Alliance One International (AOI) has announced its intention to enter the Ugandan tobacco leaf market once all relevant governmental approvals and licenses, including registration of its new Ugandan subsidiary, Alliance One Tobacco Uganda (AOU), are complete.
AOU’s core business plans to include providing agronomy services to tobacco growers through an integrated production system that supports sustainable compliant tobacco leaf production. To execute on its plan, AOU expects to employ agronomy and support staff in Uganda, drawing from local talent to develop a dedicated country team. To meet first-year production goals, AOU intends to register and sponsor farmers that produce both flue-cured and burley tobaccos for the upcoming 2015 crop.
“Once complete, the addition of Uganda to our existing African footprint further strengthens our regional position as a leading supplier to both new and existing customers,” says Pieter Sikkel, AOI’s president and chief executive officer.
“Ugandan tobaccos have a good range of quality flavor and semi flavor styles that complement tobaccos from our other supply origins. We are excited about the heightened prospects for Ugandan tobacco on the world market.”
The Pan African Tobacco Group recently broke ground for a $20 million tobacco processing factory in Arua, Uganda. The new facility, which includes a 30,000 square meter warehouse, will have a production capacity of 10 tons per hour.
“As part of this expansion, PTG will manufacture high quality products, while creating hundreds of well-paying jobs in sub-Saharan Africa,” said Tribert Rujugiro Ayabatwa, the founder of PTG. “I am delighted to announce that our projects are in progress.”
David Wakikona, Uganda’s trade minister, laid the factory’s first stone during a ceremony on May 20. He described the site as a source of jobs and timely investment, while praising the commitment of PTG to improve tobacco production and the quality of exports to other regions.
“The opening of a plant of this size in a rural area is a defining moment in the history of Uganda,” said Wakikona. “It is all the more important given the jobs that will be created.”
Upon completion, five months from now, the factory will employ 200 permanent and 2,000 seasonal workers. It will also contract with 1,500 drivers to transport its products to destinations throughout the region. The number of Arua leaf growers supplying PTG will increase to 13,000.
PTG already has a strong presence in the region, where it invests $18 million a year in tobacco cultivation.
A team of 20 WHO researchers will conduct a study in Uganda to determine the country’s earnings from the tobacco industry and costs incurred from treating people with tobacco-related illnesses, reports Monitor.
According to the Uganda Demographic Health Survey 2011, about 15 percent of males and 3 percent of females aged 15-49 use tobacco products. Statistics show that tobacco-related illnesses claim about 13,500 lives in Uganda annually. The government raises UGX80 billion ($30.9 million) per year in tax revenue from tobacco companies.