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Leaf prices down on those of last year

| August 6, 2014

Alliance One International made a net loss of $18.6 million during its first quarter to the end of June, a smaller net loss than was recorded during the first quarter to the end of June 2013, $36.9 million.

Gross profit increased by 23.2 percent to $35.1 million and gross profit as a percentage of sales climbed from 7.4 percent to 14.1 percent.

In reporting the results, president and CEO, Pieter Sikkel, said that the buying of green tobacco had been delayed by challenging weather in some regions and by global markets that had gone into oversupply.

“Market prices paid for green tobacco from suppliers have been generally lower than last year,” he said. “This is consistent with conditions highlighted at fiscal year-end 2014.

“The slow start reduced first quarter sales versus last fiscal year and is expected to have the same impact through the second quarter, but should normalize and result in similar full year revenue.”

During the quarter to the end of June, volume sales, at 47.7 million kg, were down by 37.5 percent on those of the quarter that ended on June 30, 2013.

At the same time, revenues declined by 35.1 percent to $249.0 million.

“As anticipated, gross profit increased 23.2 percent to $35.1 million and gross profit as a percentage of sales improved to 14.1 percent this year from 7.4 percent last year, primarily driven by improved operating performance,” said Sikkel.

“We expect improvement in gross profit and other profitability measurements to continue throughout the year…”

Growers threaten boycott over leaf prices

| August 6, 2014

The Kisan Board of Khyber-Pakhtunkhwa, Pakistan, has rejected a price of Rs150 per kg for leaf tobacco and threatened to stop growing the crop if farmers are not paid Rs200 per kg, according to a story in The Express Tribune.

Khyber-Pakhtunkhwa grows the bulk of Pakistan’s tobacco crop. It produced 83 million kg in 2012-13, of which 80 percent was grown in the Swabi district.

The Kisan Board’s provincial president, Rizwanullah, was quoted as saying that the price of Rs150 per kg was not enough because it did not allow farmers to break even.

Those who attended a Kisan Board meeting in Shergarh on Sunday demanded tobacco companies and the Pakistan Tobacco Board increase the price, saying that they would otherwise boycott production in 2015.

Total makeover for JT menthol cigarette

| August 6, 2014

Japan Tobacco Inc. is redesigning its Pianissimo Precia Dia’s Menthol cigarette; an all-new version of which is due to be rolled out nationwide in Japan from mid-September.

In announcing its plans, JT said that Pianissimo was one of the most popular menthol brands on the market and that the Pianissimo Precia series offered ‘an elegantly designed super slim (5 mm in diameter) menthol cigarette’.

JT is hoping to give Pianissimo Precia Dia’s Menthol an even broader appeal than it currently has, and, to that end, it is giving the product a complete makeover: changing the flavor, aroma, tar and nicotine delivery levels, and packaging.

‘While Pianissimo will keep its smooth and unassertive traits, it will feature a new flavor, one marked by a menthol sensation that is neither too weak nor too strong, and an aroma that is luxurious but characterized by a graceful restraint,’ said a note posted on JT’s website. ‘The amount of tar will be reduced from 6 mg to 5 mg, and the nicotine from 0.4 mg to 0.3 mg.

‘The new package design will be more elegant, featuring a graceful and calm royal blue background, with a motif of gold accessories underscoring the fact that it is a premium product.

‘In addition, JT aims to enhance the presence of the Precia series by adopting a common design scheme across the Precia Menthol line-up.’

American earns top sustainability award

| August 6, 2014

The American Snuff Company (ASC) has been awarded the Tennessee Department of Environment and Conservation’s (TDEC) highest award for sustainable business practices, the Tennessee Green Star Partnership Three-Star Certification.

ASC, an indirect subsidiary of Reynolds American (RAI), is the first Memphis-based company and the 13th in Tennessee to hold this award.

“ASC-Memphis is very pleased and proud to be recognized by the state of Tennessee Green Star Partnership,” said Mick Spach, president of ASC, in a note posted on RAI’s website. “Our employees have actively implemented responsible conservational programs and are continually striving to improve our environmental performance. Our commitment to environmental sustainability is consistent with our commitment to leading the transformation of the tobacco industry.”

The Tennessee Green Star Partnership is TDEC’s environmental leadership program that seeks to recognize organizations that are committed to sustainable practices and continuous improvement throughout their entire operation.

“We are honored that American Snuff Company has joined the Tennessee Green Star Partnership at the Three-Star Partner level,” said Curtis Hopper, Office of Sustainable Practices with the TDEC. “It is a great accomplishment for a new member to enter the partnership at the highest level, which attests to the quality of American Snuff’s environmental management system.”

ASC Memphis is the second RAI subsidiary to receive state-level recognition for their outstanding sustainability efforts. Earlier this year, Santa Fe Natural Tobacco Company was awarded the highest level of recognition in North Carolina’s Environmental Stewardship Initiative.

ASC is the US’ second-largest manufacturer of smokeless tobacco products. Its leading brands are Grizzly and Kodiak.

Universal declares quarterly dividends

| August 6, 2014

Universal Corporation’s board of directors has declared a quarterly dividend of $0.51 per share on the company’s common shares, payable on November 10 to shareholders of record at the close of business on October 14.

In addition, the board declared a quarterly dividend of $16.875 per share on the company’s Series B 6.75% Convertible Perpetual Preferred Stock (Series B Preferred Stock), payable on September 15 to shareholders of record as of 17.00 hours Eastern Time on September 1.

Multinationals picketed in Russia

| August 5, 2014

A series of pickets against multinational tobacco companies were staged yesterday in a number of Russian cities stretching from the south to the northwest of the country, according to an ITAR-TASS story.

The picketers seemed to have had a number of grievances, not all of which could be laid at the door of the multinationals. Some were protesting about multinational companies controlling more than 90 percent of the Russian tobacco market.

But others complained that the Russian budget was missing out on about 500 billion rubles annually because of what they described as low excise duties on tobacco.

And those at Saratov, on the Volga, were demanding that the BAT-STF tobacco factory, owned by British American Tobacco, be relocated beyond the city boundaries.

Roman Plyuta, head of the Orthodox Union, which set up a picket in front of the Philip Morris Kuban factory in the southern city of Krasnodar, was said to have told ITAR-TASS that transnational corporations made “cigarettes of such quality that they would never be allowed in the United States or other Western countries.”

The smoking of these cigarettes “doubles and even triples [health] risks,” he added.

Plyuta said he believed that Western manufacturers added special ingredients to their cigarettes so that smokers became strongly addicted to them, even after a short period of smoking.

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