Issue link: https://read.dmtmag.com/i/699960
54 tobaccoasia / Issue 3, 2016 July / August (Images courtesy of Burley Tobacco Growers Cooperative Association) (Image by Thomas Schmid) Steve Pratt, general manager, Burley Tobacco Growers Cooperative Association, Kentucky, U.S.A. YEAR GRADE UNITS KG NIC/SUGAR BURLEK 2011 MFV 374 67,320 2.57% 2012 BFR 178 35,600 3.90% 2012 S-TFR 65 13,000 3.72% 2012 BUBC 185 33,300 3.00% 2013 S-BF 2,793 530,670 4.48% 2013 S-CF 1,002 190,380 2.72% 2013 S-BTFR 1,312 249,280 3.98% 2014 BA-1 3,945 789,000 4.69% 2014 CA-1 1,614 290,520 3.72% 2014 TA-1 398 79,600 3.92% 2015 BA-1 864 172,800 4.21% 2015 CA-1 1,002 180,360 3.61% 2015 XA-1 189 34,020 2.19% TOTAL INVENTORY 13,921 2,665,850 Kilograms 2013 SCRAP 180 24,480 2013 STEMS 1,722 331,950 2014 FINES 130 19,458 2014 STEMS 1,815 363,000 2015 FINES 39 5,838 2015 STEMS 551 110,200 Prices are quoted FOB Wilmingtion, NC Prices are quoted based on full 40' Container load Prices subject to review BTGCA's tobacco inventory available for sale as per March 2016 Chriselle Zhao, marketing manager, Trust Tobacco, Luang Prabang, Laos Parvomay BT: born from the ashes of a Monopoly At least some of that competition certainly comes from south- eastern Europe in the form of Parvomay BT, today one of Bulgaria's most prominent exporters of quality FCV, oriental, and burley leaf. The company was founded in 1947 as an entity under the former Bulgarian State Tobacco Monopoly, but was privatized in 2004 when that monopoly was broken up (see our story on Bulgaria's tobacco industry in this issue). According to c.e.o. Krasimira Nedeva, the company's current annual out- put of processed broadleaf comprises approximately 65% FCV, 25% burley, and 10% oriental. From the very moment of its privatization, Parvomay BT embarked on a strategy of focusing almost exclusively on ex- ports. "As a matter of fact, Parvomay BT was privatized with the complete awareness that the local market was in collapse and that the only way to survive was to look for global markets," Nedeva says. Companies like Nico Gleoudis Kavex in Greece and Mella Srl. in Italy are among Parvomay's most important customers. While the company primarily exports broadleaf to- bacco, a minor amount of oriental goes to Jordan, where Par- vomay established a subsidiary approximately one year ago and which produces cut rag for the local cigarette industry. Set- ting up the Jordanian outfit was necessary because Parvomay BT isn't licensed in Bulgaria to produce (or trade in) cut rag or cigarettes. "This step will hopefully make us more competitive and will make it easier to us to market Bulgarian tobacco in the Middle East, which we deem strategic for us at this moment," Nedeva explains. International expansion The company additionally maintains a presence in Russia, Ukraine, and various Northern African countries, but prefers to work with smaller clients there. "We like to work with small and mid-sized independent partners, who are looking for a flexible but reliable supplier, which we believe is our strongest point." The company aims to eventually also enter the central and west- ern European markets, as it is convinced that there is demand for Bulgarian tobacco as well. But according to Nedeva, the main obstacle for this expan- sion at the moment is that the multinational tobacco compa- nies look back at a long history and hold strong positions there. "They are able to achieve a very good price/quality ratio, which most of the times is simply impossible for small companies to achieve due to economies of scale. But we are really looking forward to further improve our position in Italy, as we believe the tobacco industries in both Italy and Bulgaria are very similar and there are already strong economic ties between the two na- tions." The main challenge for Parvomay BT in entering Asia is likewise tied to the excellent price/quality ratio of Asia-grown tobacco. "That is especially the case when we're talking about Virginia, which incidentally is also our main product," says Nedeva. But she adds that this doesn't change the fact that Par- vomay BT is actively looking for opportunities to break into this market. "Asia, as we all know, is a huge market, and there is place for everyone. But it's nevertheless a notoriously difficult market to break into, and a market which has its own specific needs and ways. However, we believe that with a strong and reliable partner in Asia, we could establish a mutually very ben- eficial relationship, especially in the field of oriental tobacco. However, we have yet to identify that partner." Continuous upgrading Maturing into one of Bulgaria's foremost leaf supplier hasn't been easy for Parvomay BT after privatization. Dealing with ob- solete and degraded equipment and production facilities was a major stumbling block. But the company was able to compen- sate to a certain extent with skilled and experienced personnel. "We also acquired an old threshing line from Italy, which we then constantly upgraded and improved over the years," said Nedeva. "It is actually almost completely renewed." Only last year, the company also upgraded its separating machines. "We