Chronicle Editor
Business Reporter—
PREMIUM Tobacco International, the world’s third largest tobacco merchant has acquired the assets of Tribac, a local tobacco contracting firm for an undisclosed amount.Tribac is owned by a consortium of local businessmen compromising Kenneth Butchart, Victor Brown and Pete Chilvers.
Premium Tobacco, the Dubai headquartered company is said to have offered “a price” for Tribac assets after its financier, Japan Tobacco International, indicated it was unable to continue financing its contract scheme.
Japan Tobacco International and Premium Tobacco International have operations spread across various tobacco growing countries.
“JTI had a leaf purchasing agreement with Tribac and was the main sponsor of its contract farming,” said one source who requested anonymity for professional reasons.
“As a result of poor performance, JTI indicated it was unable to continue financing the scheme and this is how Premium ended up buying Tribac and the transaction has been finalised. A new management team has been set up and the hand-over-take-over process is almost complete.
“Unlike the arrangement with the Japanese, which only funded Tribac’s contract scheme, Premium Tobacco International are coming in as shareholders of the company.”
No official comment could obtained from Tribac yesterday. However, some workers interviewed confirmed the development, saying retrenchment of workers was ongoing.
“Some of the workers have been affected by the transaction and they are going in batches,” said one worker.
The Tobacco Industry and Marketing Board said yesterday it had been informed about the deal but could not give finer details.
Tobacco farming stands out as one of the biggest success stories of empowerment in the Zimbabwe. Prior to the land reform programme, tobacco farming was a preserve of large scale white former commercial farmers with negligible numbers of blacks.
Prior to land reform, about 2 000 large scale commercial farmers produced an average of 200 million kilogrammes, an average of 200 tonnes per farmer. But with the land reform, the number of farmers has increased to about 70 000, with production levels stabilising at about 200 million kg, an average of three tonnes per farmer.
Most of the indigenous farmers are largely sponsored by tobacco merchants with over 80 percent of the crop being funded through various contract farming schemes. Last year, Tribac bought about 10 million kg of tobacco.
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