Kenya: Alliance One Kenya Announces Local Operations Review

Source from:  Capital FM 06/04/2015

Nairobi - Global raw tobacco merchant, Alliance One International Inc has announced the commencement of a strategic process to scale down its operations in Kenya.

Alliance One Tobacco (Kenya) Limited is a subsidiary of Alliance One International, with its corporate head office in Morrisville, North Carolina, USA.

Alliance One International's first purchases of Kenyan tobacco were in 1983 and the Company has had a legal presence in the country since 1990.

Its core operations involve sponsoring farmers to produce tobacco mainly in Migori County, processing and exporting to the international market.

Alliance One International, has attributed the need to scale down its Kenyan operations to the substantial shift in the global supply and demand of Flue-Cured Virginia (FCV) tobacco.

With the prevailing slump in the tobacco market, Alliance One International has now embarked on a strategic process to align and reposition its operations.

In line with this, Alliance One Kenya has announced that the Company will not sponsor tobacco farmers in various parts of the country who have been engaging in contract out grower services.

The Company will also cease its field operations as of 1st July 2015, leading to the downsizing of the positions in the Company and by extension the employees holding those positions.

The Company intends to follow due legal process in undertaking the scaling back.

Alliance One Tobacco Kenya, Managing Director, Francis Chege, said, the Company will maintain its legal presence in Kenya. It will continue to have some minimal presence at its Thika processing base with a limited number of staff to continue marketing its tobacco inventory.

"Alliance One is proud to have been a part of the tobacco industry in Kenya for the past 25 years, but unfortunately customer demand for the Kenyan supply has declined and the Company has been forced to realign its operations to changing market conditions," said Chege.

"Through the implementation of Good Agricultural Practices and our Sustainability programmes, we have assisted our growers to become more efficient, minimize their impact on the environment and increase income for their families. Our growers have not only produced good quality tobacco but have become food secure through our crop diversity programmes," he added.

Alliance One Tobacco Kenya is proud of the substantial investment it has made over the years in its operations in Kenya in sustainable energy initiatives.

Investments included a bagasse briquetting factory in Migori County and a reforestation programme. The Company has also sponsored 459 students from the farming community through secondary school education.

"Our agro-business projects taught our growers over the years not just how to be better farmers, but how to be stronger small business owners. All of this has been achieved through the dedication and hard work of our employees, and we thank them for their contributions to Alliance One," Chege pointed it out. Enditem