that. Such changes did not make doing business easier, but, apart from that, things had gone quite well. There was a lot of interest and support from the government to make the LNFCT business successful, and the company’s efforts were the subject of regular local press reports.

    Of course, the real test of how things are going and will go in the future concerns whether growers are content with the prices they are receiving, and, in the short term, the answer is probably that they are. Nevertheless, Monkau made the point that pricing was something of a thorny issue in respect of LNFCT. His company was required to follow the pricing arrangements specified by the Tobacco Industry and Marketing Board (TIMB), arrangements that could lead to anomalies since LNFCT fell outside the regular classifications of the TIMB. It wasn’t too much of an issue for the tobacco that met shisha standards, but, in the case of lower grades that were unsuitable for shisha, the company was obliged to pay regular market prices for tobacco of substandard quality.

    But at least the next season, 2024–2025, should see farmers keen to grow LNFCT—in fact, any tobacco type or variety. “Overall, prices for all tobacco have been good this year, so I don’t see many farmers complaining,” said Monkau. “I expect current prices will push more farmers back into tobacco growing until we see more balance between supply and demand.”

  • Zimbabwean Shisha Crop Selling Rapidly

    Zimbabwean Shisha Crop Selling Rapidly

    Photo: Cavendish Lloyd

    Growers of shisha tobacco in Zimbabwe sold more than a third of their crop within four days, reports The Herald, citing figures from the Tobacco Industry and Marketing Board (TIMB).

    The farmers pocketed $660,000, earning an average price of $3.62 per kilogram. Out of 2,385 bales presented, 162 bales, or 6.79 percent, were rejected by buyers. The current average price is 15 percent higher than the 2023 season average.

    Nonetheless, the figures make shisha tobacco less profitable for growers than flue-cured tobacco, according to Zimbabwe Tobacco Growers Association Chairman George Seremwe, although he acknowledges that producing shisha leaf is less capital intensive.

    While shisha is a type of flue-cured tobacco, it is derived from imported seeds and produced using different agronomic practices. To obtain the desired low nicotine levels, the tobacco fields are planted much more densely than is typical with cigarette tobaccos, ensuring fierce competition among the plants for nutrients.

    Cavendish Lloyd is the only shisha leaf merchant registered and licensed with the TIMB. Tobacco Reporter profiled the company in its May 2022 print edition (see “Great Expectations”).

  • Zimbabwean Shisha Production Set to Triple

    Zimbabwean Shisha Production Set to Triple

    Photo: Cavendish Lloyd

    Zimbabwe is poised to produce more than 800 million kg of shisha tobacco this season, reports The Herald, citing statistics from the Tobacco Industry and Marketing Board.

    According to the regulator, tobacco growers have planted 407 hectares of the crop this year, marking a 270 percent increase over last year’s hectarage.

    Cavendish Lloyd, the only registered shisha tobacco contractor in Zimbabwe, expects better quality and yields this year as growers had gained experience and put into practice last year’s recommendations from buyers.

    A company representative said he anticipated yields of between 2,000 kg and 2,300 kg per hectare.

    Derived from imported seed varieties, the shisha flue-cured tobacco requires different agronomic practices than Zimbabwe’s traditional flue-cured crop.

    The shisha tobacco is characterized by low nicotine levels (below 1 percent) and high sugar levels (above 25 percent). To achieve the lower nicotine levels, farmers grow 3,000 plants per hectare—double the number that is typical for Zimbabwe’s traditional flue-cured crop. The density ensures the plant competes more fiercely for nutrients, which in turn reduces nicotine levels.

    In its inaugural year of commercial production (2023), shisha tobacco farmers earned an average of $3.15 per kilogram.

    Tobacco Reporter profiled Cavendish Lloyd’s Zimbabwean shisha operations in its May 2022 print edition (see “Great Expectations”).

  • Cavendish Plans More Shisha Auctions

    Cavendish Plans More Shisha Auctions

    Koen Monkau (left) | Image: Cavendish Lloyd

    Cavendish Lloyd Zimbabwe (CLZ) plans to hold two more shisha auction sales, according to NewsDay.  

    CLZ is the first company to hold an auction sale of shisha tobacco.  

