Tobacco Co-Op to Buy N.C. Cigarette Plant

Source from:  WINSTON-SALEM, N.C. (AP) 06/10/2004

A five-state cooperative of tobacco growers says it has a $25.8 million deal to buy a plant where farmers will be able to process leaf and make their own cigarettes. The plant, opened in Roxboro by Vector Tobacco Inc. in 2001 to produce low-nicotine cigarettes, closed last year when parent Liggett Vector Brands Inc. consolidated production in Mebane. Farmers see the move as a hedge against the increased demand for foreign tobacco by cigarette manufacturers. "We can move greater quantities of farmers' tobacco that way," said Arnold Hamm, assistant general manager of the Flue-Cured Tobacco Cooperative Stabilization Corp. In a filing with the federal Securities and Exchange Commission, Liggett said it plans to close the sale by July 15. The states involved are Florida, Georgia, South Carolina, North Carolina and Virginia. Hamm said the key to the deal is not the plant's cigarette manufacturing capacity, but its ability to process up to 50 million pounds of leaf a year. Growers face an uncertain future, as the major manufacturers' demand for domestic leaf declines and the federal government considers a buyout of the long-standing tobacco quota and price support system. Hamm said the cooperative will pay for the plant out of more than $240 million in reserves. Ron Bernstein, the president and chief executive of Liggett Vector Brands, said Monday that Liggett and the cooperative hope to close on the deal soon. "I certainly applaud the initiative of Flue-Cured Stabilization to pursue initiatives to give their farmers an expanded market for their products," he said. Enditem