Alliance One and China Tobacco in Brazilian JV

Alliance One International and China Tobacco have formed a joint-venture in Brazil to facilitate production for the growing Chinese market for higher quality cigarettes, the companies announced. Alliance One Brasil Exportadora de Tabacos (AOB) will own 49 per cent of the joint-venture and transfer production contracts with about 6,000 Brazilian growers to China Tabaco Internacional do Brasil (CTIB), the companies said in a statement on 9 Jan. CTIB will own 51 per cent of the venture. Administrative and buying functions will be housed in a portion of Alliance One's recently expanded facilities in Venancio Aires. Tobacco processing will occur in AOB's facility, the companies said. "The main objective of the joint venture is to promote the production of quality tobacco to supply the Chinese market. China's cigarette market is the biggest and fastest growing market in the world and this agreement reinforces Brazil as one of the main suppliers of this market,” said Alexandre Strohschoen, Alliance One regional director for South America. Liang Deqing, president of CTIB, said, "the high quality of the Brazilian tobacco combined with Brazil's capacity to grow volumes, has meant that Brazilian tobacco is a highly desirable component in the better quality Chinese cigarettes. For a long time we have been studying the Brazilian market with the intention to start buying directly from the tobacco farmers.” (pi) 

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