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Burley air-curing in Danville, USA. Photo Credit: Ares Tobacco Int.
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Company consultant Jaime Aburto (left) and leaf manager Rodolfo Valera discuss the business of the day at Sijara’s InterTabac 2023 booth. Photo credit: Thomas Schmid
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Sijara’s management team (from left to right): Ignacio Rivera, purchasing and logistics manager; Roberto Martínez, plant manager; Jaime Aburto, company consultant; Rodolfo Valera, leaf manager. Photo credit: Sijara
A Turkey-based trader and a Mexican burley supplier show that tobacco remains a truly global business.
“Just because we are headquartered in Istanbul doesn’t mean that we are exclusively trading Turkish tobaccos,” quipped Yiğit Özkurter, purchasing manager of Ares Tütün Ticaret Limited Şirketi (Ares Tobacco). And indeed, the company, founded only in 2020, is active in a multitude of countries through a wide spread of local partnerships. “You could say we feel like a member of a rather larger family,” Özkurter said. Of course, this only goes to show how well-networked modern independent tobacco traders must be nowadays if they want to compete against the bigshots in the business. Yet all the while they strive to maintain that personalized – yes, family-like – touch so many customers have come to value.
As a globe-spanning firm, Ares obtains its merchandise from a wide spectrum of origins, including the United States, Brazil, Argentina, various EU countries, Zimbabwe, Malawi, Azerbaijan, India, Pakistan, Bangladesh, and even China. As such, the company covers all mainstream grower regions… and beyond. “We are also inclined to offer tobacco products from alternative regions that may be lesser known, but which might have a better price-quality ratio seasonally,” pointed out Ares c.e.o., Akın Akdoğan. “We receive updates from our local partners throughout the year, that information pool being the guide for organizing our annual global purchasing strategy.”
Being a trader rather than a full-scale merchant, Ares does not maintain its own contract farming arrangements, but rather purchases its products from its local partners. This of course helps the company to offer a comprehensive spread of tobacco, whereas FCV (at 50% of annual trading volume) and burley (25%) are the two most common types, followed by oriental (10%), and DFC/DAC (5% each). But, ‘what about Turkish tobaccos?’ we just couldn’t resist asking again. “Yes, we are trading Turkish tobaccos, too,” confirmed Özkurter, quickly adding, “However, we also do Greek, Bulgarian, and Macedonian tobaccos as much as we do Turkish. Each and every origin has its own characteristic properties. We act on the customer’s inquiry for their blends.” Strips, pointed out Akın Akdoğan, are the most often ordered processed type, clocking in at about 55% of annual volume. Cut rag (25%) and CRES (10%) rank second and third, respectively, while loose leaf and DIET make up the rest at roughly equal proportions.
Ares’ customer base is concentrated in the EU, CIS, and the Middle East. Lately, however, the company has also extended its reach “to a few countries in Asia,” said Akın Akdoğan, expressing hopes to widen its presence in this dynamic region in the future. The same goes for Africa, where Ares aims to gain a larger footprint. But globally speaking, competition has been “certainly challenging lately,” he admitted. Yet he also saw the company’s dynamism, adaptability, and “the flexibility to quickly adjust to an ever evolving world” as definite advantages to overcome and master any hurdles. “Every single member at Ares Tobacco boasts considerable know-how and vast experience to devise and implement creative ways to serve our customer and suppliers alike.”
Product-wise, it wasn’t just a matter of merely keeping note of harvest sizes and price changes in the various tobacco regions, insisted Yiğit Özkurter. “Instead, we absorb those data as if they were tied to stock market commodities, reading them like graphs,” That approach, he said, enabled the company to anticipate which tobacco grades from which origins are going to have an edge over the others until the next season comes around. “It’s like riding a wave,” he explained. “At the end of the day, it’s always the customers who determine what they need, so we need to be precise in our strategy and always know exactly what we do. That’s how we create customized options for our customers; plans, but also back-up plans ready for execution before the marketing seasons arrives.” Akın Akdoğan, meanwhile, couldn’t agree more. “We are here for the long run. Regardless of what is happening in the tobacco growing markets, we will continue to ensure supply security paired with the best price/quality ratio tobacco along with exceptional, tailor-made customer service.”
Where Ares Tobacco pursues no contract farming on its own, Mexico’s Sijara International Manufacturing does the exact opposite, contracting between 200 and 250 farms every season that altogether plant about 1,000 hectares of tobacco. But while the San Andres valley in Mexico’s Veracruz state may be famous for its rich “negro” leaf that primarily ends up in premium cigars, Sijara’s farmers are located in the states of Nayarit and Chiapas, and these are renowned for their excellent cigarette-grade burley and virginia crops.
Jaime Aburto, a company consultant, confirmed to Tobacco Asia during a recent interview that indeed four main types are produced there: flue-cured and air-cured virginia, as well as air-cured burley and stalk-cut burley. “We process the harvests at our own GLT facility, which presently has a capacity of 2,000 kilograms per hour,” Aburot said, adding that typically 80%-85% of the crops hails from Nayarit, while 15% to 20% comes from Chiapas. He said that Mexican stalk-cut burley in particular could easily hold up to Kentucky, Tennessee, and Malawi burleys.
Sijara’s plant manager Roberto Martinez explained that the crop season for both states starts in October and ends in July the following year. “The market-ready tobacco becomes available from June onward each season.” For the past few years annual yields from the two states have steadily increased (see table). Since demand is rising, Sijara has been running field trials in Campeche state in 2023 and 2024 to assess the possibility to begin growing tobacco there as well. However, a decision has apparently not been made as of yet. Increasing harvest volumes might also become an inevitable necessity in the near future, because Sijara not only trades part of its tobacco but also manufactures a major proportion of it into its proprietary range of cigarette brands as well as those of other brand owners.
According to Martinez, 85% of its customers are located in Mexico, while the other 15% are in the US. Diversification into other markets is an option that Sijara is contemplating but not pursuing vigorously. “In the end, we are open to any markets that are interested in our cigarette brands but also our strips, cut rag, and green leaf tobacco,” he said. That this interest definitely exists was proven to the company at last year’s InterTabac in Germany, which marked the very first time Sijara had attended the world’s largest tobacco exhibition. Martinez’ colleague Jaime Aburto, interviewed by Tobacco Asia at the time, revealed that all stocks Sijara had offered there were sold out completely within only two days. That is of course something many other tobacco merchants can only dream of. So, expanding tobacco production back home could indeed be an excellent idea for the Mexican company.