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Tanzania : $61m invested by Tanzanian tobacco firm
Publish Date : 23-Sep-2014
The Alliance One Tobacco Tanzania Limited (AOTTL) has spent Tsh101.81 billion (about $61 million) to purchase up 28 million kilogrammes of flue cured tobacco this season. The AOTTL’s Managing Director, Mark Mason stated that their firm buys between 35 and 40 million kgs of tobacco annually from over 35,000 farmers organized in 182 primary societies. Mason said, AOTTL which presently has market share in the Tanzanian tobacco industry of 40%, wants to buy 35 million kgs of flue cured Virginia tobacco and 500,000 kgs of dark fire cured tobacco this season.
He said the 28 million kgs reported is the volume they had purchased by the third week of August 2014. He said, “Buying is still continuing and we are optimistic that we will achieve the target”. He said, “I am happy to report that analyzing the current buying trends it is likely that the targets will be met by the end of the buying season in October 2014 and quality has been as expected”. The AOTTL processing factory which is a $50 million investment covers over 5 hectares under one roof. It has the capacity to process 60 million kgs within a 7 month time. He said, “We are able to handle this season’s 35 million kgs of our own farmer’s tobacco as well as supplying services to other tobacco companies within Tanzania with the help of our 300 permanent staff and over 2,000 seasonal employees”.
He said, “Our total processing volumes will reach 50 million kilos this season inclusive of third parties. The efficiency of the production line means we are able to meet our international customers’ processing requirements.” The processing stage for the tobacco started in June 2014, and is planned to go up to December 2014. Purchased tobacco is transported to Alliance One factory in Morogoro for processing and selling to domestic and export customers.
Regard to their relations with farmers, who produce tobacco for its factory, he said the farmers are an important part of the tobacco value chain in the industry. He said, “Accordingly our relationships with our farmers have sustainability at its core. This is to say that to have a successful Tobacco industry; it must be managed in a way which is mutually beneficial to the farmer, the government, as well as Alliance One and our customers”.
Alliance One’s relationship with the farmers is directed by a buying contract signed with Primary Societies. These are Farmers’ Organizations formed to manage their affairs. Through this contract farmers are guaranteed of a market for their tobacco. Aside from purchasing the crop, Alliance One provides technical support to the farmers in form of extension services and afforestation.