    “This tobacco has extremely low nicotine,” said Koen Monkau, CEO and founder of Cavendish. “So our target with the farmers is to grow a maximum nicotine crop of 1 percent while the traditional crop that you see is traditionally anywhere between 2 percent and 3 percent with sugars ranging from, let’s say, 14 percent to 20 percent. This is less than 1 percent nicotine and up to 30 percent sugar.” 

    “We are going to do three or four (auction sales) in total, and this is number two,” he added.

    Cavendish sold between 60 bales and 80 bales on the first day at auction, each bale weighing between 90 kg and 100 kg. Sales increased to 300 bales on the second auction day.

    The company is working with about 13 farmers who supply the crop.  

    “The cost of growing is about half that of the traditional crop. If you look at a commercial farmer in Zimbabwe, the cost of growing per hectare of the traditional tobacco is anything between US$12,000 and $13,000, and this (shisha) is about $6,000 to $7,000, so it is about half the cost of growing. However, the yield per hectare is slightly less,” Monkau said.

    “So, when you look at the return on investment for the farmer, it’s definitely much better than the traditional crop.”

    Cavendish is targeting the European and Arab markets with the final product. “The original source of this style of tobacco is Europe, but from there, it’s sold worldwide. So we are basically competing with countries such as France, Poland and Germany. These are the major producers of this style of tobacco in Europe. And we see that there is stabilization or a slight decline in what they are growing for whatever reasons, so that means there is an opening for us to enter that market as well,” Monkau said.

    “For the last two seasons, there has been a shortage of this style of tobacco. Traditionally, most of this tobacco is being used in the Middle East because that is where most shisha is coming from. But what we see now, even in Africa or Zimbabwe, recently, a small manufacturer started to make a small product that is going into the water pipe.”

  • Excitement at First Shisha Tobacco Sales

    Excitement at First Shisha Tobacco Sales

    Photo: Cavendish Lloyd

    Sales of shisha tobacco, which opened for the first time at the tobacco sales floor in Harare on April 21, were met with excitement by farmers and buyers, reports The Herald.

    Shisha tobacco is proving to be popular in Zimbabwe, and the Tobacco Industry and Marketing Board (TIMB) has licensed one company, Cavendish Lloyd Tobacco, to support shisha tobacco production in the country.

    The first bale of shisha tobacco sold for $5, and the highest price was $5.30.

    “Today, I delivered 15 bales,” said Moses Machine, a Mutorashanga farmer who expects to deliver 400 bales to the sales floors. “There are several advantages associated with growing this type of crop. Plant population will double the Virginia tobacco. Shisha uses less fertilizer. Since it is the first year, we are not sure where the viability is, but with time, we are going to have a proper analysis. There is use of less labor and fertilizers. In terms of costs of production, there is a difference compared to the Virginia one. There are plenty of good points, but, yes, we may encounter challenges since it is the beginning..

    “I recommend farmers to grow this type of tobacco; no curing using firewood, hence it is cheap to cure. Farmers need to maximize production; air is the major source of the energy. Shisha tobacco production is a welcome development.”

    “The tobacco needs very special attention because the plant or the leaf is very thin, so if you don’t carefully handle it, the leaf itself breaks,” said Jayson Scott, a Marondera farmer. “I have delivered 15 bales, and if everything goes well, l will increase hectarage.”

    TIMB Sales Supervisor Pelagia Marumahoko said the regulator is expecting about 100 hectares for shisha production this season, and markets are readily available in Africa.

    “We have licensed Cavendish Lloyd Tobacco to contract growers growing shisha at the present moment. It doesn’t only contract our farmers, but it also processes this tobacco locally. So far, we have 12 farmers who grow shisha tobacco throughout all the tobacco growing regions,” said Marumahoko.

    Chemical applications for pest and insect control and growth period are the same as other tobacco cultivars such as Virginia tobacco. The crop is reaped when the leaves have completely lost all the nitrogen and have fully ripened. It is cured using the same flue-curing barns, temperature and humidity regimes for the Virginia flue-cured tobacco, and it takes four days to five days to complete curing.

    The cured leaf has to have low nicotine content to protect the smoker from inhaling huge amounts of nicotine since shisha tobacco is about constant smoke inhalation in huge quantities.

