Alliance One International will reduce exposure to peripheral markets and focus on core business over the next 18 months to improve profitability, the company said.

"To better position our company as we look to the future, we are planning a comprehensive global restructuring program to commence in the fourth quarter and to be completed over 18 months.”, said Chief Executive Officer Pieter Sikkel. “As part of the plan we will look to further improve efficiencies in our operations around the world, continue to reduce our cost structure and optimize our global footprint. Improvements to our global footprint will include rationalizing certain markets that are not meeting performance metrics and do not represent strong future opportunities, while maximizing core markets where investments have been made over the past four years.”
Sales in the company’s third business quarter ended 31 Dec fell by one quarter to USD 489 million (EUR 432 million) as full service volumes decreased, Alliance One said. Gross profit as a percentage of sales rose 1.5 percentage points to 14.3 per cent, and the leaf merchant said it expected the profit measure would show improvement for the full fiscal year.
"Our volume and sales are being impacted by delayed shipment timing from Africa and the US that is anticipated to ship in the fourth quarter, and an oversupply in global tobacco leaf markets”, Sikkel said. “As typically encountered during periods of oversupply, some markets developed slowly this year, hampered further by South American weather conditions that resulted in a later start to purchasing and processing.”