PM Brazil Takes Over Alliance One Farmers

Source from:  Tobacco Reporter 06/22/2010

Philip Morris Brazil is taking over from Alliance One contracts with approximately 8,500 tobacco farmers in southern Brazil and some related assets. Philip Morris will also obtain a license to Alliance One's proprietary inventory management software. Under the agreement, Alliance One will process the tobacco grown for Philip Morris by the contracted farmers. Alliance One will continue to supply Brazilian processed tobacco to Philip Morris as required to complement Philip Morris' needs. "Alliance One continues to look for additional innovative initiatives to drive closer alignment with our customers," said Robert E. Harrison, chief executive officer of Alliance One International. "This agreement works towards achieving our stated goal. Benefits include a long-term processing agreement, reduced working capital requirements and better supply chain optimization. It is a win for all stakeholders: farmers, lenders, PM and AOI." Harrison expected the deal to be closed by the end of AOI's second fiscal quarter in time for the next Brazilian crop cycle. Enditem