  • Great Expectations

    Great Expectations

    Photos: Cavendish Lloyd

    Cavendish Lloyd has started growing low-nicotine flue-cured tobacco in Zimbabwe for shisha.

    By George Gay

    Although it’s unfashionable to say so, I believe there is something most appealing about some aspects of tobacco and the tobacco business, not least because they are naturally part of the Slow Movement. Indeed, they were part of that movement long before it came into existence in the mid-1980s with the realization that there was something to be gained in taking the time to savor certain things—and something being lost in doing things too quickly.

    For instance, though many welcome efficiencies have been introduced to the leaf tobacco business over the years, it always had about it, and still has, a comfortingly unhurried air. I mean, there is, after all, no point in a farmer, at the start of the growing season, standing over her seedlings and shouting, “ready, steady, grow!” And who in their right mind would want to walk quickly through a tobacco warehouse when he could dawdle and savor the aroma?

    Of course, not all aspects of the tobacco business are slow, nor should they be. There is a lot to be said for introducing the sorts of machinery updates and general processing efficiencies and manufacturing efficiencies covered in another story in this issue (see “The Virtuous Loop,” page 36). But, at the same time, there are other aspects of the business that have contraventions of the tenets of the Slow Movement that are to its detriment. I find it sad, for instance, to see smokers racing through their cigarettes as they stand in the cold outside pubs and offices.

    Low-nicotine Virginia flue-cured tobacco has the propensity to absorb the high levels of molasses and flavors that Shisha manufacturers require.

    Unseen Advantage

    Luckily, however, there is a type of smoking that still lends itself to savoring the moment, which comprises mainly the enjoyment of products such as fine cigars, pipes and shisha. Shisha smoking, especially, tends to be part of a relaxed social occasion, and perhaps that is why its appeal is increasing at a time when that of other combustible tobacco products is not.

    And that increase in appeal is occurring, I suspect, without too many shisha smokers realizing there is an unseen advantage in their choice of product, the tobacco component of which could have been grown in a more environmentally friendly way than that of many other tobaccos. Indeed, I, too, didn’t know of this potential environmental advantage until I corresponded recently on the subject of low-nicotine Virginia flue-cured tobacco (LNFCT) with Koen Monkau, the president of Cavendish Lloyd, and Frank Magama, the head of the Plant Breeding Division of the Tobacco Research Board’s (TRB) Kutsaga Research Station in Harare, Zimbabwe.

    Monkau told me his company was experimenting in Zimbabwe with growing LNFCT for use in shisha products, and I assumed the aim of using such tobacco was to try to wean people off smoking as is being attempted in the U.S. in the case of cigarettes. But Monkau explained that, in general, shisha manufacturers required LNFCT (less than 1 percent nicotine) mainly because of its physical characteristics. This style of leaf was pale, white-yellow and very thin, he said, and it had the propensity to absorb the high levels of molasses and flavors that needed to be added to it.

    But this style of leaf also has a number of advantages when it comes to the environment and the cost of producing it, partly because it is closer grown than is standard flue-cured tobacco and partly because of a major reduction in the need for chemical applications. Magama told me it was expected that LNFCT would have lower costs of production with significant savings being made from reductions in the use of fertilizer and the cutting out altogether of systemic and contact suckercide applications. Labor savings would be made because topping would not be required, something that normally involved making several rounds of a crop. And energy and time savings would be made on curing the resultant thinner and smaller leaves.

    At the time of this writing, Cavendish Lloyd was in the process of grading its first trial crop of LNFCT.

    Growing Trials

    Cavendish Lloyd was established in 2011 by Monkau, who has been involved in tobacco for more than 25 years, and his wife, Jiayu Wang, who is vice president of the company. The company’s largest operation in respect of staff numbers is to be found in Zimbabwe, but it operates in the Far East, the Middle East and Europe as well as in other parts of Africa. Overall, it has about 100 employees. It is active throughout the tobacco chain, from the growing of tobacco to the marketing and distribution of cigarettes, though, currently, it does not directly operate any leaf processing or tobacco manufacturing facilities—or, I should point out, offer Cavendish tobacco. It is the exclusive distributor of KT&G products in Zimbabwe.

