Tobacco Commission (TC) on Friday unveiled a Serbian tobacco buying company called Tobacco Industry of Bujanovac (TIB).
The company is set to start buying tobacco on the auction market once registration issues and certificate issuance are sorted out in line with regulatory requirements.
The new buyer was unveiled on Thursday at a news conference in Lilongwe jointly held by TC and TIB representatives.
TIB chairperson Dragan Stankovic said the company’s long-term plan is to invest in a cigarette processing plant.
He said: “In most of the European countries, cigarettes are subjected to high taxes, leading to high prices; hence, looking for competitive raw materials. This is why we came to Malawi because there are various types of tobacco.
“We will be trying to check available opportunities to sell our final tobacco products. If we will get positive reaction then we plan to invest in the new manufacturing of final tobacco products here in Malawi.”
Stankovic said they are looking for burley tobacco and plan to buy between 100 and 200 tonnes this season.
TC chief executive officer Joseph Chidanti Malunga said the auction market has been riddled with rejection rate as high as 95 percent because of low competition as buyers prefer buying on contract market.
He said: “We are pleased to have someone who is serious in investing in the tobacco industry. We will take him through the process and then probably start buying tobacco as soon as possible.”
Malunga said TC is continuing to search for new buyers to increase competition on the auction market.
Last month whenPresident Lazarus Chakwera opened the tobacco marketing season, he challenged industry players to seek alternative crops because the tobacco industry is dying.
He also challenged the Ministry of Agriculture and TC to search for new tobacco buyers.
Last year, earnings from tobacco plunged by 27 percent to $174 million (about K134 billion) against $237 million (about K182 billion) earned in 2019.