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SEKE’s processing facility in Xanthi, Greece. Credit SEKE S.A.
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Alexandros Kontos, general manager, SEKE S.A. Credit SEKE S.A.
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Processing lines at SEKE’s Xanthi facility. Credit SEKE S.A.
Alexandros Kontos, general manager of Greece’s largest tobacco merchant, SEKE S.A., tells Tobacco Asia what his company has to offer to international buyers.
Founded in 1947, SEKE S.A. is a so-called societé anonymé, a body that unites tobacco-growing associations from across Greece as its shareholders. This gives SEKE all the positive characteristics of a cooperative company, such us a strong interest in the livelihoods of contracted farmers and sustainability in tobacco cultivation. On the other hand, it also bestows it with the hallmarks of a successful private company, like strong strategic management and a high level of market competitiveness.
Its main office located in Athens, SEKE operates a secondary headquarters and processing facility in the town of Xanthi in eastern Thrace, where much of Greece’s excellent virginia and oriental tobaccos are grown. In addition, the company has established subsidiaries with comprehensive state-of-the-art facilities in Northern Macedonia, Albania, and Bulgaria.
“Thanks to this set-up, we are today not only by far the largest tobacco merchant in Greece but also maintain an extraordinarily strong presence in other Balkan countries, giving us direct access to the very best crops the region can offer,” said SEKE’s general manager, Alexandros Kontos.
Worldwide presence
SEKE exports its broad variety of tobaccos to over 30 countries in Europe, Asia, North America, Latin America, and Africa and for several decades has acted as a reliable supplier to many of the world’s biggest blue-chip cigarette manufacturers. ”We are procuring and trading more than 16,000 tons of tobacco in a typical year,” Kontos pointed out, adding that around 82% of the volume consisted of oriental, while 16% is flue-cured virigina, the remaining 2% being split among other tobacco types, chiefly burley. Since relatively recently, the company has further bolstered its product portfolio with reconstituted tobacco sheet.
Contract farming for top-grade quality
SEKE’s merchandise is exclusively obtained through contract farming in all of its four operating countries. “In 2020, we contracted about 12.000 farmers, most of whom have forged a long relationship with us that often reaches back a decade or even longer, explained Kontos. Contract farming, he said, brings the distinct advantage that all crops are completely traceable - a “must” in the European Union, of which Greece is a member state - and it also ensures that quality requirements and specifications are met without fail.
“As part of their annual contract renewal farmers are required to attend training sessions at the start of the season, familiarizing them with the latest production protocols and practices stipulated by SEKE,” elaborated Kontos. “Subsequently, we dispatch teams of agronomists throughout the season who guide and monitor farmers so they stay committed to our strict quality and compliance standards.”
The only Balkan supplier of PRC virginia
Kontos claimed that SEKE currently also was the only company in the Balkans producing and offering organic PRC (pesticide residue clean) virginia tobaccos of high quality. Over the past few years, the merchant has additionally also ramped up production of shisha-style FCV due to increasing demand. “We can provide this high-quality, bright lemon-colored, low-nicotine and high-sugar product with its superior molasses absorption ability at competitive prices,” Kontos asserted, adding that the firm’s ability to supply unique and targeted produce at reasonable cost was among its pivotal advantages.
Kudos to the farmers
But, Kontos also readily gave kudos to the small army of contract farmers, without whom SEKE’s varied portfolio could not have attained its reputation for superior quality. For instance, Kontos commended Greek farmers for their uncompromising discipline in complying with all of the firm’s strict production protocols. He added that “integrated crop management is applied for all Greek tobaccos, while traceability is practiced at an extraordinarily high standard, with fields being meticulously mapped via a satellite system, every plot receiving a unique identification number.” It was, therefore, not without reason that Greek tobaccos enjoyed the trust and support of multinational manufacturers and have become a market benchmark.
Tackling the competition
However, Kontos admitted that Greece was not without competition in the oriental tobacco sector. “Northern Macedonia is a very ‘tobacco-friendly’ country, producing good quality at prices that are actually lower than those of Greek oriental,” he said. This also was the main driving factor behind SEKE establishing a subsidiary there in 2016. “It helped shore up our position and today we are in fact Northern Macedonia’s third-largest tobacco merchant, contracting more than 4,000 farmers and purchasing around 3,800 tons of oriental each season.”
Then there is of course Turkey, presently the world’s largest producer of oriental. Though Kontos said that the Turkish varietals have “a different profile to our Greek tobaccos,” the devaluation of the Turkish lira has “created market pressure for Greek oriental, making it more expensive than the Turkish produce.” Meanwhile, Kontos explained, Bulgaria’s output of oriental had been steadily decreasing in volume though rising in price. SEKE nevertheless maintained a dynamic presence in the country, being the biggest buyer of North Bulgarian and the third largest of Krumovgrad oriental. “I can state with confidence that SEKE is a very reliable supplier of Bulgarian oriental varieties,” Kontos said.
Staying committed despite global changes
While supplier countries are engaging in heated competition, the tobacco industry is coming under growing pressure internationally both from anti-tobacco lobbying and more restrictive government policies. “There are a lot of changes underway on the world tobacco map,” Kontos observed. Though that doesn’t deter SEKE. “We are one of the few major merchant companies left that believe in tobacco and we will continue investing in it,” Kontos ascertained. “It’s not just about trading, but also about the cultural heritage in traditional growing regions such as eastern Thrace that needs to be upheld and protected so we can pass it on to future generations.”
Kontos expressed his deep conviction that “that despite the many difficulties faced by the global tobacco industry, there always is going to be space for a company like SEKE, whose business approach is firmly grounded “on reliability, competitiveness, and capability.” It does not appear to be coincidental, then, that SEKE has been continuously expanding its customer base around the globe and wherever there exists a demand for tobacco. “SEKE is proud to count among its customers not only the largest tobacco companies in the world but also a growing myriad of smaller manufacturers who appreciate the exemplary quality of our merchandise.”