    Given the company’s close association with Zimbabwe, and the country’s favorable climatic and soil conditions, it is not surprising that this is where Monkau is currently conducting, in conjunction with Magama’s team, LNFCT growing trials and where he intends to expand into larger scale production during the next season, which will run from later this year into next year. And it is not surprising, either, that Magama shares this enthusiasm for Zimbabwe. He told me in an email exchange that he believed there was a combination of factors that made Zimbabwe a suitable country for growing LNFCT, including its resilient grower base, the presence of supportive merchants, a long tradition of growing the crop, and soils that were inherently low in nitrogen, which allowed growers to have good control of plant nutrition when producing LNFCT.

    Asked whether LNFCT varieties were more or less difficult to grow than traditional varieties, Magama said that both required the same attention to detail and good management, though, in the case of LNFCT, some key agronomic practices had to be modified, owing, for example, to the previously mentioned need for less fertilizer and the absence of topping. He added that there was so far no clear evidence about whether it was better to grow LNFCT in the dry lands or as irrigated crops, but he said it was important to note that excessive irrigation or precipitation limited growth and nicotine accumulation through leaching of nitrogen while excessively dry conditions resulted in high nicotine accumulation. Much of the year-to-year variation in nicotine content in a variety was due to differences in rainfall, with everything else being equal.

    At the time of writing, Cavendish Lloyd was in the process of grading its first trial crop of LNFCT, which was grown during the 2021–2022 season by a farmer operating near Marondera, Mashonaland East, and with the help of the Kutsaga team. But it has ambitions to quickly increase its production of LNFCT in Zimbabwe, and it aims, eventually, to become a major player in LNFCT by expanding production into Zambia, Malawi and South Africa.

    Koen Monkau (left) created Cavendish Lloyd in 2011.

    Exponential Growth

    Monkau believes that central and southern Africa can provide significant volumes of LNFCT at competitive prices. And, importantly, having done his research, he believes there is a ready market for such tobaccos. “Within the tobacco market at large, there are some segments that are in decline or stable and other segments that are growing fast,” he told me in an email exchange. “The shisha market is definitely in the last category, with even exponential growth expected in the next few years.”

    Given such opportunities come to fruition, it seems likely that other players will be attracted to growing LNFCT in Zimbabwe, a fact Monkau hinted at when he made the point that establishing an LNFCT production industry in Zimbabwe would be an important step in helping to expand and diversify the country’s tobacco client portfolio.

    Currently, no other companies are growing low-nicotine varieties in Zimbabwe or taking part in production trials. However, it seems that interest is growing. Magama told me the TRB had been involved with low-nicotine trials for the past five years, working with many merchants with different objectives and end-use applications. And the board had been selected, he said, to be part of a three-year global study on low-nicotine tobacco being coordinated by a taskforce of the Cooperation Centre for Scientific Research Relative to Tobacco.

    The plant breeding division of the TRB plays a vital role in low-nicotine trials, conducting research and making available where appropriate the results of that research. The division also makes recommendations when called upon to do so by the Tobacco Industry and Marketing Board (TIMB) and other stakeholders. Again, such cooperation is vital because the TIMB is responsible for authorizing the growing in Zimbabwe of any tobacco variety, and it is the TRB that carries out value for cultivation and use studies, and, on the basis of those studies, recommends or not the variety in question.

    Furthermore, two other government departments, the Seed Services Institute and the Plant Quarantine Services Institute, are involved in ensuring only suitable varieties are grown by processing seed permits and ensuring all phytosanitary issues from the country of origin are addressed before seed importation is made.

    It might seem from the above that obtaining permission for experimenting with new varieties would be complex, but, for instance, authorization for the seed used for Cavendish Lloyd’s trials was processed for the company by the TRB.

    The seed in question was obtained from a company based in Europe that has long cooperated with Zimbabwe and is a stable source of supply. But, in any case, Magama said that, depending on the results of the trial, it was possible seed could be sourced elsewhere if it were necessary to address limitations the original seed might have. Further, local breeding efforts could be activated should there be a business case for this nascent tobacco type, he added.

    Finally, without wishing to interrupt the Slow Movement that inevitably controls the scheduling of research and trials, I need to point out that Monkau intends to introduce some allegro con brio into his enterprise. “We plan to grow 1 million kg green from season 2022–2023,” he said. “This might seem ambitious, but we have spent a lot of time on research and are confident we can make it.”